CARPENTER TECHNOLOGY CORPORATION Exhibit 1
$198,000,000
Medium-Term Notes, Series B
Due from 9 Months to 30 Years from Date of Issue
DISTRIBUTION AGREEMENT
March 31, 1998
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
CARPENTER TECHNOLOGY CORPORATION, a Delaware corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
and sale from time to time by the Company of its Medium-Term Notes, Series B,
due from 9 months to 30 years from date of issue (the "Securities") at an
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aggregate initial offering price of up to $198,000,000, as such amount shall be
reduced by the aggregate initial offering price of any other debt securities
issued by the Company, whether within or outside the United States ("Other
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Securities") pursuant to the registration statement referred to below, and
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agrees with each of you (individually, an "Agent," and collectively, the
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"Agents," which term shall include any additional agents appointed pursuant to
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Section 13 hereof) as set forth in this Agreement. The Securities will be
issued under an indenture dated as of January 12, 1994 (the "Indenture")
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between the Company and U.S. Bank Trust National Association, formerly known as
First Trust of New York, National Association, as successor Trustee (the
"Trustee"). The Securities shall have the maturities, interest rates,
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redemption provisions, if any, and other terms set forth in the Prospectus
referred to below as it may be amended or supplemented from time to time. The
Securities will be issued, and the terms and rights thereof established, from
time to time by the Company in accordance with the Indenture.
On the basis of the representations and warranties herein contained,
but subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly to investors (other than
broker-dealers) on its own behalf, the Company hereby (i) appoints the Agents
as the exclusive agents of the Company for the purpose of soliciting and
receiving offers to purchase Securities from the Company by others pursuant to
Section 2(a) hereof and (ii) agrees that, except as otherwise contemplated
herein, whenever it determines to sell Securities directly to any Agent as
principal, it may enter into a separate agreement (each such agreement a "Terms
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Agreement"), substantially in the form of Exhibit A hereto, relating to such
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sale in accordance with Section 2(b) hereof.
The Company has prepared and filed a registration statement on Form
S-3 (No. 333-44757), including a base prospectus, in respect of the Securities
with the Securities and Exchange Commission (the "Commission") in accordance
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with the provisions of the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the "Securities
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Act"). Such registration statement, including the exhibits thereto, as amended
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to the Commencement Date (as hereinafter defined) is hereinafter referred to as
the "Registration Statement" and the base prospectus in the form in which it
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appears in the registration statement is hereinafter referred to as the "Basic
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Prospectus." The Basic Prospectus as supplemented by the prospectus supplement
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or supplements (each a "Prospectus Supplement") specifically relating to the
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Securities in the form filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 under the Securities Act is hereinafter referred to as the
"Prospectus." Any reference in this Agreement to the Registration Statement,
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the Basic Prospectus, any preliminary form of prospectus (a "preliminary
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prospectus") previously filed with the Commission pursuant to Rule 424 or the
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Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Securities Act
which were filed under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Exchange
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Act") on or before the date of this Agreement or the date of the Basic
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Prospectus, any preliminary prospectus or the Prospectus, as the case may be;
and any reference to "amend," "amendment" or "supplement" with respect to the
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Registration Statement, the Basic Prospectus, any preliminary prospectus or the
Prospectus, including any supplement to the Prospectus that sets forth only the
terms of a particular issue of the Securities (a "Pricing Supplement"), shall
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be deemed to refer to and include any documents filed under the Exchange Act
after the date of this Agreement or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be, which are deemed
to be incorporated by reference therein.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Agent as of the Commencement Date (as
hereinafter defined), as of each date on which the Company accepts an offer to
purchase Securities (including any purchase by an Agent as principal pursuant
to a Terms Agreement or otherwise), as of each date the Company issues and
sells Securities and as of each date the Registration Statement or the Basic
Prospectus is amended or supplemented, as follows (it being understood that such
representations and warranties shall be deemed to relate to the Registration
Statement, the Basic Prospectus and the Prospectus, each as amended or
supplemented to each such date):
(a) On the effective date of the Registration Statement relating to
the Securities (the "Effective Date"), such registration statement conformed as
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to form in all material respects to the requirements of the Securities Act, the
Trust Indenture Act of 1939, as amended (collectively with all rules and
regulations of the Commission thereunder, "Trust Indenture Act"), and the other
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applicable rules and regulations of the Commission ("Rules and Regulations") and
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did not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and on the date of each Terms Agreement referred to in
Section 2, the Prospectus will conform as to form in all material respects to
the requirements of the Securities Act, the Trust Indenture Act and the Rules
and Regulations, and on such date the Prospectus will not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that the
foregoing does not apply to (a) statements in or omissions from any of such
documents based upon written information furnished to the Company by any Agent
specifically for use therein and (b) that part of the Registration Statement
that constitutes the Statement of Eligibility on Form T-1 of the Trustee under
the Trust Indenture Act filed as an exhibit to the Registration Statement (the
"Form T-1").
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(b) (A) No stop order suspending the effectiveness of the
Registration Statement is in effect and, to the knowledge of the Company, no
proceedings for that purpose are pending before or threatened by the Commission
and (B) each document, if any, filed or to be filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus complied or will comply when so
filed as to form in all material respects with the Exchange Act and did not, or
will not when so filed, contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in the light of
the circumstances under which they were made, not misleading, excluding any
statement in any such document that does not constitute part of the
Registration Statement or the Prospectus pursuant to Rule 412 under the Act;
provided, however, that this representation and warranty shall not apply to any
statements in or omissions from any such documents based upon written
information furnished to the Company by any Agent specifically for use therein.
(c) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material
adverse effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations (a "Material
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Adverse Effect") of the Company and its subsidiaries, taken as a whole.
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(d) Each of the Company's subsidiaries has been duly incorporated and
is validly existing as a corporation under the laws of its jurisdiction of
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification, other
than where the failure to be so qualified or in good standing would not have a
Material Adverse Effect on the Company and its subsidiaries, taken as a whole;
and all the outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and non-
assessable, and (except, in the case of foreign subsidiaries, for directors'
qualifying shares) are owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests and claims.
(e) The Indenture has been duly authorized, executed and delivered by
the Company and has been duly qualified under the Trust Indenture Act; the
Indenture complies as to form in all material respects with the requirements of
the Trust Indenture Act; the Securities have been duly authorized by the
Company; and when the Securities are issued and delivered in accordance with
the Indenture and delivered to and paid for by the purchasers thereof in
accordance with this Agreement and any applicable Terms Agreement, such
Securities will have been duly executed, authenticated, issued and delivered by
the Company and the Securities of any particular issuance of Securities will
conform in all material respects to the description thereof contained in the
Prospectus as amended or supplemented to relate to such issuance of Securities,
and the Indenture and such Securities will constitute valid and legally binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights, to public policy considerations and to general equity
principles.
(f) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the consummation
of the transactions contemplated by any applicable Terms Agreement (including
the provisions of this Agreement) in connection with the issuance and sale of
the Securities by the Company, except such as are required under the Securities
Act and the Trust Indenture Act and such as may be required under state
securities laws.
(g) The execution, delivery and performance of the Indenture, any
applicable Terms Agreement (including the provisions of this Agreement) and the
issuance and sale of the Securities and compliance with the terms and provisions
thereof do not and will not (i) contravene any provision of the certificate of
incorporation, by-laws or other organizational documents of the Company or of
any of its subsidiaries, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under
(including, without limitation, any event which with notice or lapse of time, or
both, would constitute a default under), or result in the creation or
imposition of any lien, charge or encumbrance upon any assets or properties of
the Company or of any of its subsidiaries under, any statute, rule, regulation,
order or decree of any governmental agency or body or any court having
jurisdiction over any of them or any of their respective properties, assets or
operations, or any indenture, mortgage, loan agreement, note or other agreement
or instrument for borrowed money, any guarantee of any agreement or instrument
for borrowed money or any lease, permit, license or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
properties, assets or operations of any of them is subject, other than any such
breach, violation, default, lien, charge or encumbrance as would not singly or
in the aggregate with all such other breaches, violations, defaults, liens,
charges or encumbrances reasonably be expected to have a Material Adverse
Effect.
(h) This Agreement and any applicable Terms Agreement have been duly
authorized, executed and delivered by the Company.
(i) The Company has an authorized capitalization as set forth in the
Prospectus and such authorized capital stock conforms as to legal matters to the
description thereof set forth and incorporated by reference in the Prospectus,
and all of the outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and are not
subject to any preemptive or similar rights; and, except as described in or
expressly contemplated by the Prospectus, there are no outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options.
(j) Each of the Company and its subsidiaries has obtained all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and
other tribunals, domestic or foreign, necessary to own or lease, as the case
may be, and to operate its properties and to carry on its business as conducted
as of the date hereof, except where the failure to do so, individually or in
the aggregate, would not have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole, and neither the Company nor any such subsidiary
has received any actual notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order, approval
or other authorization, except as described in the Registration Statement and
the Prospectus; and each of the Company and its subsidiaries is in compliance
with all laws and regulations relating to the conduct of its business as
conducted as of the date hereof, except where the failure to do so, individually
or in the aggregate, would not have a Material Adverse Effect on the Company and
its subsidiaries, taken as a whole.
(k) To the best knowledge of the Company, the Company and its
subsidiaries (i) are in compliance with all applicable foreign, federal, state
and local laws and regulations relating to the protection of human health and
safety, the environment, natural resources and solid, hazardous or toxic
substances, materials or wastes, ("Environmental Laws"), (ii) have received all
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permits, licenses or other approvals required of them under all applicable
Environmental Laws to conduct their respective businesses (collectively,
"Environmental Authorizations") and (iii) are in compliance with all terms and
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conditions of any such Environmental Authorizations, except where such
noncompliance with Environmental Laws, failure to receive required Environmental
Authorizations or failure to comply with the terms and conditions of such
Environmental Authorizations would not, reasonably be expected, singly or in the
aggregate, to have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole.
(l) Other than as disclosed in the Prospectus, to the best knowledge
of the Company, there are no (a) discharges, disposals or releases of any solid,
hazardous or toxic substances, materials or wastes (collectively, "Hazardous
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Materials") present on, at, under or emanating from any of the properties
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currently or formerly owned or leased by the Company or any of its subsidiaries,
or their respective corporate predecessors in interest, or (b) spills, releases,
discharges or disposals of Hazardous Materials that have occurred or are
presently occurring from the properties of the Company as a result of any
construction on or operation and use of the properties of the Company, which
presence, discharge, disposal or release would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole;
(m) The Company and its subsidiaries have good and marketable title
in fee simple to all items of real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property and
do not interfere with the use made or proposed to be made of such property by
the Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid, existing
and enforceable leases with such exceptions as are not material to the general
affairs, business, prospects, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or its subsidiaries.
(n) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any Environmental
Authorizations, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on the Company and its subsidiaries, taken as a whole.
(o) Except as set forth in the Registration Statement and the
Prospectus, there are no pending actions, suits, proceedings or investigations
against or affecting the Company or any of its subsidiaries, or with respect to
which the Company or any of the subsidiaries is responsible by way of indemnity
or otherwise, that would singly or in the aggregate with all such other actions,
suits, investigations or proceedings reasonably be expected to have a Material
Adverse Effect on the Company, or reasonably be expected to have a material
adverse effect on the ability of the Company to perform its obligations under
this Agreement, the Indenture, the Securities or any applicable Terms Agreement;
and, to the best knowledge of the Company, except as set forth in the
Registration Statement and the Prospectus, no such actions, suits, proceedings
or investigations are threatened.
(p) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any change in
the capital stock or long-term debt of the Company or any of its subsidiaries,
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Prospectus; and except as set forth or
contemplated in the Prospectus, neither the Company nor any of its subsidiaries
has entered into any transaction or agreement (whether or not in the ordinary
course of business) material to the Company and its subsidiaries, taken as a
whole.
(q) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(r) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as defined in the
Investment Company Act of 1940.
(s) The Company and its subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have paid
all taxes shown thereon and all assessments received by them or any of them to
the extent that such taxes have become due and are not being contested in good
faith; and, except as disclosed in the Registration Statement and the
Prospectus, there is no material tax deficiency known to the Company which has
been or might reasonably be expected to be asserted or threatened against the
Company or any subsidiary.
(t) Except as set forth in the Registration Statement and the
Prospectus, no labor disturbance by the employees of the Company or any of the
subsidiaries exists or, to the best knowledge of the Company, is threatened,
that would singly or in the aggregate with all such other labor disturbances
reasonably be expected to have a Material Adverse Effect.
(u) Coopers & Lybrand L.L.P., the accounting firm that certified
certain financial statements of the Company and its subsidiaries, and Price
Waterhouse LLP, the accounting firm that certified certain financial statements
of each of Talley Industries, Inc. and its subsidiaries and Dynamet
Incorporated, are each independent public accountants as required by the
Securities Act.
(v) The financial statements, and the related notes thereto, included
or incorporated by reference in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations and changes in their consolidated cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles (except that the footnotes to the
interim financial statements do not comply with generally accepted accounting
principles) applied on a consistent basis, and the supporting schedules
included or incorporated by reference in the Registration Statement present
fairly the information required to be stated therein; and the pro forma
financial information, and the related notes thereto, included or incorporated
by reference in the Registration Statement and the Prospectus has been prepared
in accordance with the applicable requirements of the Securities Act and the
Exchange Act, as applicable, and is based upon good faith estimates and
assumptions believed by the Company to be reasonable.
(w) Each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that
is maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in all material respects in compliance with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended ("Code"). No prohibited transaction, within the meaning of Section 406
of ERISA or Section 4975 of the Code, has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative
exemption. For each such plan which is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no "accumulated funding
deficiency" as defined in Section 412 of the Code has been incurred, whether or
not waived. The aggregate fair market value of the assets of all such plans
(excluding for these purposes accrued but unpaid contributions) exceed the
present value of all benefits accrued under all such plans determined using
reasonable actuarial assumptions.
(x) The statements set forth in the Basic Prospectus under the
caption "Description of Debt Securities" and under the caption "Tax
Considerations" in the Prospectus, to the extent such statements purport to
summarize or describe the terms of the Shares, factual matters of law or
regulation or constitute summaries of documents described therein, are accurate
and complete in all material respects.
(y) Immediately after any sale of Securities by the Company hereunder
or under any applicable Terms Agreement, the aggregate amount of Securities
which shall have been issued and sold by the Company hereunder or under any
Terms Agreement and of any debt securities of the Company (other than the
Securities) that shall have been issued and sold pursuant to the Registration
Statement will not exceed the amount of debt securities registered under the
Registration Statement.
(z) The Company has and will maintain property and casualty insurance
in favor of the Company and its subsidiaries (as the case may be) with respect
to each of the Company's properties, in an amount and on such terms as is
reasonable and customary for businesses of the type conducted and proposed to
be conducted by the Company and its subsidiaries; the Company has not received
from any insurance company written notice of any material defects or
deficiencies affecting the insurability of any of its properties.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth,
each of the Agents hereby severally and not jointly agrees, as agent of the
Company, to use its reasonable efforts to solicit offers to purchase the
Securities from the Company upon the terms and conditions set forth in the
Prospectus as amended or supplemented from time to time. So long as this
Agreement shall remain in effect with respect to any Agent, the Company shall
not, without the consent of such Agent, solicit or accept offers to purchase,
or sell in the United States Securities or any other substantially similar debt
securities with a maturity at the time of original issuance of 9 months to 30
years except (i) pursuant to this Agreement and any Terms Agreement,
(ii) pursuant to a private placement not constituting a public offering under
the Securities Act, (iii) in connection with a firm commitment underwriting
pursuant to an underwriting agreement that does not provide for a continuous
public offering of medium-term debt securities, or (iv) in connection with the
continuous offering of asset-backed medium-term debt securities rated "AA" (or
an equivalent rating) or higher by a nationally recognized statistical rating
organization (as defined for purposes of Rule 436(g) under the Securities Act)
(a "Rating Organization"). However, the Company reserves the right to sell, and
may solicit and accept offers to purchase, Securities directly on its own
behalf to investors (other than broker-dealers).
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Securities. Upon receipt of at least one
business day's prior notice from the Company, each Agent will suspend
solicitation of offers to purchase Securities from the Company until such time
as the Company has advised such Agent or Agents that such solicitation may be
resumed. During the period of time that such solicitation is suspended, the
Company shall not be required to deliver any opinions, letters or certificates
in accordance with Sections 4(i), 4(j) and 4(k); provided that if the
Registration Statement or Prospectus is amended or supplemented during the
period of suspension (other than by an amendment or supplement providing solely
for a change in the interest rates, redemption provisions, amortization
schedules or maturities offered for the Securities or for a change that the
Agents deem to be immaterial), no Agent shall be required to resume soliciting
offers to purchase Securities until the Company has delivered such opinions,
letters and certificates as such Agent may reasonably request.
The Company agrees to pay each Agent, as consideration for the sale
of each Security resulting from a solicitation made or an offer to purchase
received by such Agent, a commission in the form of a discount from the purchase
price of such Security in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
Commission percentage of
aggregate principal amount
Range of Maturities of Securities sold
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From 9 months to less than 1 year. . . . . . .125%
From 1 year to less than 18 months . . . . . .150%
From 18 months to less than 2 years. . . . . .200%
From 2 years to less than 3 years. . . . . . .250%
From 3 years to less than 4 years. . . . . . .350%
From 4 years to less than 5 years. . . . . . .450%
From 5 years to less than 6 years. . . . . . .500%
From 6 years to less than 7 years. . . . . . .550%
From 7 years to less than 10 years . . . . . .600%
From 10 years to less than 15 years. . . . . .625%
From 15 years to less than 20 years. . . . . .700%
20 years to and including 30 years . . . . . .750%
The Agents are authorized to solicit offers to purchase Securities
only in the principal amount of $1,000 or any amount in excess thereof which is
an integral multiple of $1,000. Each Agent shall communicate to the Company,
orally or in writing, each offer to purchase Securities received by such Agent
as agent that in its judgment should be considered by the Company. The Company
shall have the sole right to accept offers to purchase the Securities and may
reject any such offer in whole or in part. Each Agent shall have the right, in
its sole discretion, to reject any offer to purchase Securities, as a whole or
in part, that it considers to be unacceptable and any such rejection shall not
be deemed a breach of its agreements herein contained. The procedural details
relating to the issue and delivery of Securities sold by an Agent as agent and
the payment therefor are set forth in the Administrative Procedures (as
hereinafter defined).
(b) Purchases as Principal. Each sale of Securities to any Agent as
principal shall be made in accordance with the terms of this Agreement and
(unless such Agent shall otherwise agree) a Terms Agreement which will provide
for the sale of such Securities to, and the purchase thereof by, such Agent.
A Terms Agreement will be substantially in the form of Exhibit A hereto but may
take the form of an exchange of any standard form of written telecommunication
between an Agent and the Company and may also specify certain provisions
relating to the reoffering of such Securities by such Agent. The commitment of
any Agent to purchase Securities as principal, whether pursuant to any Terms
Agreement or otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein and in the applicable Terms Agreement
set forth. Each agreement by an Agent to purchase Securities as principal
(pursuant to a Terms Agreement or otherwise) shall specify the principal amount
of Securities to be purchased by such Agent pursuant thereto, the price to be
paid to the Company for such Securities, the maturity date of such Securities,
the interest rate or interest rate basis, if any, applicable to such
Securities, any other terms of such Securities, the time and date and place of
delivery of and payment for such Securities (the time and date of any and each
such delivery and payment, the "Time of Delivery") and any provisions relating
to rights of, and default by, underwriters acting together with such Agent in
the reoffering of Securities, and shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant
to Section 4 hereof. Unless otherwise specified in a Terms Agreement, the
procedural details relating to the issue and delivery of Securities purchased
by an Agent as principal and the payment therefor shall be as set forth in the
Administrative Procedures.
(c) Obligations Several. The Company acknowledges that the
obligations of the Agents are several and not joint and, subject to the
provisions of this Section 2, each Agent shall have complete discretion as to
the manner in which it solicits purchasers for the Securities and as to the
identity thereof.
(d) Administrative Procedures. The Agents and the Company agree to
perform their respective duties and obligations specifically provided to be
performed in the Medium-Term Notes Administrative Procedures (the
"Administrative Procedures") attached hereto as Exhibit B, as the same may be
amended from time to time. The Administrative Procedures may be amended only
by written agreement of the Company and each of the Agents.
3. Commencement Date. The documents required to be delivered
pursuant to Section 6 hereof on the Commencement Date (as defined below) shall
be delivered to the Agents at the offices of Cahill Gordon & Reindel, New York,
New York at 9:00 a.m., on the date of this Agreement, which date and time of
such delivery may be postponed by agreement between the Agents and the Company
but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or the first date on
which the Company accepts an offer by any Agent to purchase Securities as
principal (such time and date being referred to herein as the "Commencement
Date").
4. Covenants of the Company. The Company covenants and agrees with
each Agent:
(a) (i) To make no amendment or supplement (other than a Pricing
Supplement with respect to any Securities not to be sold to or through an
Agent) to the Registration Statement or the Prospectus prior to the termination
of the offering of the Securities pursuant to this Agreement or any Terms
Agreement which shall be reasonably disapproved by any Agent after reasonable
opportunity to comment thereon, unless in the opinion of counsel for the Company
such amendment or supplement is required by law; provided, however, that the
foregoing shall not apply to any of the Company's periodic filings with the
Commission described in subsection (iii) below, copies of which filings the
Company will cause to be delivered to the Agents promptly after their
transmission to the Commission for filing; (ii) subject to the foregoing clause
(i), promptly to cause each Prospectus Supplement to be filed with or
transmitted for filing to the Commission in accordance with Rule 424(b) under
the Securities Act and to prepare, with respect to any Securities to be sold
through or to such Agent pursuant to this Agreement, a Pricing Supplement with
respect to such Securities in a form previously approved by such Agent and to
file such Pricing Supplement in accordance with Rule 424(b) under the Securities
Act; and (iii) promptly to file all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Securities. The Company will promptly advise each Agent (i) of the
filing of any amendment or supplement to the Basic Prospectus or any amendment
to the Registration Statement and of the effectiveness of any such amendment to
the Registration Statement; (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any prospectus relating to the Securities
or the initiation or threatening of any proceeding for that purpose, or of any
request by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or for additional information; and (iii) of the receipt
by the Company of any notification with respect to any suspension of the
qualification of the Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for any such purpose. The Company
agrees to use its best efforts to prevent the issuance of any such stop order
or of any such order preventing or suspending the use of any such prospectus or
of any notification suspending any such qualification and, if issued, to use
promptly its best efforts to obtain withdrawal thereof as soon as possible. If
the Basic Prospectus is amended or supplemented as a result of the filing under
the Exchange Act of any document incorporated by reference in the Prospectus, no
Agent shall be obligated to solicit offers to purchase Securities so long as it
is not reasonably satisfied with such document.
(b) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Agents shall
reasonably request and to continue such qualification in effect so long as
reasonably required in connection with the distribution of the Securities
provided that the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.
(c) To furnish each Agent and counsel to the Agents, at the expense
of the Company, a signed copy of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits and documents
incorporated by reference therein, and, during the period mentioned in paragraph
(d) below, to furnish each Agent as many copies of the Prospectus (including all
amendments and supplements thereto) and documents incorporated by reference
therein as such Agent may reasonably request.
(d) If at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event shall occur as a
result of which the Prospectus, as then amended or supplemented, would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if, in the opinion
of the Agents or the Company, it is necessary at any time to amend or supplement
the Prospectus to comply with law, to immediately notify the Agents by telephone
(with confirmation in writing) and request each Agent (i) in its capacity as
agent of the Company, to suspend solicitation of offers to purchase Securities
from the Company (and, if so notified, such Agent shall cease such solicitations
and cease using the Prospectus as soon as practicable, but in any event not
later than one business day later); and (ii) to cease sales of any Securities
such Agent may then own as principal. If, as a result of the occurrence of any
event described in the first sentence of this Section 4(d), the Company shall
decide to amend or supplement the Registration Statement or the Prospectus, as
then amended or supplemented, it shall so advise each Agent promptly by
telephone (with confirmation in writing) and, at its expense, shall prepare and
cause to be filed promptly with the Commission an amendment or supplement to the
Registration Statement or the Prospectus, as then amended or supplemented, that
will correct such statement or omission or effect such compliance and will
supply such amended or supplemented Prospectus to the Agents in such quantities
as they may reasonably request. If any such amendment or supplement and any
documents, opinions, letters and certificates furnished to the Agents pursuant
to Sections 4(e), 4(i), 4(j) and 4(k) in connection with the preparation and
filing of such amendment or supplement are reasonably satisfactory in all
respects to the Agents, upon the filing with the Commission of such amendment or
supplement to the Prospectus or upon the effectiveness of an amendment to the
Registration Statement, the Agents will resume the solicitation of offers to
purchase Securities hereunder. Notwithstanding any other provision of this
Section 4(d), until the distribution of any Securities any Agent may own as
principal has been completed or in the event such Agent, in the opinion of its
counsel, is otherwise required to deliver a prospectus in respect of a
transaction in the Securities, if any event described in the first sentence of
this Section 4(d) occurs, the Company will (i), at its own expense, promptly
prepare and file with the Commission an amendment or supplement to the
Registration Statement or Prospectus, reasonably satisfactory in all respects to
such Agent, that will correct such statement or omission or effect such
compliance, (ii) supply such amended or supplemented Prospectus to such Agent in
such quantities as such Agent may reasonably request and (iii) furnish to such
Agent pursuant to Sections 4(e), 4(i), 4(j) and 4(k) such documents,
certificates, opinions and letters as it may request in connection with the
preparation and filing of such amendment or supplement.
(e) To furnish to the Agents during the term of this Agreement such
relevant documents and certificates of officers of the Company relating to the
business, operations and affairs of the Company, the Registration Statement, the
Basic Prospectus, any amendments or supplements thereto, the Indenture, the
Securities, this Agreement, the Administrative Procedures, any applicable Terms
Agreement and the performance by the Company of its obligations hereunder or
thereunder as the Agents may from time to time reasonably request and shall
notify the Agents promptly in writing of any downgrading, or on its receipt of
any notice of (i) any intended or potential downgrading or (ii) any review or
possible change that indicates a downgrading or possible downgrading in the
rating accorded any securities of, or guaranteed by, the Company by any Rating
Organization.
(f) To make generally available to its security holders and to such
Agent as soon as practicable earnings statements which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the
Commission promulgated thereunder covering periods of at least twelve months
beginning in each case with the first fiscal quarter of the Company occurring
after the "effective date" (as defined in Rule 158) of the Registration
Statement with respect to each sale of Securities.
(g) To furnish to the Agent, during the term of this Agreement, (but
after five years from the date of this Agreement, upon request) copies of all
reports or other communications (financial or other) furnished to holders of
Securities and copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed.
(h) From the date of any applicable Terms Agreement with such Agent
or other agreement by such Agent to purchase Securities as principal and
continuing to and including the business day following the related Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of in the
United States any debt securities of or guaranteed by the Company which are
substantially similar to the Securities, without the prior written consent of
such Agent except (i) pursuant to this Agreement and any Terms Agreement,
(ii) pursuant to a private placement not constituting a public offering under
the Securities Act, (iii) in connection with a firm commitment underwriting
pursuant to an underwriting agreement that does not provide for a continuous
offering of medium-term debt securities, or (iv) in connection with the
continuous public offering of asset-backed medium-term debt securities rated
"AA" (or an equivalent rating) or higher by a Rating Organization.
(i) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement or an
amendment or supplement providing solely for a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on the
Securities or for a change the Agents deem to be immaterial) and each time the
Company sells Securities to such Agent as principal pursuant to a Terms
Agreement or other agreement and such Terms Agreement or other agreement
specifies the delivery of an opinion under this Section 4(i) as a condition to
the purchase of Securities pursuant to such Terms Agreement or other agreement,
the Company shall furnish or cause to be furnished forthwith to such Agent a
written opinion of Dechert Price & Rhoads, or other counsel for the Company
reasonably satisfactory to such Agent, dated the date of such amendment or
supplement, or the Time of Delivery relating to such sale, as the case may be,
in form reasonably satisfactory to such Agent, of the same tenor as the opinion
referred to in Section 6(b) hereof but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the date of such
opinion, or, in lieu of such opinion, counsel last furnishing such an opinion
may furnish to such Agent a letter to the effect that such Agent may rely on
the opinion of such counsel which was last furnished to such Agent to the same
extent as though it were dated the date of such letter (except that the
statements in such last opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to the date of delivery
of such letter).
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented to include or incorporate amended or supplemented
financial information and each time the Company sells Securities to such Agent
as principal pursuant to a Terms Agreement or other agreement and such Terms
Agreement or other agreement specifies the delivery of a letter under this
Section 4(j) as a condition to the purchase of Securities pursuant to such Terms
Agreement or other agreement, the Company shall cause the independent certified
public accountants who have certified the financial statements of the Company
and its subsidiaries included or incorporated by reference in the Registration
Statement forthwith to furnish such Agent a letter, dated the date of such
amendment or supplement or the related Time of Delivery relating to such sale,
as the case may be, in form reasonably satisfactory to such Agent, of the same
tenor as the letter referred to in Section 6(e) hereof but modified to relate
to the Registration Statement and the Prospectus as amended or supplemented to
the date of such letter with such changes as may be necessary to reflect such
amended or supplemented financial information included or incorporated by
reference in the Registration Statement or the Prospectus as amended or
supplemented, provided, however, that, with respect to any financial information
or other matter, such letter may reconfirm as true and correct at such date, as
though made at and as of such date, rather than repeat, statements with respect
to such financial information or other matter made in the letter referred to in
Section 6(e) hereof which was last furnished to such Agent.
(k) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement or an
amendment or supplement providing solely for a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on the
Securities or for a change the Agents deem to be immaterial), and each time the
Company sells Securities to such Agent as principal and the applicable Terms
Agreement or other agreement specifies the delivery of a certificate under this
Section 4(k) as a condition to the purchase of Securities pursuant to such Terms
Agreement or other agreement, the Company shall furnish or cause to be furnished
forthwith to such Agent a certificate signed by an executive officer of the
Company, dated the date of such amendment or supplement or the Time of Delivery
relating to such sale, as the case may be, in form reasonably satisfactory to
such Agent, of the same tenor as the certificates referred to in Section 6(e)
but modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to the date of delivery of such certificate or to the
effect that the statements contained in the certificate referred to in
Section 6(e) hereof which was last furnished to such Agent are true and correct
at such date as though made at and as of such date (except that such statements
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented to such date).
5. Costs and Expenses. The Company covenants and agrees with each
Agent that the Company will, whether or not any sale of Securities is
consummated, pay all costs and expenses incident to the performance of its
obligations hereunder and under any applicable Terms Agreement, including
without limiting the generality of the foregoing, all costs and expenses:
(i) incident to the preparation, issuance, execution, authentication and
delivery of the Securities, including any expenses of the Trustee, (ii) incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus (including
in each case all exhibits, amendments and supplements thereto), (iii) incurred
in connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such
jurisdictions as the Agents (or in connection with any Terms Agreement, the
applicable Agent) may reasonably request pursuant to Section 4(b) (including
reasonable related fees of counsel for the Agents (or such Agent) and their
reasonable related disbursements), (iv) in connection with the listing of the
Securities on any stock exchange, (v) related to any filing with National
Association of Securities Dealers, Inc. ("NASD"), (vi) in connection with the
printing (including word processing and duplication costs) and delivery of this
Agreement, the Indenture, any Blue Sky Memoranda and any Legal Investment Survey
and the furnishing to the Agents and dealers of copies of the Registration
Statement and the Prospectus, including mailing and shipping, as herein
provided, (vii) payable to rating agencies in connection with the rating of the
Securities, (viii) incurred in connection with the engagement of any qualified
independent underwriter as may be required by rules and regulations of NASD,
(ix) the reasonable fees and disbursements of counsel for the Agents incurred in
connection with the offering and sale of the Securities, including any opinions
to be rendered by such counsel hereunder and (x) any advertising and
out-of-pocket expenses reasonably incurred by the Agents in connection with the
performance of their obligations hereunder.
6. Conditions. The obligation of any Agent, as agent of the
Company, at any time ("Solicitation Time") to solicit offers to purchase the
Securities, the obligation of any Agent to purchase Securities as principal
pursuant to any Terms Agreement or otherwise, and the obligation of any other
purchaser to purchase Securities shall in each case be subject (1) to the
condition that all representations and warranties of the Company herein and all
statements of officers of the Company made in any certificate furnished
pursuant to the provisions hereof are true and correct (i) in the case of an
Agent's obligation to solicit offers to purchase Securities, at and as of such
Solicitation Time and (ii) in the case of any Agent's or any other purchaser's
obligation to purchase Securities, at and as of the time the Company accepts the
offer to purchase such Securities and, as the case may be, at and as of the
related Time of Delivery or time of purchase; (2) to the condition that at or
prior to such Solicitation Time, time of acceptance, Time of Delivery or time of
purchase, as the case may be, the Company shall have complied with all its
agreements and all conditions on its part to be performed or satisfied hereunder
prior to such relevant time; and (3) to the following additional conditions when
and as specified:
(a) Prior to such Solicitation Time or corresponding Time of Delivery
or time of purchase, as the case may be:
(i) if any amendment to the Registration Statement filed prior
to the Commencement Date has not been declared effective as of the
Commencement Date, such amendment shall have been declared effective
not later than 5:30 p.m. (New York City time) on the Commencement
Date; if applicable, the Prospectus as amended or supplemented
(including, if applicable, the Pricing Supplement) with respect to
such Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Securities Act within the applicable time period
prescribed for such filing by the rules and regulations under the
Securities Act; no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceeding for that
purpose shall have been initiated or threatened by the Commission
which has not been resolved in the reasonable satisfaction of such
Agent; and all requests for additional information on the part of the
Commission shall have been complied with to the reasonable
satisfaction of such Agent;
(ii) and subsequent to the date of this Agreement, there shall
not have occurred any downgrading, nor shall any notice have been
given of (A) any intended or potential downgrading or (B) any review
or possible change that indicates a downgrading or possible
downgrading in the rating accorded any securities of or guaranteed by
the Company by any Rating Organization;
(iii) and subsequent to the date of this Agreement, there shall
not have been any material adverse change in the financial condition
or results of operations of the Company and its subsidiaries, taken
as a whole, otherwise than as set forth or contemplated in the
Prospectus, as amended or supplemented to such Solicitation Time or at
the time such offer to purchase was made, the effect of which in the
judgment of the applicable Agent makes it impracticable or inadvisable
to market the Securities on the terms and in the manner contemplated
in the Prospectus, as so amended or supplemented; and
(iv) and subsequent to the date of this Agreement, there shall
not have occurred (a) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (b) any banking moratorium declared by U.S.
Federal or New York authorities; or (c) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of the
applicable Agent, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the sale of and payment for the
Securities.
(b) On the Commencement Date and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, Dechert Price & Rhoads, counsel for the Company,
shall have furnished to the relevant Agent or Agents their written opinion,
dated the Commencement Date or Time of Delivery, as the case may be, in form
and substance satisfactory to such Agent or Agents, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to
own its properties and conduct its business as described in the
Prospectus;
(ii) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act and constitutes a valid and legally binding obligation
of the Company enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights, to
public policy considerations and to general equity principles; the
Indenture complies as to form in all material respects with the
requirements of the Trust Indenture Act; the Securities have been duly
authorized by the Company and, when the terms thereof have been
established and when the Securities have been executed, authenticated,
issued and delivered in the manner provided in the Indenture and sold
through an Agent as agent or to any Agent as principal pursuant to a
Terms Agreement, will constitute, valid and legally binding
obligations of the Company enforceable against the Company in
accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights, and to general equity principles; (it
being understood that such counsel may (a) assume that at the time of
such issuance, sale and delivery of each Security, the authorization
of the Securities will not have been modified or rescinded and there
will not have occurred any change in law affecting the validity,
legally binding character or enforceability of such Security, and
(b) assume that neither the issuance, sale and delivery of any
Security, nor any of the terms of such Security, nor compliance by the
Company with such terms, will violate any applicable law, any
agreement or instrument then binding upon the Company or any
restriction imposed by any court or governmental body having
jurisdiction over the Company, in each case to the extent not in
effect on the date of such opinion);
(iii) no consent, approval, authorization or order, license,
registration or qualification of or with any governmental agency or
body or any court is required for the consummation of the transactions
contemplated by this Agreement and any applicable Terms Agreement in
connection with the issuance or sale of the Securities by the Company,
except such as are required and have been obtained and made under the
Securities Act and the Trust Indenture Act and such as may be required
under state securities laws; (it being understood that such counsel
may assume with respect to each particular Security that the inclusion
of any alternative or additional terms in such Security that are not
currently specified in the form of Securities approved by the actions
of the authorized officers would not require the Company to obtain any
regulatory consent, authorization or approval or make any regulatory
filing in order for the Company to issue sell and deliver such
Security);
(iv) the execution, delivery and performance of the Indenture,
this Agreement and any applicable Terms Agreement and the issuance and
sale of the Securities and compliance with the terms and provisions of
the Indenture, this Agreement and the terms of the Securities
described in the Prospectus will not conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any material statute, rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company, any subsidiary incorporated in the
United States of America or any of their respective properties known
to such counsel, or the charter or by-laws of the Company, or any such
subsidiary; and the Company has full power and authority to authorize,
issue and sell the Securities as contemplated by this Agreement and
any applicable Terms Agreement; (it being understood that such counsel
may assume with respect to each particular Security that the inclusion
of any alternative or additional terms in such Security that are not
currently specified in the form of Securities approved by the actions
of the authorized officers will not cause the issuance, sale or
delivery of such Security, the terms of such Security, or the
compliance by the Company with such terms, to violate any of the
statutes, rules, regulations or orders, or to result in a default
under or a breach of any of the agreements, specified in this
paragraph);
(v) the Registration Statement has become effective under the
Securities Act and, to the best of the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
or any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Act, and the registration statement relating to the Securities, as of
its effective date and the Prospectus, as of the date of the
applicable Terms Agreement, and any amendment or supplement thereto,
as of its date, complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations; such counsel have no reason to believe that such
registration statement, as of its effective date, or any amendment
thereto, as of its date, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus, as of the date of the applicable Terms Agreement
or as of such Commencement Date, or any amendment or supplement
thereto, as of its date, contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; it being understood that such counsel
need express no opinion as to the financial statements or other
financial and statistical data contained in the Registration Statement
or the Prospectus;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) each document filed pursuant to the Exchange Act (other
than the financial statements, schedules and other financial and
statistical data included therein, as to which such counsel need
express no opinion) and incorporated or deemed to be incorporated by
reference in the Prospectus complied as to form in all material
respects with the applicable requirements of the Exchange Act when so
filed; and
(viii) such counsel does not know of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement, required to be described in the Prospectus or
required to be incorporated by reference therein which are not so
filed, described or incorporated, as required.
Such counsel in rendering such opinion may rely as to certain matters
of fact on certificates of officers of the Company and of public officials;
provided, however, that such certificates shall have been delivered to the
Representatives on or prior to the Commencement Date or Time of Delivery, as the
case may be.
(c) On the Commencement Date and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, John R. Welty, Vice President, General Counsel
and Secretary of the Company, shall have furnished to the relevant Agent or
Agents his written opinion, dated the Commencement Date or Time of Delivery, as
the case may be, in form and substance satisfactory to such Agent or Agents, to
the effect that:
(i) no consent, approval or authorization of any third party is
required for the consummation of the transactions contemplated by this
Agreement and any applicable Terms Agreement in connection with the
issuance or sale of the Securities by the Company, except such as have
been obtained and made and are in full force and effect and such as
may be required under state securities laws;
(ii) the execution, delivery and performance of the Indenture
and the applicable Terms Agreement (including the provisions of this
Agreement) and the issuance and sale of the Securities and compliance
with the terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under (including, without limitation, any event or condition
which, with notice or lapse of time, or both, would constitute a
default under), any material agreement or instrument known to such
counsel to which the Company or any subsidiary is a party or by which
the Company or any subsidiary is bound or to which any of the
properties of the Company or any subsidiary is subject;
(iii) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to
own its properties and conduct its business as described in the
Prospectus;
(iv) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a Material Adverse Effect on the Company
and its subsidiaries, taken as a whole;
(v) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws
of its jurisdiction of incorporation with corporate power and
authority to own its properties and conduct its business as described
in the Prospectus and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified and in good standing would not
have a Material Adverse Effect on the Company and its subsidiaries
taken as a whole; and all of the outstanding shares of capital stock
of each subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable, and (except, in the case of foreign
subsidiaries, for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Notes to be issued and sold by the Company hereunder
have been duly authorized, and when delivered to and paid for the by
the Agents in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable and the issuance of the
Notes is not subject to any preemptive or similar rights;
(viii) the Registration Statement has been declared effective
under the Securities Act, the Prospectus was filed with the Commission
pursuant to Rule 424 within the applicable time period prescribed by
Rule 424 and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose is pending or threatened by
the Commission;
(ix) such counsel does not know of any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement, required to be described in the Prospectus or
required to be incorporated by reference therein which are not so
filed, described or incorporated, as required; except as set forth in
the Prospectus, there are no material pending legal proceedings known
to such counsel to which the Company or any subsidiary is a party or
of which the property of the Company or any subsidiary is the subject,
and to the best knowledge of such counsel no such proceeding is
contemplated;
(x) neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation
of or in default under, its Certificate of Incorporation or By-Laws or
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or by which it or any of them or
any of their respective properties is bound, except for violations
and defaults which would not have a Material Adverse Effect on the
Company or any of its subsidiaries; and the performance by the Company
of its obligations under this Agreement and the consummation of the
transactions contemplated herein will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will any such
action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, its subsidiaries
or any of their respective properties;
(xi) each of the Company and its subsidiaries owns, possesses
or has obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities (including foreign regulatory agencies), all self-
regulatory organizations and all courts and other tribunals, domestic
or foreign, necessary to own or lease, as the case may be, and to
operate its properties and to carry on its business as conducted as of
the date hereof, except where the failure to do so, individually or in
the aggregate, would not have a Material Adverse Effect on the Company
and its subsidiaries, taken as a whole, and neither the Company nor
any such subsidiary has received any actual notice of any proceeding
relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except
as described in the Registration Statement and the Prospectus; and
each of the Company and its subsidiaries is in compliance with all
laws and regulations relating to the conduct of its business as
conducted as of the date of the Prospectus, except where the failure
to do so, individually or in the aggregate, would not have a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole;
(xii) to the best of such counsel's knowledge, each of the
Company and its subsidiaries is in compliance with all applicable
Environmental Laws, except, where noncompliance, individually or in
the aggregate, would not reasonably be expected to have a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole;
there are no legal or governmental proceedings pending or, to the best
knowledge of such counsel, threatened against or affecting the Company
or any of its subsidiaries under any Environmental Law which,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect on the Company and its subsidiaries, taken
as a whole;
(xiii) the Company is not, and after giving effect to the
offering and sale of the Shares, will not be an "investment company"
or entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act;
and
(xiv) such counsel has no reason to believe that the
registration statement relating to the Securities, as of its effective
date, or any amendment thereto, as of its date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of the date of the
Terms Agreement or as of the Commencement Date, or any amendment or
supplement thereto, as of its date or as of the Commencement Date,
contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; it being understood that such counsel
need express no opinion as to the financial statements or other
financial or statistical data contained in the Registration Statement
or the Prospectus.
Such counsel in rendering such opinion may rely as to certain matters
of fact on certificates of officers of the Company and of public officials;
provided, however, that such certificates shall have been delivered to the
Agents on or prior to the Commencement Date or Time of Delivery, as the case may
be.
(d) On the Commencement Date and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, Cahill Gordon & Reindel, counsel to the Agents,
shall have furnished to the relevant Agent or Agents such opinion or opinions,
dated the Commencement Date or Time of Delivery, as the case may be, with
respect to the validity of the Indenture, the Securities, the Registration
Statement, the Prospectus as amended or supplemented and other related matters
as such Agent or Agents may reasonably request, and in each case such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters.
(e) On the Commencement Date and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, the Company's independent certified public
accountants who have certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement
and Prospectus, as then amended or supplemented, shall have furnished to the
relevant Agent or Agents a letter, dated the Commencement Date or Time of
Delivery, as the case may be, in form and substance satisfactory to such Agent
or Agents, containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information relating to the Company contained
in or incorporated by reference in the Registration Statement and the
Prospectus, as then amended or supplemented.
(f) On the Commencement Date and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, the relevant Agent or Agents shall have received
a certificate or certificates signed by two executive officers of the Company,
dated the Commencement Date or Time of Delivery, as the case may be, in which
each such officer, to the best of his knowledge after reasonable investigation,
shall state that (1) the representations and warranties of the Company contained
herein are true and correct in all material respects on and as of the
Commencement Date or Time of Delivery, as the case may be, as if made on and as
of such date, (2) the Company has complied in all material respects with all
agreements and satisfied in all material respects all conditions on its part to
be performed or satisfied hereunder or under the applicable Terms Agreement or
other agreement at or prior to the Commencement Date or Time of Delivery, as the
case may be, (3) no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and is in effect as of the
Commencement Date or Time of Delivery, as the case may be, and, to such
officer's knowledge, no proceedings for that purpose have been instituted or are
contemplated by the Commission and (4) subsequent to the date of the most recent
financial statements in the Prospectus, there has not occurred any material
adverse change in the financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, except as set forth in or
contemplated by the Registration Statement or the Prospectus or as described in
such certificate and reasonably acceptable to such Agent or Agents.
(g) On the Commencement Date and at each Time of Delivery, the
Company shall have furnished to the relevant Agent or Agents such further
relevant certificates, information and documents as such Agent or Agents may
reasonably request.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Agent and
each person, if any, who controls such Agent within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including without
limitation the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus or arising out of any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished to the Company in
writing by such Agent expressly for use therein; provided, however, that the
foregoing indemnity with respect to any untrue statement in or omission from any
preliminary prospectus or preliminary prospectus supplement shall not inure to
the benefit of any Agent (or to the benefit of any person controlling such
Agent) from whom the person asserting any such losses, claims, damages or
liabilities purchased the Securities if (i) the Company has complied with
Section 4(a), (c) and (d) of this Agreement, and (ii) a copy of the Prospectus
had not been sent or given to such person at or prior to the written
confirmation of the sale of such Securities to such person if required by the
Securities Act and the Prospectus would have cured the defect giving rise to
such loss, claim, damage or liability. For purposes of the proviso to the
immediately preceding sentence, the term "Prospectus" shall not be deemed to
include the documents incorporated therein by reference, and no Agent shall be
obligated to send or give any supplement or amendment to any document
incorporated by reference in any preliminary prospectus or the Prospectus to any
person.
(b) Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Agent, but only with
reference to information furnished to the Company in writing by such Agent
expressly for use in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any preliminary prospectus.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Agents and
such control persons of the Agents shall be designated in writing by J.P. Morgan
Securities Inc. or, if J.P. Morgan Securities Inc. is not an Indemnified Person
by the Agents that are Indemnified Parties and any such separate firm for the
Company, its directors, its officers who sign the Registration Statement and
such control persons of the Company shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. If at any time an
Indemnified Person shall have requested an Indemnifying Person to reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by the
third sentence of this paragraph, such Indemnifying Person agrees that it shall
be liable for any settlement of any proceeding of the nature contemplated by
Sections 7(a) or 7(b) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such Indemnifying
Person of the aforesaid request, (ii) such Indemnifying Person shall have
received notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such Indemnifying Person shall not have
reimbursed such Indemnified Person in accordance with such request prior to the
date of such settlement. Notwithstanding the immediately preceding sentence, if
at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for fees and expenses of counsel, an
Indemnifying Person shall not be liable for any settlement of any proceeding of
the nature contemplated by Sections 7(a) or 7(b) effected without its consent if
such Indemnifying Person (i) reimburses such Indemnified Person in accordance
with such request to the extent it reasonably considers such request to be
reasonable and (ii) provides written notice to the Indemnified Person
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in paragraph (a) or (b) of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to herein in
connection with any offering of Securities, then each Indemnifying Person under
such paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and each Agent on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and each Agent on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each Agent on the
other in connection with the offering of such Securities shall be deemed to be
in the same respective proportion as the net proceeds from the offering of such
Securities (before deducting expenses) received by the Company and the total
discounts and commissions received by each Agent in respect thereof bear to the
aggregate offering price of such Securities. The relative fault of the Company
on the one hand and of each Agent on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or by such Agent
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and each Agent agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if all Agents were treated as one entity for such purpose)
or by any other method of allocation that does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to above in this Section 7 shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Agent be required to contribute any amount in
excess of the amount by which the total price at which the Securities referred
to in Section 7(d) that were sold by or through such Agent exceeds the amount
of any damages that such Agent has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The obligation
of each Agent to contribute pursuant to this subsection (d) is several (in the
proportion to the principal amount of the Securities the sale of which by or
through such Agent gave rise to such losses, claims, damages or liabilities
bears to the aggregate principal amount of the Securities the sale of which by
or through any Agent gave rise to such losses, claims, damages or liabilities)
and is not joint.
(e) The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. Termination.
(a) This Agreement may be terminated at any time (i) by the Company
with respect to any or all of the Agents or (ii) by any Agent with respect to
itself only, in each case upon the giving of written notice of such termination
to each other party hereto. Any Terms Agreement shall be subject to termination
in the absolute discretion of the Agent or Agents that are parties thereto on
the terms set forth or incorporated by reference therein. The termination of
this Agreement shall not require termination of any agreement by an Agent to
purchase Securities as principal (whether pursuant to a Terms Agreement or
otherwise) and the termination of such an agreement shall not require
termination of this Agreement. In the event this Agreement is terminated with
respect to any Agent, (x) this Agreement shall remain in full force and effect
with respect to any Agent as to which such termination has not occurred, (y)
this Agreement shall remain in full force and effect with respect to the rights
and obligations of any party which have previously accrued or which relate to
Securities which are already issued, agreed to be issued or the subject of a
pending offer at the time of such termination and (z) in any event, the
provisions of the fourth paragraph of Section 2(a), Section 2(c), the last
sentence of Section 4(d) and Sections 4(f), 4(g), 5, 7, 9, 10, 12 and 15 shall
survive; provided that if at the time of termination an offer to purchase
Securities has been accepted by the Company but the time of delivery to the
purchaser or its agent of such Securities has not yet occurred, the provisions
of Sections 2(b), 2(d), 4(a) through 4(e), 4(h) through 4(k) and 6 shall also
survive. If any Terms Agreement is terminated, the provisions of the last
sentence of Section 4(d) and Sections 2(b), 2(d), 4(a), 4(b), 4(e), 4(g) through
4(k), 5, 6, 7, 9, 10, 12 and 15 (which shall have been incorporated by reference
in such Terms Agreement) shall survive.
(b) If this Agreement or any Terms Agreement shall be terminated by
an Agent or Agents because of any failure or refusal on the part of the Company
to comply with the terms or to fulfill any of the conditions of this Agreement
or any Terms Agreement or if for any reason the Company shall be unable to
perform its obligations under this Agreement or any Terms Agreement or any
condition of any Agent's obligations cannot be fulfilled, the Company agrees to
reimburse each Agent or such Agents as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
reasonable fees and expenses of their counsel) reasonably incurred by such Agent
or Agents in connection with this Agreement or the offering of Securities.
9. Position of the Agents. Each Agent, in soliciting offers to
purchase Securities from the Company and in performing the other obligations of
such Agent hereunder (other than in respect of any purchase by an Agent as
principal, pursuant to a Terms Agreement or otherwise), is acting solely as
agent for the Company and not as principal and does not assume any obligation
towards or relationship of agency or trust with any purchaser of Securities.
Each Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Securities from the
Company was solicited by such Agent and has been accepted by the Company, but
such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on
its obligation to deliver Securities to a purchaser whose offer it has accepted,
the Company shall (i) hold the relevant Agent harmless against any loss, claim,
damage or liability arising from or as a result of such default by the Company
and (ii) notwithstanding such default, pay to the Agent that solicited such
offer any commission to which it would be entitled in connection with such sale.
10. Representations and Indemnities to Survive. The respective
indemnities and contribution agreements, representations, warranties and other
statements of the Company, its officers and the Agents set forth in or made
pursuant to this Agreement or any agreement by an Agent to purchase Securities
as principal shall remain in full force and effect regardless of any termination
of this Agreement or any such agreement, any investigation made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
11. Notices. Except as otherwise specifically provided herein or in
the Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing, and effective only on receipt and will be
delivered by hand, by mail (postage prepaid), by telegram (charges prepaid) or
by telex. Communications to the Agents will be sent, in the case of J.P. Morgan
Securities Inc., to 60 Wall Street, New York, New York 10260 (Telecopy: (212)
648-5909) Attention: Medium-Term Note Desk; in the case of Credit Suisse First
Boston Corporation, Eleven Madison Avenue, New York, New York 10010 (Telecopy:
(212) 325-8183) Attention: Short and Medium Term Finance Desk; and, if sent to
the Company, to it at Carpenter Technology Corporation, 101 West Bern Street,
Reading, PA 19601 (Telecopy: (610) 208-2000); Attention: Vice President, General
Counsel and Secretary.
12. Successors. This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent and the Company,
and their respective successors and the officers, directors and controlling
persons referred to in Section 7 and (to the extent expressly provided in
Section 6) the purchasers of Securities, and no other person shall acquire or
have any right or obligation under or by virtue of this Agreement or any Terms
Agreement.
13. Amendments. This Agreement may be amended or supplemented if,
but only if, such amendment or supplement is in writing and is signed by the
Company and each Agent; provided that the Company may from time to time, on 7
days prior written notice to the Agents but without the consent of any Agent,
amend this Agreement to add as a party hereto one or more additional firms
registered under the Exchange Act, whereupon each such firm shall become an
Agent hereunder on the same terms and conditions as the other Agents that are
parties hereto. The Agents shall sign any amendment or supplement giving effect
to the addition of any such firm as an Agent under this Agreement.
14. Business Day. Time shall be of the essence in this Agreement and
any Terms Agreement. As used herein, the term "business day" shall mean any day
which is not a Saturday or Sunday or legal holiday or a day on which banks in
New York City are required or authorized by law or executive order to close.
15. Applicable Law. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of
New York, without giving effect to the conflict of laws provisions thereof.
16. Counterparts. This Agreement and any Terms Agreement may be
signed in counterparts, each of which shall be an original, and all of which
together shall constitute one and the same instrument.
17. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, whereupon this letter and the acceptance
by each of you thereof shall constitute a binding agreement between the Company
and each of you in accordance with its terms.
Very truly yours,
CARPENTER TECHNOLOGY
CORPORATION
By: /s/G. Walton Cottrell
-----------------------------
Name: G. Walton Cottrell
Title: Senior Vice President Finance
and Chief Financial Officer
Accepted in New York, New York,
as of the date first above written:
J.P. Morgan Securities Inc.
By: /s/Raymond Schmitt
----------------------------
Name: Raymond Schmitt
Title: Vice President
Credit Suisse First Boston Corporation
By: /s/Helena M. Willner
----------------------------
Name: Helena M. Willner
Title: Vice President
Exhibit A
CARPENTER TECHNOLOGY CORPORATION
MEDIUM TERM NOTES, SERIES B
TERMS AGREEMENT
_________, 199_
CARPENTER TECHNOLOGY CORPORATION
101 West Bern Street
Reading, PA 19601
Attention: Treasurer
Re: Distribution Agreement dated as of
March 31, 1998 (the "Distribution Agreement")
The undersigned agrees to purchase your Medium-Term Notes, Series B having the
following terms:
Principal Amount:
----------------------------------------------
Original Issue Date:
-------------------------------------------
Settlement Date, Time and Place:
-------------------------------
Maturity Date:
--------------------------------------------------
Purchase Price: % of Principal Amount, plus
--
accrued interest, if any, from Settlement Date
Price to Public: % of Principal Amount, plus
--
accrued interest, if any, from Settlement Date
Redemption Date (Dates): , commencing
----------- ----------
Initial Redemption Price:
Annual Redemption Price decrease:
Repayment Date (Dates):
Repayment Price:
Initial accrual period OID:
Original Yield to Maturity:
Regular Record Dates:
(For Fixed Rate Notes)
Interest Rate:
--------------------------------------------------
Applicability of modified payment upon acceleration:
If yes, state issue price:
Amortization schedule:
(For Floating Rate Notes)
Initial Interest Rate:
------------------------------------------
Interest Rate Basis (Commercial Paper, Prime, LIBOR, Treasury,
CD, Federal Funds, CMT, Other):
------------------------------
Index Maturity (30, 60, 90 days, 6 months, 1 year,
other):
-------------------------------------------------------
Interest Reset Period (daily, weekly, monthly, quarterly,
semiannually, annually):
Interest Payment Period (monthly, quarterly, semiannually,
annually):
Spread: basis points (+/-)
-------
Spread Multiplier: %
------
Maximum Interest Rate: %
------
Minimum Interest Rate: %
------
Initial Interest Reset Date:
------------------------------------
Interest Reset Dates:
-------------------------------------------
Interest Determination Dates:
-----------------------------------
Interest Payment Dates:
-----------------------------------------
Calculation Agent:
Calculation Date:
Other terms of Securities:
Provisions relating to underwriter default, if any:
The provisions of Sections 1, 2(b) and 2(d) and 4 through 7, 10, 11,
12 and 15 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
This Agreement is subject to termination in our absolute discretion on
the terms incorporated by reference herein. If this Agreement is so terminated,
the provisions set forth in the last sentence of Section 8 of the Distribution
Agreement shall survive for the purposes of this Agreement.
The certificate referred to in Section 4(k) of the Distribution
Agreement, the opinion referred to in Section 4(i) of the Distribution Agreement
and the accountants' letter referred to in Section 4(j) of the Distribution
Agreement will be required.
[Agent]
By:
------------------------------------
(Title)
Accepted:
CARPENTER TECHNOLOGY CORPORATION
By:
-----------------------------
(Title)
Exhibit B
CARPENTER TECHNOLOGY CORPORATION
MEDIUM-TERM NOTES, SERIES B
ADMINISTRATIVE PROCEDURES
----------------------
The Medium-Term Notes, Series B (the "Notes"), are to be offered on a
continuous basis by Carpenter Technology Corporation (the "Company"). Each of
J.P. Morgan Securities Inc. and Credit Suisse First Boston Corporation (each,
an "Agent") has agreed to solicit offers to purchase the Notes in registered
form. The Notes are being sold pursuant to a Distribution Agreement dated as
of March 31, 1998 (the "Agreement") between the Company and the Agents. In the
Agreement, each Agent has agreed to use reasonable efforts to solicit purchases
of the Notes. Each Agent, as principal, may purchase Notes for its own account
and, if such Agent so elects, the Company and such Agent will enter into a Terms
Agreement, as contemplated by the Agreement. The Company may also solicit
offers to purchase and may sell Notes directly on its own behalf to investors
(other than broker-dealers).
The Notes will be issued under an Indenture dated as of
January 12, 1994 (as supplemented or amended from time to time, the "Indenture")
between the Company and U.S. Bank Trust National Association, formerly known as
First Trust of New York, National Association, as Successor Trustee (the
"Trustee"). The Trustee will be the Registrar, Calculation Agent,
Authenticating Agent and Paying Agent for the Notes, and will perform the duties
specified herein. Notes will bear interest at a fixed rate (the "Fixed Rate
Notes"), which may be zero in the case of certain original issue discount notes
(the "OID Notes"), or at floating rates (the "Floating Rate Notes"). Fixed Rate
Notes may pay a level amount in respect of both interest and principal amortized
over the life of the Notes ("Amortizing Notes"). Each Note will be represented
by either a Global Security (as defined below) 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").
Except in limited circumstances, an owner of a Book-Entry Note will not be
entitled to receive a Certificated Note.
Book-Entry Notes, which may be payable solely in U.S. dollars, will be
issued in accordance with the administrative procedures set forth in Part I
hereof as they may subsequently be amended as the result of changes in DTC's
operating procedures, and Certificated Notes will be issued in accordance with
the administrative procedures set forth in Part II hereof. Unless otherwise
defined herein, terms defined in 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 Company and the Trustee to DTC, dated as of the date hereof (the
"Letter of Representations"), and a Medium-Term Note Certificate Agreement
between the Trustee and DTC, dated as of March 31, 1998 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 Company will issue a single global
security in fully registered form without coupons (a
"Global Security") representing up to
U.S. $198,000,000 principal amount of all such Notes
that have the same Maturity Date, redemption or
repayment provisions, Interest Payment Dates,
Original Issue Date, original issue discount
provisions (if any), and, in the case of Fixed Rate
Notes, Interest Rate, modified payment upon
acceleration (if any), amortization schedule (if any)
or, in the case of Floating Rate Notes, Initial
Interest Rate, Interest Payment Dates, Interest
Payment Period, Calculation Agent, Base Rate, Index
Maturity, Interest Reset Period, Interest Reset
Dates, Spread or Spread Multiplier (if any), Minimum
Interest Rate (if any) and Maximum Interest Rate (if
any) and, in each case, any other relevant terms
(collectively, "Terms"). Each Global Security will
be dated and issued as of the date of its
authentication by the Trustee. Each Global Security
will bear an "Interest Accrual Date," which will be
(i) with respect to an original Global Security (or
any portion thereof), its original issuance date and
(ii) with respect to any Global Security (or any
portion thereof) issued subsequently upon exchange
of a Global Security, or in lieu of a destroyed, lost
or stolen Global Security, the most recent Interest
Payment Date to which interest has been paid or duly
provided for on the predecessor Global Security or
Securities (or if no such payment or provision has
been made, the original issuance date of the
predecessor Global Security), regardless of the date
of authentication of such subsequently issued Global
Security. Book-Entry Notes may only be denominated
and payable in U.S. dollars. No Global Security will
represent (i) both Fixed Rate and Floating Rate Book-
Entry Notes or (ii) any Certificated Note.
Identification Numbers: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for Securities representing the
Book-Entry Notes. The Company 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 the written list of 900 CUSIP
numbers of such series. The Trustee will assign
CUSIP numbers to Global Securities as described
below under Settlement Procedure "B." DTC will
notify the CUSIP Service Bureau periodically of the
CUSIP numbers that the Trustee has assigned to Global
Securities. At any time when fewer than 100 of the
reserved CUSIP numbers remain unassigned to Global
Securities, the Trustee shall so advise the Company
and, if it deems necessary, the Company will reserve
additional CUSIP numbers for assignment to Global
Securities representing Book-Entry Notes. Upon
obtaining such additional CUSIP numbers, the
Company shall deliver a list of such additional CUSIP
numbers to the Trustee and DTC.
Registration: Each Global Security will be registered in the name
of Cede & Co., as nominee for DTC, on the security
register maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or one or more
indirect participants in DTC designated by such
owner) will designate one or more participants in DTC
with respect to such Note (the "Participants") to act
as agent or agents for such owner in connection with
the book-entry system maintained by DTC and DTC will
record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such beneficial owner in 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 accompanied
by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of consolidation
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 thirty days after such written
notice is delivered and at least thirty days before
the next Interest Payment Date for such Book-Entry
Notes, on which such Global Securities shall be
exchanged for a single replacement Global Security
and (iii) a new CUSIP number to be assigned to such
replacement Global Security. Upon receipt of such a
notice, DTC will send to its Participants (including
the Trustee) a written reorganization notice to the
effect that such 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 a new Interest
Accrual Date, and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP
Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be exchanged
exceed $198,000,000 in aggregate principal amount,
one Global Security will be authenticated and issued
to represent each $198,000,000 principal amount of
the exchanged Global Security 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 from nine
months to 30 years from its date of issue.
Notice of Redemption and The Trustee will give notice to DTC prior to each
Repayment Dates: Redemption Date or Repayment Date (as specified in
the Note), if any, at the time and in the manner set
forth in the Letter of Representations.
Denominations: Book-Entry Notes will be issued in principal amounts
of $1,000 and integral multiples thereof. Global
Securities will be denominated in principal amounts
not in excess of $198,000,000. If one or more Book-
Entry Notes having an aggregate principal amount in
excess of $198,000,000 would, but for the preceding
sentence, be represented by a single Global Security,
then one Global Security will be issued to represent
each $198,000,000 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 Interest Accrual Date of the Global Security
representing such Note. Unless otherwise specified
therein, each payment of interest on a Book-Entry
Note will include interest accrued to but excluding
the Interest Payment Date; provided that in the case
of Floating Rate Notes with respect to which the
Interest Reset Period is daily or weekly, interest
payable on any Interest Payment Date (other than
interest payable on any date on which principal
thereof is payable, and, if the Note is a Book-Entry
Gap Note (as defined below), other than interest
payable on the first Interest Payment Date after the
Original Issue Date thereof) will include interest
accrued through and including the Record Date
immediately preceding the Interest Payment Date,
except that at maturity or earlier redemption or
repayment, the interest payable will include interest
accrued to, but excluding, the Maturity Date or the
date of redemption or repayment, as the case may be.
Interest payable at the maturity or upon redemption
or repayment of a Book-Entry Note will be payable to
the person to whom the principal of such Note is
payable. Standard & Poor's Corporation will use the
information received in the pending deposit message
described under Settlement Procedure "C" below in
order to include the amount of any interest payable
and certain other information regarding the related
Global Security in the appropriate weekly bond report
published by Standard & Poor's Corporation.
Record Dates. The Record Date with respect to any
Interest Payment Date shall be the date fifteen
calendar days immediately preceding such Interest
Payment Date.
Fixed Rate Book-Entry Notes. Unless otherwise
specified pursuant to Settlement Procedure "A" below,
interest payments on Fixed Rate Book-Entry Notes,
other than Amortizing Notes, will be made
semiannually on April 15 and October 15 of each year,
and at maturity or upon any earlier redemption or
repayment; provided, however, that in the case of a
Fixed Rate Book-Entry Note issued between a Record
Date and an Interest Payment Date or on an Interest
Payment Date, the first interest payment will be made
on the Interest Payment Date following the next
succeeding Record Date. If any Interest Payment Date
for a Fixed Rate Book-Entry Note 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 Interest Payment Date. Further information
concerning additional terms and provisions of
Amortizing Notes will be specified in the applicable
Pricing Supplement.
Floating Rate Book-Entry Notes. Interest payments
will be made on Floating Rate Book-Entry Notes
monthly, quarterly, semiannually or annually. Unless
otherwise specified pursuant to Settlement Procedure
"A" below, interest will be payable, in the case of
Floating Rate Book-Entry Notes with a daily, weekly
or quarterly Interest Reset Date, on the third
Wednesday of March, June, September and December, as
specified pursuant to Settlement Procedure "A" below;
in the case of Floating Rate Book-Entry Notes with a
monthly Interest Reset Date, on the third Wednesday
of each month or on the third Wednesday of March,
June, September and December, as specified pursuant
to Settlement Procedure "A" below; in the case of
Floating Rate Book-Entry Notes with a semiannual
Interest Reset Date, on the third Wednesday of the
two months specified pursuant to Settlement Procedure
"A" below; and in the case of Floating Rate Book-
Entry Notes with an annual Interest Reset Date, on
the third Wednesday of the month specified pursuant
to Settlement Procedure "A" below; provided however,
that if an Interest Payment Date for Floating Rate
Book-Entry Notes would otherwise be a day that is not
a Market Day with respect to such Floating Rate Book-
Entry Notes, such Interest Payment Date will be the
next succeeding Market Day with respect to such
Floating Rate Book-Entry Notes, except in the case of
a LIBOR Note if such Market Day is in the next
succeeding calendar month, such Interest Payment Date
will be the immediately preceding Market Day; and
provided, further, that in the case of a Floating
Rate Book-Entry Note issued between a Record Date and
the related Interest Payment Date (a "Book-Entry Gap
Note"), the first interest payment will be made on
the Interest Payment Date following the next
succeeding Record Date, and in such case,
notwithstanding the fact that an Interest Reset Date
may occur prior to such Interest Payment Date, the
Initial Interest Rate shall remain in effect until
the first Interest Reset Date occurring on or
subsequent to such Interest Payment Date.
Notice of Interest Payment and Record Dates. Prior
to the first Business Day of March, June, September
and December of each year, the Trustee will deliver
to the Company and DTC a written list of Record Dates
and Interest Payment Dates that will occur with
respect to Book-Entry Notes during the six-month
period beginning on such first Business Day.
Promptly after each date upon which interest is
determined for Floating Rate Notes issued in book-
entry form, the Calculation Agent will notify the
Company, the Trustee and Standard & Poor's
Corporation of the interest rates determined on such
dates.
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 thirty-day months.
Floating Rate Book-Entry Notes. Interest rates on
Floating Rate Book-Entry Notes will be determined as
set forth in the form of such Notes. Interest on
Floating Rate Book-Entry Notes will be calculated on
the basis of actual days elapsed and a year of 360
days, except that, in the case of Treasury Rate Notes
and CMT Rate Notes, interest will be calculated on
the basis of the actual number of days in the year.
Payments of Principal Payments of Interest Only. Promptly before each
and Interest: Record Date, the Trustee will deliver to the Company
and DTC a written notice specifying by CUSIP number
the amount of interest to be paid on each Global
Security other than an Amortizing Note on the
following Interest Payment Date (other than an
Interest Payment Date coinciding with maturity or any
earlier redemption or repayment date) and the total
of such amounts. DTC will confirm the amount payable
on each such Global Security on such Interest Payment
Date by reference to the daily bond reports published
by Standard & Poor's Corporation. In the case of
Amortizing Notes, the Trustee will provide separate
written notice to the Company and to DTC prior to
each Interest Payment Date at the time and in the
manner set forth in the Letter of Representations.
The Company will pay to the Trustee, as paying agent,
the total amount of interest due on such Interest
Payment Date (and, in the case of an Amortizing Note,
principal and interest) (other than at maturity), and
the Trustee will pay such amount to DTC at the times
and in the manner set forth below under "Manner of
Payment."
Payments at Maturity or Upon Redemption or
Repayment. Prior to the first Business Day of each
month, the Trustee will deliver to the Company and
DTC a written list of principal and interest to be
paid on each Global Security other than an Amortizing
Note maturing either at maturity or on a redemption
or repayment date in the following month. The
Company 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 Date or redemption or
repayment date of such Global Security. In the case
of Amortizing Notes, the Trustee will provide
separate written notice to the Company and to DTC
prior to the Maturity Date and any redemption or
repayment date, as the case may be, at the times and
in the manner set forth in the Letter of
Representations. The Company will pay to the
Trustee, as the paying agent, the principal amount of
such Global Security, together with interest due at
such Maturity Date or redemption or repayment date.
The Trustee will pay such amounts to DTC at the times
and in the manner set forth below under "Manner of
Payment."
Payments Not on Business Days. If any Interest
Payment Date or the Maturity Date or redemption or
repayment date of a Global Security representing
Fixed Rate 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
Interest Payment Date, Maturity Date or redemption or
repayment date, as the case may be. If any Interest
Payment Date or the Maturity Date or redemption or
repayment date of a Global Security representing a
Floating Rate Book-Entry Note would otherwise fall
on a day that is not a Market Day, the payment due on
such day shall be made on the next succeeding day
that is a Market Day with respect to such Notes with
the same effect as if such Market Day were the
Interest Payment Date, Maturity Date or date of
redemption or repayment, as the case may be, except
that, in the case of Book-Entry LIBOR Notes, if such
Market Day is in the next succeeding calendar month,
such Interest Payment Date, Maturity Date or
redemption or repayment date shall be the
immediately preceding day that is a Market Day with
respect to such Book-Entry LIBOR Notes. Promptly
after payment to DTC of the principal and interest
due on the Maturity Date or redemption or repayment
date of such Global Security, the Trustee will cancel
such Global Security in accordance with the terms of
the Indenture and deliver it to the Company with a
certificate of cancellation. On the first Business
Day of each month, the Trustee will deliver to the
Company a written statement indicating the total
principal amount of outstanding Book-Entry Notes 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 or upon redemption or
repayment shall be paid by the Company to the Trustee
in funds available for immediate use by the Trustee
as of 9:30 a.m. (New York City time) on such date.
The Company will make such payment on such Global
Securities by wire transfer to the Trustee or by
instructing the Trustee to withdraw funds from an
account maintained by the Company at the Trustee.
The Company will confirm such instructions in writing
to the Trustee. Prior to 10 a.m. (New York City
time) on each Maturity Date or redemption or
repayment date or, if either such date is not a
Business Day, as soon as possible thereafter,
following receipt of such funds from the Company the
Trustee will pay by separate wire transfer (using
Fedwire message entry instructions in a form
previously specified by DTC) to an account at the
Federal Reserve Bank of New York previously specified
by DTC, in funds available for immediate use by DTC,
each payment of principal (together with interest
thereon) due on Global Securities on any Maturity
Date or redemption or repayment date. On each
Interest Payment Date or, if any such date is not a
Business Day, as soon as possible thereafter,
interest payments and, in the case of Amortizing
Notes, interest and principal 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 Company nor the Trustee shall have any
responsibility or liability for the payment by DTC to
such Participants of the principal of and interest on
the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in
DTC or other person responsible or forwarding
payments directly to the beneficial owner of such
Note.
Preparation of If any order to purchase a Certificated Note is
Pricing Supplement: accepted by or on behalf of the Company, the Company
will prepare a pricing supplement reflecting the
terms of such Note and will arrange to file such
Pricing Supplement with the Commission in accordance
with the applicable paragraph of Rule 424(b) under
the Act and will deliver the number of copies of such
Pricing Supplement to the relevant Agent as such
Agent shall reasonably request by the close of
business on the following Business Day. The relevant
Agent will cause such Pricing Supplement to be
delivered to the purchaser of the Note.
In each instance that a Pricing Supplement is
prepared, the Agent receiving such Pricing Supplement
will affix the Pricing Supplement to Prospectuses
prior to their use. Outdated Pricing Supplements,
and the Prospectuses to which they are attached
(other than those retained for files), will be
destroyed.
Settlement: The receipt by the Company 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. All orders accepted by
the Company will be settled on the third Business
Day following such acceptance pursuant to the
timetable for settlement set forth below unless the
Company and the purchaser agree to settlement on
another day, which shall be no earlier than the next
Business Day.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Note sold by the Company to or through an Agent shall
be as follows (unless otherwise specified pursuant to
a Terms Agreement, as defined in the Agreement):
A. The relevant Agent will advise the Company by
facsimile transmission or other acceptable means
that such Note is a Book-Entry Note and of the
following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry Note,
the Interest Rate, and whether such Note is an
Amortizing Note and, if so, the Amortization
Schedule, or, in the case of a Floating Rate
Book-Entry Note, the Initial Interest Rate (if
known at such time), Interest Payment Date(s),
including the Initial Interest Payment Date,
Interest Payment Period, Calculation Agent,
Base Rate, Index Maturity, Interest Reset
Period, Initial Interest Reset Date, Interest
Reset Dates, Spread or Spread Multiplier (if
any), Minimum Interest Rate (if any) and
Maximum Interest Rate (if any).
4. Redemption or repayment provisions, if any.
5. Settlement date and time.
6. Price.
7. Agent's commission, if any, determined as
provided in the Agreement.
8. Net proceeds to the Company.
9. Whether the Note is an OID Note, and if it is
an OID Note, the total amount of OID, the
yield to maturity, the initial accrual period
OID and the applicability of Modified
Payment upon Acceleration (and, if so, the
Issue Price).
10. Any other applicable Terms.
B. The Company will advise the Trustee by facsimile
transmission or other acceptable means of the
information set forth in Settlement Procedure "A"
above. The Trustee will then assign a CUSIP
number to the Global Security representing such
Note and will notify the Trustee and the Agent of
such CUSIP number by telephone or electronic
transmission (confirmed in writing) as soon as
practicable.
C. The Trustee will enter a pending deposit message
through DTC's Participant Terminal System,
providing the following settlement information to
DTC, the relevant Agent and Standard & Poor's
Corporation:
1. The information set forth in Settlement
Procedure "A."
2. The Initial Interest Payment Date for such
Note, the number of days by which such date
succeeds the related DTC Record Date (which
in the case of Floating Rate Notes which reset
daily or weekly, shall be the date five
calendar days immediately preceding the
applicable Interest Payment Date and, in the
case of all other Notes, shall be the Record
Date as defined in the Note) and, if known, the
amount of interest payable on such Initial
Interest Payment Date.
3. The CUSIP number of the Global Security
representing such Note.
4. Whether such Global Security will represent
any other Book-Entry Note (to the extent
known at such time) and whether such Note is
an Amortizing Note (by an appropriate
notation in the comments field of DTC's
Participant Terminal System).
5. The DTC participant number of the institution
through which the Company will hold the
Book-Entry Note.
D. The Trustee will complete and authenticate the
Global Security representing such Note in
accordance with the terms of the written order of
the Company then in effect.
E. DTC will credit such Note to the Trustee's
participant account at DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (1) debit such Note to the
Trustee's participant account and credit such Note
to the relevant 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, if any. The entry of such a
deliver order shall constitute a representation
and warranty by the Trustee to DTC that (a) the
Global Security representing such Book-Entry Note
has been issued and authenticated and (b) the
Trustee is holding such Global Security pursuant
to the Medium-Term Note Certificate Agreement
between the Trustee and DTC.
G. Unless the relevant Agent purchased such Note as
principal, 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 account of such Participants and credit
the settlement account of such Agent for an amount
equal to the price of such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement Procedures
"F" and "G" will be settled in accordance with
SDFS operating procedures in effect on the
settlement date.
I. The Trustee, upon confirming receipt of such
funds, will credit to the U.S. dollar account of
the Company maintained at a bank in New York City,
notified to the Trustee from time to time, in
funds available for immediate use in the amount
transferred to the Trustee, in accordance with
Settlement Procedure "F."
J. Unless the relevant Agent purchased such Note as
principal, such Agent will confirm the purchase of
such Note to the purchaser either by transmitting
to the Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
K. Monthly, the Trustee will send to the Company a
statement setting forth the principal amount of
Notes Outstanding as of that date under the
Indenture and setting forth a brief description of
any sales of which the Company has advised the
Trustee but which have not yet been settled.
Settlement: For sales by the Company of Book-Entry Notes to or
through an Agent unless otherwise specified pursuant
to a Terms Agreement for settlement on the first
Business Day after the sale date, Settlement
Procedures "A" through "J" set forth above shall be
completed as soon as possible but not later than the
respective times (New York City time) set forth
below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 9:00 a.m. on settlement date
E 10:00 a.m. on settlement date
F-G 2:00 p.m. on settlement date
H 4:45 p.m. on settlement date
I-J 5:00 p.m. on settlement date
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures "A," "B"
and "C" shall be completed as soon as practicable but
no later than 11:00 a.m. 12 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 noon and 2:00 p.m.,
respectively, on the second Business Day before the
settlement date. Settlement Procedure "H" is subject
to extension in accordance with any extension of
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect
on the settlement date. If settlement of a Book-
Entry Note is rescheduled or cancelled, the Trustee,
after receiving notice from the Company or the Agent,
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 "F," the Trustee may deliver to
DTC, through DTC's Participant Terminal System, as
soon as practicable a withdrawal message instructing
DTC to debit such Note to the Trustee's participant
account, 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 Company. The CUSIP number assigned
to such Global Security shall, in accordance with
CUSIP Service Bureau procedures, be cancelled and
not immediately reassigned. If a withdrawal
message is processed with respect to one or more, but
not all, of the Book-Entry Notes represented by a
Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of
which shall represent such Book-Entry Note or Notes
and shall be cancelled immediately after issuance and
the other of which shall represent the remaining
Book-Entry Notes previously represented by the
surrendered Global Security and shall bear the CUSIP
number of the surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the 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 relevant Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered pursuant
to Settlement Procedures "F" and "G," respectively.
Thereafter, the Trustee will deliver the withdrawal
message and take the related actions described in the
preceding paragraph.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any action in accordance with its SDFS operating
procedures then in effect. In the event of a failure
to settle with respect to one or more, but not all,
of the Book-Entry Notes to have been represented by a
Global Security, the Trustee will provide, in
accordance with Settlement Procedures "D" and "F,"
for the authentication and issuance of a Global
Security representing the Book-Entry Notes to be
represented by such Global Security and will make
appropriate entries in its records.
Posting Rates by Company: The Company and the Agents will from time to time
post the rates of interest per annum to be borne by
and the maturity of Securities that may be sold as a
result of the solicitation of offers by an Agent.
The Company may establish a fixed set of interest
rates and maturities for an offering period
("posting"). If the Company decides to change
already posted rates, it will promptly advise the
Agents to suspend solicitation of offers until the
new posted rates have been established with the
Agent.
Trustee Not To Risk Funds: Nothing herein shall be deemed to require the Trustee
to risk or expend its own funds in connection with
any payments to the Company, the Agents, DTC or any
holders of Notes, it being understood by all parties
that payments made by the Trustee to the Company, the
Agents, DTC or any holders of Notes shall be made
only to the extent that funds are provided to the
Trustee for such purpose.
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 an Original Issue Date,
which will be (i) with respect to an original
Certificated Note (or any portion thereof), its
original issuance date (which will be the settlement
date) and (ii) with respect to any Certificated Note
(or any portion thereof) issued subsequently upon
exchange of a Certificated Note, or in lieu of a
destroyed, lost or stolen Certificated Note, the
original issuance date of the predecessor
Certificated Note, regardless of the date of
authentication of such subsequently issued
Certificated Note.
Registration: Certificated Notes will be issued only in fully
registered form without coupons.
Transfers and Exchanges: A Certificated Note may be presented for transfer or
exchange at the principal corporate trust office of
the Trustee. Certificated Notes will be exchangeable
for other Certificated Notes having identical terms
but different authorized denominations without
service charge. Certificated Notes will not be
exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date from
nine months to 30 years from its date of issue.
Currency: The currency denomination with respect to any
Certificated Note and the currency of payment of
interest and principal with respect to any such
Certificated Note shall be U.S. dollars.
Denominations: Unless otherwise provided in a Prospectus Supplement,
the denomination of any Certificated Note will be a
minimum of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000.
General. Interest on each Certificated Note will
accrue from the Original Issue Date of such Note for
the first interest period and from the most recent
date to which interest has been paid for all
subsequent interest periods. Unless otherwise
specified therein, each payment of interest on a
Certificated Note will include interest accrued to
but excluding the Interest Payment Date; provided
that in the case of Floating Rate Notes with respect
to which the Interest Reset Period is daily or
weekly, interest payable on any Interest Payment
Date (other than interest payable on any date on
which principal thereof is payable, and, if the Note
is a Certificated Gap Note (as defined below), other
than interest payable on the first Interest Payment
Date after the Original Issue Date thereof) will
include interest accrued through and including the
Record Date immediately preceding the Interest
Payment Date, except that at maturity or earlier
redemption or repayment, the interest payable will
include interest accrued to, but excluding, the
Maturity Date or the date of redemption or repayment,
as the case may be.
Record Dates. The Record Date with respect to any
Interest Payment Date in respect of a Certificated
Note shall be the date fifteen calendar days
immediately preceding such Interest Payment Date.
Fixed Rate Certificated Notes. Unless otherwise
specified pursuant to Settlement Procedure "A" below,
interest payments on Fixed Rate Certificated
Notes, other than Amortizing Notes, will be made
semiannually on April 15 and October 15 of each year
and at maturity or upon any earlier redemption or
repayment; provided, however that in the case of a
Fixed Rate Certificated Note issued between a Record
Date and an Interest Payment Date or on an Interest
Payment Date, the first interest payment will be made
on the Interest Payment Date following the next
succeeding Record Date. If any Interest Payment Date
for a Fixed Rate Certificated Note 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 Interest Payment Date. Further information
concerning additional terms and provisions of
Amortizing Notes will be specified in the applicable
Pricing Supplement.
Floating Rate Certificated Notes. Interest payments
will be made on Floating Rate Certificated Notes
monthly, quarterly, semiannually or annually. Unless
otherwise specified pursuant to Settlement Procedure
"A" below, interest will be payable, in the case of
Floating Rate Certificated Notes with a daily, weekly
or quarterly Interest Reset Date, on the third
Wednesday of March, June, September and December,
as specified pursuant to Settlement Procedure "A"
below; in the case of Floating Rate Certificated
Notes with a monthly Interest Reset Date, on the
third Wednesday of each month or on the third
Wednesday of March, June, September and December, as
specified pursuant to Settlement Procedure "A" below;
in the case of Floating Rate Certificated Notes with
a semiannual Interest Reset Date, on the third
Wednesday of the two months specified pursuant to
Settlement Procedure "A" below; and in the case of
Floating Rate Certificated Notes with an annual
Interest Reset Date, on the third Wednesday of the
month specified pursuant to Settlement Procedure "A"
below; provided however, that if an Interest Payment
Date for Floating Rate Certificated Notes would
otherwise be a day that is not a Market Day with
respect to such Floating Rate Certificated Notes,
such Interest Payment Date will be the next
succeeding Market Day with respect to such Floating
Rate Certificated Notes, except in the case of a
LIBOR Note if such Market Day is in the next
succeeding calendar month, such Interest Payment
Date will be the immediately preceding Market Day;
and provided, further, that in the case of a Floating
Rate Certificated Note issued between a Record Date
and the related Interest Payment Date (a
"Certificated Gap Note"), the first interest payment
will be made on the Interest Payment Date following
the next succeeding Record Date, and in such case,
notwithstanding the fact that an Interest Reset Date
may occur prior to such Interest Payment Date, the
Initial Interest Rate shall remain in effect until
the first Interest Reset Date occurring on or
subsequent to such Interest Payment Date.
Notice of Interest Payment and Record Dates. Prior
to the first Business Day of March, June, September
and December of each year, the Trustee will deliver
to the Company a written list of Record Dates and
Interest Payment Dates that will occur with respect
to Certificated Notes during the six-month period
beginning on such first Business Day. Promptly after
each date upon which interest is determined for
Floating Rate Notes issued in certificated form, the
Calculation Agent will notify the Company and the
Trustee of the interest rates determined on such
dates.
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 thirty-day months.
Floating Rate Certificated Notes. Interest rates on
Floating Rate Certificated Notes will be determined
as set forth in the form of such Notes. Interest on
Floating Rate Certificated Notes will be calculated
on the basis of actual days elapsed and a year of 360
days, except that, in the case of Treasury Rate
Notes and CMT Rate Notes, interest will be calculated
on the basis of the actual number of days in the
year.
Payments of Principal The Company will pay the Trustee, as Paying Agent,
and Interest: the principal amount of each Certificated Note (other
than a Certificated Amortizing Note), together with
interest due thereon, at its Maturity Date or upon
redemption or repayment of such note in funds
available for immediate use by the Trustee. In the
case of a Certificated Amortizing Note, the Company
will pay the Trustee, as Paying Agent, the principal
amount due on such Note on such date, together with
interest due thereon, at its Maturity Date or upon
redemption or repayment of such Note on such date,
together with interest due thereon, at its Maturity
Date or upon redemption or repayment of such Note in
funds available for immediate use by the Trustee.
The Trustee will pay such amount to the holder of
such Note at its Maturity Date or upon redemption or
repayment of such Note upon presentation and
surrender of such Note to the Trustee. Such payment,
together with payment of interest due at maturity or
upon redemption or repayment, will be made in funds
available for immediate use by the holder of such
Note.
Promptly after such presentation and surrender, the
Trustee will cancel such Certificated Note in
accordance with the terms of the Indenture and
deliver it to the Company with a certificate of
cancellation. Unless otherwise specified in the
applicable Pricing Supplement, all interest payments
on a Certificated Note or, in the case of a
Certificated Amortizing Note, payments of principal
and interest (other than interest (or interest and
principal) due at maturity or upon redemption or
repayment) 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 and the Indenture; provided,
however, that the holder of $1,000,000 or more of
Notes having the same Interest Payment Date will be
entitled to receive payment by wire transfer of
immediately available funds and the holder of such
Notes will provide the Trustee with appropriate and
timely wire transfer instructions.
Promptly after each Record Date, the Trustee will
deliver to the Company a written notice specifying
the amount of interest to be paid on each
Certificated Note other than an Amortizing Note on
the following Interest Payment Date (other than an
Interest Payment Date coinciding with maturity or any
earlier redemption or repayment date) and the total
of such amounts. In the case of Amortizing Notes, the
Trustee will provide separate written notice to the
Company specifying the amount of interest and
principal to be paid on each Amortizing Note on the
following Interest Payment Date (other than an
Interest Payment Date coinciding with maturity or any
earlier redemption or repayment date) and the total
of such amounts. Interest at maturity or upon
redemption or repayment will be payable to the person
to whom the payment of principal is payable. On or
about the first Business Day of each month, the
Trustee will deliver to the Company a written list of
principal and interest, to the extent ascertainable,
to be paid on each Certificated Note including
Amortizing Notes maturing or to be redeemed or repaid
in the following month, if any. The Trustee will be
responsible for withholding taxes on interest paid on
Certificated Notes as required by applicable law.
If any Interest Payment Date or the Maturity Date or
redemption or repayment date of a Fixed Rate
Certificated Note 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 Interest
Payment Date, Maturity Date or redemption or
repayment date, as the case may be. If any Interest
Payment Date or the Maturity Date or redemption or
repayment date of a Floating Rate Certificated Note
would otherwise fall on a day that is not a Market
Day with respect to such Note, the payment due on
such day shall be made on the next succeeding day
that is a Market Day with respect to such Note with
the same effect as if such Market Day were the stated
Interest Payment Date, Maturity Date or date of
redemption or repayment, as the case may be, except
that, in the case of Certificated LIBOR Notes, if
such Market Day is in the next succeeding calendar
month, such Interest Payment Date, Maturity Date or
redemption or repayment date shall be the immediately
preceding day that is a Market Day with respect to
such Certificated LIBOR Notes.
Preparation of If any order to purchase a Certificated Note is
Pricing Supplement: accepted by or on behalf of the Company, the Company
will prepare a Pricing Supplement reflecting the
terms of such Note and will arrange to file the
Pricing Supplement with the Commission in accordance
with the applicable paragraph of Rule 424(b) under
the Act and will deliver the number of copies of such
Pricing Supplement to the relevant Agent as such
Agent shall reasonably request by the close of
business on the following Business Day. The relevant
Agent will cause such Pricing Supplement to be
delivered to the purchaser of the Note.
In each instance that a Pricing Supplement is
prepared, the Agent receiving such Pricing Supplement
will affix the Pricing Supplement to Prospectuses
prior to their use. Outdated Pricing Supplements, and
the Prospectuses to which they are attached (other
than those retained for files), will be destroyed.
Settlement: The receipt by the Company of immediately available
funds in payment for an authenticated Certificated
Note delivered to the relevant Agent and such Agent's
delivery of such Note against receipt of immediately
available funds shall constitute "settlement" with
respect to such Note. All orders accepted by the
Company will be settled on the third Business Day
following such acceptance pursuant to the timetable
for settlement set forth below unless the Company and
the purchaser agree to settlement on another day,
which shall be no earlier than the next Business Day.
Settlement Settlement Procedures with regard to each
Procedures: Certificated Note sold by the Company to or through
an Agent shall be as follows (unless otherwise
specified pursuant to a Terms Agreement):
A. The relevant Agent will advise the Company by
facsimile transmission or other acceptable means
that such Note is a Certificated Note and of the
following settlement information:
1. Name in which such Note is to be registered
("Registered Owner").
2. Address of the Registered Owner and address
for payment of principal and interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Maturity Date.
5. In the case of a Fixed Rate Certificated Note,
the Interest Rate, and whether such Note is an
Amortizing Note and, if so, the Amortization
Schedule or, in the case of a Floating Rate
Certificated Note, the Initial Interest Rate
(if known at such time), Interest Payment
Date(s), Interest Payment Period, Calculation
Agent, Base Rate, Index Maturity, Interest
Reset Period, Initial Interest Reset Date,
Interest Reset Dates, Spread or Spread
Multiplier (if any), Minimum Interest Rate (if
any), and Maximum Interest Rate (if any).
6. Redemption or repayment provisions, if any.
7. Settlement date and time.
8. Price.
9. Agent's commission, if any, determined as
provided in the Agreement.
10. Denominations.
11. Net proceeds to the Company.
12. Whether the Note is an OID Note, and if
it is an OID Note, the total amount of
OID, the yield to maturity, the initial
accrual period OID and the applicability
of Modified Payment upon Acceleration
(and, if so, the Issue Price).
13. Any other applicable Terms.
B. The Company will advise the Trustee by facsimile
transmission or other acceptable means of the
information set forth in Settlement Procedure "A"
above.
C. The Company will have 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 Company,
the relevant Agent and the Trustee:
1. Note with customer confirmation.
2. Stub One - For the Trustee.
3. Stub Two - For the relevant Agent.
4. Stub Three - For the Company.
D. The Trustee will complete such Note and
authenticate such Note and deliver it (with the
confirmation) and Stubs One and Two to the
relevant 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 Company
maintained at the Trustee, New York, New York in
funds available for immediate use, of an amount
equal to the price of such Note less such Agent's
commission, if any. In the event that the
instructions given by such Agent for payment to
the account of the Company are revoked, the
Company 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 made.
E. Unless the relevant Agent purchased such Note as
principal, 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 send Stub Three to the Company
by first-class mail. Periodically, the Trustee
will also send to the Company a statement setting
forth the principal amount of the Notes
outstanding as of that date under the Indenture
and setting forth a brief description of any sales
of which the Company has advised the Trustee but
which have not yet been settled.
Settlement Procedures For sales by the Company of Certificated Notes to or
Timetables: through an Agent (unless otherwise specified pursuant
to a Terms Agreement), 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 2:00 p.m. on day before settlement
date
B 3:00 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 relevant Agent
will notify the Company and the Trustee by telephone
and return such Note to the Trustee. Upon receipt of
such notice, the Company will immediately wire
transfer to the account of such 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 Business Day following the settlement
date. If the failure shall have occurred for any
reason other than a default by such Agent in the
performance of its obligations hereunder and under
the Agreement, then the Company will reimburse such
Agent or the Trustee, as appropriate, on an equitable
basis for its loss of the use of the funds during the
period when they were credited to the account of the
Company (such reimbursement for loss of the use of
such funds to be based on the federal funds effective
rate then in effect). 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 Note to the Company.
Posting Rates The Company and the Agents will from time to time
by Company: post the rates of interest per annum to be borne by
and the maturity of Securities that may be sold as a
result of the solicitation of offers by an Agent.
The Company may establish a fixed set of interest
rates and maturities for an offering period
("posting"). If the Company decides to change
already posted rates, it will promptly advise the
Agents to suspend solicitation of offers until the
new posted rates have been established with the
Agent.
Trustee Not to Nothing herein shall be deemed to require the Trustee
Risk Funds: to risk or expend its own funds in connection with
any payments to the Company, the Agents or any
holders of Notes, it being understood by all parties
that payments made by the Trustee to the Company, the
Agents or any holders of Notes shall be made only to
the extent that funds are provided to the Trustee for
such purpose.