1
APPLIED MATERIALS, INC.
$266,931,250
MEDIUM-TERM NOTES, SERIES A
DUE MORE THAN 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
August 24, 1995
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Lehman Brothers Inc.
3 World Financial Center
New York, New York 10285
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Sirs:
Applied Materials, Inc., 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 up to $266,931,250 aggregate initial public
offering price of its Medium-Term Notes, Series A, due more than 9 months to 30
years from date of issue (the "Notes"). The Notes will be issued under an
Indenture dated as of August 24, 1994 (the "Indenture") between the Company and
Harris Trust Company of California, as Trustee (the "Trustee"), and will have
the maturities, interest rates, redemption provisions, if any, and other terms
as set forth in supplements to the Basic Prospectus referred to below.
The Company hereby appoints Morgan Stanley & Co. Incorporated
("Morgan Stanley"), Lehman Brothers, Lehman Brothers Inc. (including its
affiliate Lehman Government Securities Inc.), and J.P. Morgan Securities Inc.
(individually, an "Agent" and collectively, the "Agents") as its agents for the
purpose of soliciting and receiving offers to purchase Notes from the Company by
others and, on the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, each Agent agrees to
use reasonable efforts to solicit and receive offers to purchase Notes upon
terms acceptable to the Company at such times and in such amounts as the Company
shall from
2
time to time specify. In addition, any Agent may also purchase Notes as
principal pursuant to the terms of a terms agreement relating to such sale (a
"Terms Agreement") in accordance with the provisions of Section 2(b) hereof. The
Company reserves the right to appoint additional agents for the purpose of
soliciting and receiving offers to purchase Notes, provided that they are
appointed pursuant to Section 11 hereof or pursuant to agreements with
substantially the same terms and conditions as set forth in this Agreement. The
Company's appointment of additional agents hereunder shall be deemed to include
the right to sell Notes to any such agent as principal pursuant to the
provisions of Section 2(b) hereof. The Company also reserves the right to accept
offers to purchase Notes through an agent other than an Agent, provided that (i)
the Company did not on an unsolicited basis request such agent to solicit offers
to purchase Notes on behalf of the Company, (ii) any agreement with respect to
such purchase will have terms and conditions (including, without limitation,
commission rates) with respect to such purchase substantially the same as the
terms and conditions that would apply to such purchase under this Agreement if
such agent were an Agent (which may be accomplished by incorporating by
reference in such agreement the terms and conditions of this Agreement), (iii)
such agreement shall not provide for further offers or purchases, and (iv) the
Company shall provide the Agents with a copy of such agreement promptly
following such purchase. The Company's right to accept offers to purchase Notes
through an agent other than an Agent shall be deemed to include the right to
accept offers to purchase Notes from any such agent as principal pursuant to the
provisions of Section 2(b) hereof.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including a prospectus, relating to
the Notes. Such registration statement, including the exhibits thereto, as
amended at the Commencement Date (as hereinafter defined), is hereinafter
referred to as the "Registration Statement." The Company proposes to file with
the Commission from time to time, pursuant to Rule 424 under the Securities Act
of 1933, as amended (the "Securities Act"), supplements to the prospectus
included in the Registration Statement that will describe certain terms of the
Notes. The prospectus in the form in which it appears in the Registration
Statement is hereinafter referred to as the "Basic Prospectus." The term
"Prospectus" means the Basic Prospectus together with the prospectus supplement
or supplements (each a "Prospectus Supplement") specifically relating to Notes,
as filed with, or transmitted for filing to, the Commission pursuant to Rule
424. As used herein, the terms "Basic Prospectus" and "Prospectus" shall include
in each case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
-2-
3
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each Agent as of the Commencement Date, as of each
date on which an Agent solicits offers to purchase Notes, as of each date on
which the Company accepts an offer to purchase Notes (including any purchase by
an Agent pursuant to a Terms Agreement), as of each date the Company issues and
delivers Notes and as of each date the Registration Statement or the Basic
Prospectus is amended or supplemented, as follows (it being understood that such
representations, warranties and agreements shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus, each as amended
or supplemented to each such date):
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) 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 in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(iii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that (1) the representations and warranties set forth in this Section
1(b) do not apply (A) to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to an Agent furnished to the
Company in writing by such Agent expressly for use therein or (B) to that part
of the Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), of the Trustee and (2) the representations and warranties set
forth in clauses (iii) and (iv) above, when made as of the Commencement Date or
as of any date on which an Agent solicits offers to purchase Notes or on which
the
-3-
4
Company accepts an offer to purchase Notes, shall be deemed not to cover
information concerning an offering of particular Notes to the extent such
information will be set forth in a supplement to the Basic Prospectus.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and as
then currently being conducted and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(e) Each of this Agreement and any applicable Written Terms
Agreement (as hereinafter defined) has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws relating to or affecting creditors' rights generally
or the effect of general principles of equity, including the possible
unavailability of specific performance or injunctive relief, whether considered
in a proceeding in equity or at law.
(g) The Notes have been duly authorized by the Board of Directors of
the Company and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the purchasers
thereof, will be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws relating to or affecting creditors'
rights generally or the effect of general principles of
-4-
5
equity, including the possible unavailability of specific performance or
injunctive relief, whether considered in a proceeding in equity or at law.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the Notes,
the Indenture and any applicable Written Terms Agreement will not contravene, or
give rise to any additional rights or remedies under, any provision of
applicable law or the Certificate of Incorporation or by-laws of the Company or
any agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as a
whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, the Notes, the Indenture and any applicable Terms
Agreement, except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Notes.
(j) There has not occurred any material adverse change, or any
development which could be reasonably expected to result in a prospective
material adverse change, in the condition, financial or otherwise, or in the
business or operations, of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus.
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described in all material respects (other than
proceedings that would not have material adverse effect on the Company and its
subsidiaries taken as a whole, or on the power or ability of the Company to
perform its obligations under this Agreement, the Notes, the Indenture or any
applicable Terms Agreement or to consummate the transactions contemplated by the
Prospectus) or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed or incorporated by reference as exhibits to the Registration Statement
that are not described, filed or incorporated as required.
-5-
6
(l) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(m) To the best knowledge of the Company after due inquiry, the
Company and its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws which are necessary to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not reasonably be expected to, singly or in the aggregate, have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(n) The Company has a process of conducting periodic internal
reviews relating to compliance by the Company and its subsidiaries with
Environmental Laws. On the basis of such reviews, except as set forth in the
Prospectus, nothing has come to the attention of the Company which would lead it
to believe that costs associated with compliance with Environmental Laws or
liabilities arising due to noncompliance with Environmental Laws (including,
without limitation, any capital or operating expenses required for cleanup,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties) would have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(o) Each of the Company and its subsidiaries owns or possesses
adequate and sufficient licenses or other rights to use all patents, copyrights,
trademarks, service marks, tradenames, technology and knowhow necessary (in any
material respect) to conduct its business in the manner described in the
Prospectus, except such as are not material to the business of the Company and
its subsidiaries taken as a whole and except as disclosed in the Prospectus.
Except as disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with (and knows
of no infringement or conflict with) asserted rights of others with respect to
any patents, copyrights, trademarks, service marks, trade names or knowhow which
would reasonably be expected to result in any material adverse effect upon the
Company and its subsidiaries taken as a whole.
-6-
7
(p) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
Notwithstanding the foregoing, (i) the representations and
warranties set forth in Section 1(b)(iii) and (iv), (g) (except as to due
authorization of the Notes) and (i), when made as of the Commencement Date, or
as of any date on which an Agent solicits offers to purchase Notes, with respect
to any Notes the payments of principal or interest on which will be determined
by reference to one or more currency exchange rates, commodity prices, equity
indices or other factors, shall be deemed not to address the application of the
Commodity Exchange Act, as amended, or the rules, regulations or interpretations
of the Commodity Futures Trading Commission and (ii) the representations and
warranties contained in this Section 1 shall not be deemed to have been made by
the Company as of any date on which an Agent solicits an offer to purchase Notes
if (x) such offer is not accepted by the Company or (y) a fact, condition or
event resulting in a breach of a representation and warranty contained in this
Section 1 is included or incorporated by reference in the Prospectus at or prior
to the acceptance by the Company of such offer to purchase Notes.
2. SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL.
(a) Solicitations as Agent. In connection with an Agent's actions as
agent hereunder, such Agent agrees to use reasonable efforts to solicit offers
to purchase Notes upon the terms and conditions set forth in the Prospectus as
then amended or supplemented.
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 Notes. Upon receipt of notice from the
Company, the Agents will forthwith suspend solicitations of offers to purchase
Notes from the Company until such time as the Company has advised the Agents
that such solicitation may be resumed. While such solicitation is suspended, the
Company shall not be required to deliver any certificates, opinions or letters
in accordance with Sections 5(a), 5(b) and 5(c); provided, however, that if the
Registration Statement or Prospectus is amended or supplemented during the
period of suspension (other than by an amendment or supplement setting forth
solely the terms or a description of particular Notes or providing for a change
the Agents deem to be immaterial), no Agent shall be required to resume
soliciting offers to purchase Notes until the Company has delivered such
certificates, opinions and letters pursuant to Sections 5(a), 5(b) and 5(c) as
such Agent may request.
-7-
8
The Company agrees to pay to each Agent, as consideration for the
sale of each Note resulting from an offer to purchase presented by such Agent to
the Company, a commission in the form of a discount from the purchase price of
such Note equal to the percentage set forth below of the purchase price of such
Note:
Term Commission Rate
---- ---------------
From more than 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%
From 20 years to 30 years .750%
Each Agent shall communicate to the Company, orally or in writing,
each offer to purchase Notes received by such Agent as agent that in its
reasonable judgment should be considered by the Company; provided that, if
requested by the Company, each Agent shall, for a period of 10 business days,
communicate to the Company each offer to purchase Notes received by such Agent
subsequent to the date of such request. The Company shall have the sole right to
accept offers to purchase Notes and may reject any offer in whole or in part.
Each Agent shall have the right to reject any offer to purchase Notes that it
reasonably considers to be unacceptable, and any such rejection shall not be
deemed a breach of its agreements contained herein. The procedural details
relating to the issue and delivery of Notes sold by the Agents as agents and the
payment therefor shall be as set forth in the Administrative Procedures (as
hereinafter defined).
(b) Purchases as Principal. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms of this Agreement. In
connection with each such sale, the Company will enter into a Terms Agreement
that will provide for the sale of such Notes to and the purchase thereof by such
Agent. Each Terms Agreement will take the form of either (i) a written agreement
between such Agent and the Company, which may be substantially in the form of
Exhibit A hereto (a "Written Terms Agreement"), or (ii) an oral agreement
between such Agent and the Company confirmed in writing by such Agent to the
Company which the Company indicates in writing is acceptable.
-8-
9
An Agent's commitment to purchase Notes pursuant to a Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth. Each Terms Agreement shall specify the
principal amount of Notes to be purchased by such Agent pursuant thereto, the
maturity date of such Notes, the price to be paid to the Company for such Notes,
the interest rate and interest rate formula, if any, applicable to such Notes
and any other terms of such Notes. Each such Terms Agreement may also specify
any requirements for officers' certificates, opinions of counsel and letters
from the independent public accountants of the Company pursuant to Section 4
hereof. A Terms Agreement may also specify certain provisions relating to the
reoffering of such Notes by such Agent.
Each Terms Agreement shall specify the time and place of delivery of
and payment for such Notes. Unless otherwise specified in a Terms Agreement, the
procedural details relating to the issue and delivery of Notes purchased by an
Agent as principal and the payment therefor shall be as set forth in the
Administrative Procedures. Each date of delivery of and payment for Notes to be
purchased by an Agent pursuant to a Terms Agreement is referred to herein as a
"Settlement Date."
Unless otherwise specified in a Terms Agreement, if you are
purchasing Notes as principal you may resell such Notes to other dealers. Any
such sales may be at a discount, which shall not exceed the amount set forth in
the Prospectus Supplement relating to such Notes.
(c) Administrative Procedures. The Agents and the Company agree to
perform the respective duties and obligations specifically provided to be
performed in the Medium-Term Notes, Series A, Administrative Procedures
(attached hereto as Exhibit B) (the "Administrative Procedures"), as amended
from time to time. The Administrative Procedures may be amended only by written
agreement of the Company and the Agents.
(d) Delivery. The documents required to be delivered by Section 4 of
this Agreement as a condition precedent to each Agent's obligation to begin
soliciting offers to purchase Notes as an agent of the Company shall be
delivered at the office of Wilson, Sonsini, Goodrich & Rosati, P.C., counsel for
the Agents, not later than 10:00 a.m., San Francisco time, on the date hereof,
or at such other time and/or place as the Agents and the Company may agree upon
in writing, but in no event later than the day prior to the earlier of (i) the
date on which the Agents begin soliciting offers to purchase Notes and (ii) the
first date on which the Company accepts any offer by an Agent to purchase Notes
pursuant to a Terms Agreement. The date of delivery of such documents is
referred to herein as the "Commencement Date."
-9-
10
(e) Obligations Several. The Company acknowledges that
the obligations of the Agents under this Agreement are several and not joint.
3. AGREEMENTS. The Company agrees with each Agent that:
(a) Prior to the termination of the offering of the Notes pursuant
to this Agreement or any Terms Agreement, the Company will not file any
Prospectus Supplement relating to the Notes or any amendment to the Registration
Statement unless the Company has previously furnished to the Agents copies
thereof for their review and will not file any such proposed supplement or
amendment to which the Agents reasonably object; provided, however, that (i) the
foregoing requirement shall not apply to any of the Company's periodic filings
with the Commission required to be filed pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, copies of which filings the Company will cause to be
delivered to the Agents promptly after being transmitted for filing with the
Commission and (ii) any Prospectus Supplement that merely sets forth the terms
or a description of particular Notes shall only be reviewed and approved by the
Agent or Agents offering such Notes. Subject to the foregoing sentence, the
Company will promptly 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. The Company will promptly advise the Agents (i) of the
filing of any amendment or supplement to the Basic Prospectus (except that
notice of the filing of an amendment or supplement to the Basic Prospectus that
merely sets forth the terms or a description of particular Notes shall only be
given to the Agent or Agents offering such Notes), (ii) of the filing and
effectiveness of any amendment to the Registration Statement, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Basic Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Notes for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or notice of suspension of
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof. 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 Notes so
long as it is not reasonably satisfied with such document.
-10-
11
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, any event occurs or condition
exists 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 to make the statements therein, in the light of the
circumstances when the Prospectus, as then amended or supplemented, is delivered
to a purchaser, not misleading, or if, in the opinion of counsel for the Agents
or in the opinion of the Company, it is necessary at any time to amend or
supplement the Prospectus, as then amended or supplemented, to comply with
applicable law, the Company will immediately notify the Agents by telephone
(with confirmation in writing) to suspend solicitation of offers to purchase
Notes and, if so notified by the Company, the Agents shall forthwith suspend
such solicitation and cease using the Prospectus, as then amended or
supplemented. If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, the Company shall decide to
amend or supplement the Registration Statement or Prospectus, as then amended or
supplemented, it shall so advise the Agents 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 Prospectus, as then amended or supplemented,
reasonably satisfactory to the Agents, 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 documents, certificates, opinions and letters furnished to the Agents
pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) in connection
with the preparation and filing of such amendment or supplement are 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 Notes hereunder. Notwithstanding any other provision of
this Section 3(b), until the distribution of any Notes an Agent has purchased as
principal from the Company has been completed, if any event described above in
this paragraph (b) occurs, the Company will, at its own expense, forthwith
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or Prospectus, as then amended or
supplemented, reasonably satisfactory to such Agent, will supply such amended or
supplemented Prospectus to such Agent in such quantities as it may reasonably
request and shall, for a period of 60 days following the date on which such
Agent purchased the Notes, be required to furnish to such Agent pursuant to
paragraph (f) below and Sections 5(a), 5(b) and 5(c) such documents,
certificates, opinions and letters as it may request in connection with the
preparation and filing of such amendment or supplement; provided, however, that
the Company shall not be required to furnish any such documents,
-11-
12
certificates, opinions or letters pursuant to this Section 3(b) to such Agent if
such documents, certificates, opinions or letters were delivered to such Agent
on the Settlement Date relating to such Notes.
(c) The Company will make generally available to its security
holders and to the Agents as soon as practicable earning statements that satisfy
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder covering twelve month periods
beginning, in each case, not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in Rule 158 under the
Securities Act) of the Registration Statement with respect to each sale of
Notes. If such fiscal quarter is the last fiscal quarter of the Company's fiscal
year, such earning statement shall be made available not later than 90 days
after the close of the period covered thereby and in all other cases shall be
made available not later than 45 days after the close of the period covered
thereby.
(d) The Company will furnish to Morgan Stanley, without charge, a
signed copy of the Registration Statement, including exhibits and all amendments
thereto, and to each other Agent, without charge, a conformed copy of the
Registration Statement, including exhibits and all amendments thereto, and as
many copies of the Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto as such Agent may reasonably request.
(e) The Company will endeavor to qualify the Notes for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the Agents
shall reasonably request and to maintain such qualifications for as long as the
Agents shall reasonably request.
(f) The Company shall furnish to the Agents 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 Notes, this Agreement,
the Administrative Procedures, any Terms Agreement and the performance by the
Company of its obligations hereunder or thereunder as the Agents may from time
to time reasonably request.
(g) The Company shall notify the Agents promptly in writing of any
downgrading, or of its receipt of any notice of any intended or potential
downgrading, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; provided, however,
that, if the Company has instructed the Agents to suspend the solicitation of
offers to purchase Notes pursuant to Section 2(a), the Company
-12-
13
shall not be required, during the time that solicitation is suspended, to notify
the Agents of any such downgrading or of the receipt of any such intended or
potential downgrading; provided further that before any Agent shall be required
to resume soliciting offers to purchase Notes, the Company shall confirm in
writing to such Agent if any downgrading has occurred and if any notice of any
intended or potential downgrading has been received during the time that such
solicitation was suspended.
(h) The Company will, whether or not any sale of Notes is
consummated, pay all expenses incident to the performance of its obligations
under this Agreement and any Terms Agreement, including: (i) the preparation and
filing of the Registration Statement and the Prospectus and all amendments and
supplements thereto, (ii) the preparation, issuance and delivery of the Notes,
(iii) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel, (iv) the qualification of the Notes under
securities or Blue Sky laws in accordance with the provisions of Section 3(e),
including filing fees and the fees and disbursements of counsel for the Agents
in connection therewith and in connection with the preparation of any Blue Sky
or Legal Investment Memoranda, (v) the printing and delivery to the Agents in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of the Prospectus and any amendments or supplements
thereto, (vi) the printing and delivery to the Agents of copies of any Blue Sky
or Legal Investment Memoranda, (vii) any fees charged by rating agencies for the
rating of the Notes, (viii) any expenses incurred by the Company in connection
with a "road show" presentation to potential investors and (ix) the reasonable
fees and disbursements of counsel for the Agents in connection with the offering
and sale of the Notes, including any opinions to be rendered by such counsel
hereunder, and (x) any out-of-pocket expenses incurred by the Agents; provided
that any such out-of-pocket expenses incurred by the Agents shall have been
approved in advance by the Company.
(i) If provided for in the applicable Terms Agreement, during the
period beginning the date of any Terms Agreement and continuing to and including
the Settlement Date with respect to such Terms Agreement, the Company will not,
without such Agent's prior written consent, offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or warrants to purchase
debt securities of the Company having terms substantially similar to the Notes
to which such Terms Agreement relates (other than (i) the Notes that are to be
sold pursuant to such Terms Agreement, (ii) Notes previously agreed to be sold
by the Company and (iii) commercial paper issued in the ordinary course of
business), except as may otherwise be provided in such Terms Agreement.
-13-
14
4. CONDITIONS OF THE OBLIGATIONS OF THE AGENTS. Each Agent's
obligation to solicit offers to purchase Notes as agent of the Company, each
Agent's obligation to purchase Notes pursuant to any Terms Agreement and the
obligation of any other purchaser to purchase Notes will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in each
certificate furnished pursuant to the provisions hereof and to the performance
and observance by the Company of all covenants and agreements herein contained
on its part to be performed and observed (in the case of an Agent's obligation
to solicit offers to purchase Notes, at the time of such solicitation, and, in
the case of an Agent's or any other purchaser's obligation to purchase Notes, at
the time the Company accepts the offer to purchase such Notes and at the time of
issuance and delivery) and (in each case) to the following additional conditions
precedent when and as specified:
(a) Prior to such solicitation or purchase, as the case
may be:
(i) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the business or operations, of the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus, as amended or
supplemented at the time of such solicitation or at the time such offer to
purchase was made, that, in the judgment of the relevant Agent, is
material and adverse and that makes it, in the judgment of such Agent,
impracticable to market the Notes on the terms and in the manner
contemplated by the Prospectus, as so amended or supplemented;
(ii) there shall not have occurred any (A) suspension or material
limitation of trading generally on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., or any other over-the-counter
market, (B) suspension of trading of any securities of the Company on any
exchange or in any over-the-counter market, (C) declaration of a general
moratorium on commercial banking activities in New York by either Federal
or New York State authorities or (D) any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the relevant Agent, is material and adverse and,
in the case of any of the events described in clauses (ii)(A) through (D),
such event, singly or together with any other such event, makes it, in the
judgment of such Agent, impracticable to market the Notes on the terms and
in the manner contemplated by the Prospectus, as amended or
-14-
15
supplemented at the time of such solicitation or at the time
such offer to purchase was made; and
(iii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading, in the
rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(A) except, in each case described in paragraph (i), (ii) or (iii)
above, as disclosed to the relevant Agent in writing by the Company prior to
such solicitation or, in the case of a purchase of Notes, as disclosed to the
relevant Agent before the offer to purchase such Notes was made or (B) unless in
each case described in (ii) above, the relevant event shall have occurred and
been known to the relevant Agent before such solicitation or, in the case of a
purchase of Notes, before the offer to purchase such Notes was made.
(b) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, the relevant Agents shall have
received:
(i) The opinion, dated as of such date, of Orrick, Herrington &
Sutcliffe, outside counsel for the Company, to the effect that:
(A) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has the full corporate power and corporate authority to
own, lease and operate its properties and conduct its business as
described in the Prospectus, as then amended or supplemented;
(B) each of this Agreement and any applicable Written Terms
Agreement has been duly authorized by all necessary corporate action
on the part of the Company and has been duly executed and delivered
by the Company;
(C) the Indenture has been duly authorized by all necessary
corporate action on the part of the Company and has been executed
and delivered by the Company; the Indenture is a valid and binding
agreement of the Company enforceable against the Company in
accordance with its terms except as (a) the enforceability thereof
may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and (b) the enforceability
thereof may be limited by general principles of equity and the
unavailability of specific
-15-
16
performance or injunctive relief; the Indenture is qualified under
the Trust Indenture Act;
(D) the Notes have been duly authorized by the Board of
Directors of the Company and by the Public Offering Committee
thereof and, when authorized by an Authorized Officer (as defined in
the resolutions of the Public Offering Committee) or by an employee
duly authorized by an Authorized Officer, the Notes will have been
duly authorized by all necessary corporate action on the part of the
Company and, when the Notes have been duly completed to insert the
terms thereof, if executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
purchasers thereof on the date of such opinion, would be (1)
entitled to the benefits of the Indenture and (2) valid and binding
agreements of the Company enforceable against the Company in
accordance with their respective terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and (b) the
enforceability thereof may be limited by general principles of
equity and the unavailability of specific performance or injunctive
relief;
(E) the execution, delivery and performance by the Company of
this Agreement, the Notes, the Indenture and any applicable Written
Terms Agreement on the date of such opinion (1) do not conflict with
or violate the Company's Certificate of Incorporation or by-laws,
(2) to such counsel's knowledge, do not conflict with or violate or
constitute a breach of, or constitute a default under, the Bank
Agreement or any agreement set forth as an exhibit to any of the
documents incorporated by reference in the Prospectus, as then
amended or supplemented, (3) to such counsel's knowledge, do not
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company in any manner
that would have a material adverse effect on the condition
(financial or other), results of operations, business or business
prospects of the Company and its subsidiaries, taken as a whole, and
(4) do not violate applicable law;
(F) no permit, authorization, consent, approval of or
qualification with any U.S. federal or state governmental authority
is required for the execution, delivery or performance by the
Company of its obligations under this Agreement, the Notes, the
Indenture and any applicable Terms Agreement, except such as have
been obtained under the Securities Act and such as may be
-16-
17
required under state or other Blue Sky laws (on which such counsel
need not express any opinion) in connection with the offer and sale
of the Notes;
(G) to such counsel's knowledge, except as set forth in the
Prospectus, as then amended or supplemented, there is no action,
suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency now pending or overtly
threatened in writing against or affecting the Company which would
require disclosure in the Registration Statement or the Prospectus,
as then amended or supplemented;
(H) the terms and provisions of the Notes conform in all
material respects to the description thereof contained in the
Prospectus, as then amended or supplemented; the statements (1) in
the Prospectus, as then amended or supplemented, under the captions
"Description of Debt Securities" and "Description of Capital Stock"
(in the Basic Prospectus), "Description of Notes" (in the Prospectus
Supplement) and "Plan of Distribution" (in the Basic Prospectus and
in the Prospectus Supplement) and (2) in the Registration Statement
under Item 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize
the matters referred to therein;
(I) the Registration Statement is effective under the
Securities Act and, to the best of such counsel's knowledge, no
proceedings for a stop order have been instituted or are pending or
threatened under the Securities Act and any required filings
pursuant to Rule 424(b) have been made in accordance therewith;
(J) the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (except the financial
statements, schedules and other financial and statistical
information contained or incorporated by reference therein and that
part of the Registration Statement that constitutes the Form T-1 as
to which such counsel need not express any opinion), as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Securities Act and
the rules and regulations of the Commission thereunder; provided
that in the case of an opinion delivered on the Commencement Date or
pursuant to Section 5(b), the opinion and belief set forth in this
subparagraph (J) shall be deemed not to cover information
-17-
18
concerning an offering of particular Notes to the extent
such information will be set forth in a supplement to the
Basic Prospectus;
(K) each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus, as then amended or
supplemented (except the financial statements, schedules and other
financial and statistical information contained or incorporated by
reference therein as to which such counsel need not express any
opinion), complied when it was filed as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder;
(L) nothing has come to such counsel's attention to cause it
to believe that (1) (except for financial statements, schedules and
other financial and statistical information contained or
incorporated by reference therein and that part of the Registration
Statement that constitutes the Form T-1 as to which such counsel
need not express any belief) the Registration Statement, at the time
it became effective contained, and as of the date such opinion is
delivered contains, any untrue statement of a material fact or
omitted or omits, respectively, to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and (2) (except for financial statements, schedules and
other financial and statistical information contained therein as to
which such counsel need not express any belief) the Prospectus as of
its issue date and, as then amended or supplemented, if applicable,
as of the date such opinion is delivered contained or contains,
respectively, any untrue statement of a material fact or omitted or
omits, respectively, to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that in the case of
an opinion delivered on the Commencement Date or pursuant to Section
5(b), the opinion and belief set forth in clause (2) above shall be
deemed not to cover information concerning an offering of particular
Notes to the extent such information will be set forth in a
supplement to the Basic Prospectus;
(M) such counsel is of the opinion ascribed to it in the
Prospectus, as then amended or supplemented, under the caption
"Taxation," and
(N) the Company is not an "investment company" or
an entity "controlled" by an "investment company," as
-18-
19
such terms are defined in the Investment Company Act of
1940, as amended.
(ii) The opinion, dated as of such date, of the Vice President,
Legal Affairs and Intellectual Property, of the Company, to the effect that:
(A) each of the Company's Significant Subsidiaries (as such
term is defined in Rule 405 under the Securities Act) (each, a
"Subsidiary" and collectively, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
with full power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus,
as then amended or supplemented, and as then currently being
conducted, and the Company and each Subsidiary is duly qualified to
do business and is in good standing in each jurisdiction in which
the character of the business conducted by it or the location of the
properties owned or leased by it makes such qualification necessary,
except where the failure to be so qualified would not have a
material adverse effect on the condition (financial or other),
results of operations, business or business prospects of the Company
and its subsidiaries, taken as a whole;
(B) to such counsel's knowledge, except as described in the
Prospectus, as then amended or supplemented, there are no rights to
subscribe for or to purchase any securities of the Company pursuant
to any agreement to which the Company or any of the Subsidiaries is
a party or by which it or any of its properties is bound; to such
counsel's knowledge, no holders of shares of Common Stock of the
Company have registration rights with respect to such securities;
(C) the execution and delivery by the Company of this
Agreement, the Notes, the Indenture and any applicable Written Terms
Agreement and the consummation by the Company of the transactions
contemplated thereby (i) do not conflict with or violate the charter
documents of any Subsidiary, (ii) to such counsel's knowledge, do
not result in the material breach or violation of any of the terms
or provisions of, or constitute a material default under, any
agreement to which the Company or any of the Subsidiaries is a party
or by which it is or any of its properties is bound, and (iii) do
not violate any applicable law or any judgment, order or decree of
any court or any governmental agency or body having jurisdiction
over the Company or any of the Subsidiaries,
-19-
20
in each case in any manner that would have a material adverse
effect on the condition (financial or other), results of
operations, business or business prospects of the Company and
its subsidiaries, taken as a whole, or that would affect the
power or ability of the Company in any manner to perform its
obligations under this Agreement, the Notes, the Indenture or
any applicable Written Terms Agreement or to consummate the
transactions contemplated by the Prospectus, as then amended or
supplemented;
(D) there is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or
other agency now pending or, to such counsel's knowledge,
threatened against or affecting the Company or any Subsidiary
or any of their respective properties, other than (i)
proceedings fairly summarized in all material respects in the
Prospectus, as then amended or supplemented, and (ii)
proceedings which are not likely to have a material adverse
effect on the Company and its subsidiaries, taken as a whole,
or on the power or ability of the Company to perform its
obligations under this Agreement, the Notes, the Indenture or
any applicable Written Terms Agreement or to consummate the
transactions contemplated thereby;
(E) the statements in Item 3 -- Legal Proceedings, of
the Company's most recent Annual Report on Form 10-K
incorporated by reference in the Prospectus and in Part II,
Item 1 -- Legal Proceedings, of the Company's Quarterly Reports
on Form 10-Q, if any, filed since such Annual Report, insofar
as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents or proceedings and fairly summarize in all material
respects the matters referred to therein;
(F) to such counsel's knowledge, the Company and its
Subsidiaries are in compliance with all applicable
Environmental Laws, have received all permits, licenses or
other approvals required of them under all applicable
Environmental Laws to conduct their respective businesses and
are in compliance with all terms and conditions of such
permits, licenses or approvals, in each case (i) except as
described in or contemplated by the Prospectus and (ii) except
where such noncompliance with such Environmental Laws, failure
to receive such required permits, licenses or approvals or
failure to comply with the terms and conditions of such
permits, licenses or approvals would not reasonably be expected
to, singly or
-20-
21
in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(G) to such counsel's knowledge and except as
described in or contemplated by the Prospectus, as then amended
or supplemented, (i) each of the Company and its Subsidiaries
owns or possesses adequate and sufficient licenses or other
rights to use, all patents, copyrights, trademarks, service
marks, trade names, technology and knowhow necessary in any
material respect to conduct its business as described in the
Prospectus, as then amended or supplemented, and (ii) neither
the Company nor any of its Subsidiaries has received any notice
of infringement or conflict with (and knows of no infringement
or conflict with) asserted rights of others with respect to any
patents, copyrights trademarks, service marks, trade names or
knowhow which would reasonably be expected to result in any
material adverse effect upon the Company and its subsidiaries,
taken as a whole; and
(H) such counsel does not know of any statutes,
regulations, contracts, indentures, mortgages, loan agreements,
leases or other documents of a character required to be
described in the Registration Statement or the Prospectus, as
then amended or supplemented, or to be filed or incorporated by
reference as exhibits to the Registration Statement that are
not described, filed or incorporated by reference as required
by the Securities Act and the rules and regulations of the
Commission thereunder.
(iii) The opinion, dated as of such date, of Wilson,
Sonsini, Goodrich & Rosati, P.C., counsel for the Agents, covering the
matters in subparagraphs (B), (C), (D), (H) (but only as to the
statements in the Prospectus, as then amended or supplemented, under
the captions "Description of Debt Securities" (in the Basic
Prospectus), "Description of Notes" (in the Prospectus Supplement) and
"Plan of Distribution" (in the Basic Prospectus and in the Prospectus
Supplement)), (J) and (L) in paragraph (b)(i) above.
Notwithstanding the foregoing, the opinions described
in subparagraphs (D) (except as to due authorization of the Notes),
(E), (H)(1), (J) and (L)(2) of paragraph (b)(i) above and subparagraph
(C) of paragraph (b)(ii) above, when contained in an opinion delivered
on the Commencement Date or pursuant to Section 5(b), shall be deemed
not to address the application of the Commodity Exchange Act, as
amended, or the rules, regulations or interpretations of the Commodity
Futures Trading Commission to Notes the payments of principal or
interest on which will be determined by reference to one or
-21-
22
more currency exchange rates, commodity prices, equity indices
or other factors.
With respect to subparagraphs (J) and (L) of paragraph
(b)(i) above, Orrick, Herrington & Sutcliffe may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are
without independent check or verification, except as specified. With
respect to subparagraphs (J) and (L) of paragraph (b)(i) above, Wilson,
Sonsini, Goodrich & Rosati, P.C., may state that their opinion and
belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto (but not including documents incorporated therein by reference)
and review and discussion of the contents thereof (including documents
incorporated therein by reference), but are without independent check
or verification, except as specified.
The opinion of Orrick, Herrington & Sutcliffe
described in paragraph (b)(i) above shall be rendered to the Agents at
the request of the Company and shall so state therein.
(c) On the Commencement Date and, if called for by any
Terms Agreement, on the corresponding Settlement Date, the relevant Agents shall
have received a certificate, dated the Commencement Date or such Settlement
Date, as the case may be, and signed by an executive officer of the Company, to
the effect set forth in subparagraph (a)(iii) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of such date and that the Company has complied with all of
the agreements and satisfied all of the conditions on its part to be performed
or satisfied on or before such date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(d) On the Commencement Date and, if called for by any
Terms Agreement, on the corresponding Settlement Date, Price Waterhouse LLP,
independent public accountants, shall have furnished to the relevant Agents a
letter or letters, dated the Commencement Date or such Settlement Date, as the
case may be, in form and substance satisfactory to such 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 contained in
-22-
23
or incorporated by reference into the Prospectus, as then amended or
supplemented.
(e) On the Commencement Date and on each Settlement Date, the
Company shall have furnished to the relevant Agents such appropriate further
information, certificates and documents as they may reasonably request.
5. ADDITIONAL AGREEMENTS OF THE COMPANY. (a) Except as
set forth in Section 2(a), each time the Registration Statement or Prospectus is
amended or supplemented (other than by an amendment or supplement setting forth
solely the terms or a description of particular Notes or providing for a change
the Agents deem to be immaterial), if requested by an Agent, the Company will
deliver or cause to be delivered forthwith to each Agent a certificate signed by
an executive officer of the Company, dated the date of such amendment or
supplement, as the case may be, in form reasonably satisfactory to the Agents,
of the same tenor as the certificate referred to in Section 4(c) relating to the
Registration Statement or the Prospectus as amended or supplemented to the time
of delivery of such certificate.
(b) Each time the Company furnishes a certificate pursuant to
Section 5(a), the Company will furnish or cause to be furnished forthwith to
each Agent written opinions of independent counsel for the Company and of the
Vice President, Legal Affairs and Intellectual Property, of the Company. Any
such opinions shall be dated the date of such amendment or supplement, as the
case may be, shall be in a form satisfactory to the Agents and shall be of the
same tenor as the opinions referred to in Sections 4(b)(i) and (ii), but
modified to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such opinion. In lieu of any such
opinion, counsel last furnishing such an opinion to an Agent may furnish to each
Agent a letter to the effect that such Agent may rely on such last opinion to
the same extent as though it were dated the date of such letter (except that
statements in such last opinion will be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to the time of delivery
of such letter.)
(c) Except as set forth in Section 2(a), each time the
Registration Statement or the Prospectus is amended or supplemented to set forth
amended or supplemental financial information or such amended or supplemental
information is incorporated by reference in the Prospectus, if requested by an
Agent, the Company shall cause its independent public accountants forthwith to
furnish each Agent with a letter, dated the date of such amendment or
supplement, as the case may be, in form satisfactory to the Agents, of the same
tenor as the letter referred to in Section 4(d), with regard to the amended or
supplemental financial information included or
-23-
24
incorporated by reference in the Registration Statement or the Prospectus as
amended or supplemented to the date of such letter.
6. INDEMNITY AND CONTRIBUTION. (a) The Company agrees
to indemnify and hold harmless each Agent and each person, if any, who controls
any 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, any legal or other
expenses reasonably incurred by any Agent or any such controlling person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to such
Agent furnished to the Company in writing by such Agent expressly for use
therein; provided, however, that the indemnity agreement
contained in this paragraph (a) with respect to any preliminary prospectus shall
not inure to the benefit of any Agent (or any person controlling such Agent)
from whom the person asserting any such losses, claims, damages or liabilities
purchased Notes, if a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Agent to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Notes to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
(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, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Agent, but only with reference to information relating to such Agent
furnished to the Company in writing by such Agent expressly for use in the
Registration Statement or the Prospectus or any amendments or supplements
thereto. The information set forth on the cover page of, and under the caption
"Plan of Distribution" in the Prospectus, insofar as it relates to the
distribution by the Agents of the Notes, constitutes the only written
information furnished by the Agents to the Company for use in the Registration
Statement or Prospectus.
-24-
25
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party 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 party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party 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 party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings 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 such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley or, if Morgan Stanley is not an
indemnified party and is not reasonably likely to become an indemnified party,
by the Agents that are indemnified parties, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party 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 party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could
-25-
26
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein in connection with any offering of Notes, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party 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 hand from the offering of
such Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and each Agent on the other hand 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 hand in connection with the offering of such Notes
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of such Notes (before deducting expenses) received by
the Company bear to the total discounts and commissions received by each Agent
in respect thereof. The relative fault of the Company on the one hand and each
Agent on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Each Agent's obligation to contribute pursuant to this
Section 6 shall be several in the proportion that the principal amount of the
Notes 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
Notes the sale of which by or through any Agent gave rise to such losses,
claims, damages or liabilities, and not joint.
(e) The Company and the Agents agree that it would not be just
or equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation (even if the 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 in paragraph (d) of this
Section 6. The amount paid or payable by an indemnified party as a result of the
-26-
27
losses, claims, damages and liabilities referred to in paragraph (d) of this
Section 6 shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Agent shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes referred to in paragraph (d) of this Section 6 that were offered and
sold to the public 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 remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 6, representations, warranties and other statements of the Company, its
officers and the Agents set forth in or made pursuant to this Agreement or any
Terms Agreement will remain in full force and effect regardless of (i) any
termination of this Agreement or any such Terms Agreement, (ii) any
investigation made by or on behalf of any Agent or any person controlling any
Agent or by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Notes.
7. POSITION OF THE AGENTS. In acting under this
Agreement and in connection with the sale of any Notes by the Company (other
than Notes sold to an Agent pursuant to a Terms Agreement), each Agent is acting
solely as agent of the Company and does not assume any obligation towards or
relationship of agency or trust with any purchaser of Notes. An Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company, but such Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any reason. If the
Company shall default in its obligations to deliver Notes to a purchaser whose
offer it has accepted (other than as a result of the purchaser exercising its
right to refuse to purchase the Notes because of the failure of any condition of
such purchaser's obligation to purchase Notes pursuant to Section 4 hereof), the
Company shall hold the relevant Agent harmless against any loss, claim, damage
or liability arising from or as a result of such default and shall, in
particular, pay to such Agent the commission it would have received had such
sale been consummated.
-27-
28
8. TERMINATION. This Agreement may be terminated at any
time by the Company or, as to any Agent, by the Company or such Agent upon the
giving of written notice of such termination to the other parties hereto, but
without prejudice to any rights, obligations or liabilities of any party hereto
accrued or incurred prior to such termination. The termination of this Agreement
shall not require termination of any Terms Agreement, and the termination of any
such Terms Agreement shall not require termination of this Agreement. If this
Agreement is terminated, the provisions of the third paragraph of Section 2(a),
Section 2(e), the last sentence of Section 3(b) and Sections 3(c), 3(h), 6, 7,
9, 10 and 13 shall survive; provided that if at the time of termination
an offer to purchase Notes has been accepted by the Company but the time of
delivery to the purchaser or its agent of such Notes has not occurred, the
provisions of Sections 2(b), 2(c), 3(a), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall
also survive until such delivery has been made.
9. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to Morgan Stanley, will be mailed,
delivered or telefaxed and confirmed to Morgan Stanley at 1251 Avenue of the
Americas, New York, New York 10020, Attention: Manager, Credit Department
(telefax number: 212-703-4575), with a copy to 1221 Avenue of the Americas, New
York, New York 10020, Attention: Managing Director, Debt Syndicate (telefax
number: 212-764-7490); if sent to Lehman Brothers Inc., will be mailed,
delivered or telefaxed and confirmed to Lehman Brothers Inc. at 3 World
Financial Center, 12th Floor, New York, New York 10285-1200, Attention: MTN
Product Management (telefax number: 212-528-1718); if sent to J.P. Morgan
Securities Inc., will be mailed, delivered or telefaxed and confirmed to J.P.
Morgan Securities Inc. at 60 Wall Street, New York, New York 10260, Attention:
Medium-Term Note Desk, 3rd Floor (telefax number: 212-648-5907); or, if sent to
the Company, will be mailed, delivered or telefaxed and confirmed to the Company
at 3050 Bowers Avenue, Santa Clara, California 95054, Attention: Treasurer
(telefax number: 408-986-7825).
10. SUCCESSORS. This Agreement and any Terms Agreement
will inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers, directors and controlling persons
referred to in Section 6 and the purchasers of Notes (to the extent expressly
provided in Section 4), and no other person will have any right or obligation
hereunder.
11. 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, without the consent of any Agent or the necessity of any Agent
signing an amendment or supplement to this Agreement, amend this Agreement to
add as a party hereto one
-28-
29
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 Company shall give each Agent prompt
notice of the addition of any party hereto as an Agent hereunder.
12. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. 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.
-29-
30
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and you.
Very truly yours,
APPLIED MATERIALS, INC.
By /s/ Nancy H. Handel
--------------------------------
Title: Vice President, Corporate
Finance
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
MORGAN STANLEY & CO. INCORPORATED
By /s/ Laurie Campbell
--------------------------------
Title: Vice President
LEHMAN BROTHERS INC.
By /s/ John F. Coghlan
--------------------------------
Title: Managing Director
J.P. MORGAN SECURITIES INC.
By /s/ Thomas Hagerstrom
--------------------------------
Title: Vice President
-30-
31
EXHIBIT A
APPLIED MATERIALS, INC.
MEDIUM-TERM NOTES, SERIES A
TERMS AGREEMENT
____________ __, 19__
Applied Materials, Inc.
3050 Bowers Avenue
Santa Clara, California 95054
Attention:
Re: Distribution Agreement dated August 24, 1995
(the "Distribution Agreement")
We agree to purchase your Medium-Term Notes, Series A, having
the following terms:
[We agree to purchase, severally and not jointly, the principal
amount of Notes set forth below opposite our names:
Principal Amount
Name of Notes
---- ----------------
[Insert syndicate list](1)
Total . . . . . . $
===========]
- ---------------
(1) Delete if the transaction will not be syndicated.
A-1
32
The Notes shall have the following terms:
All Notes: Fixed Rate Notes: Floating Rate
- --------- ---------------- Notes:
-------------
Principal amount: Interest Rate: Base rate:
Purchase price: Applicability Index maturity:
of modified
Price to public: payment upon Spread (plus or
acceleration: minus):
Settlement date
and time: If yes, state Spread
issue price: multiplier:
Place of
delivery: Amortization Alternate rate
schedule: event spread:
Maturity date: Initial interest
Original issue date: rate:
Interest accrual Initial interest
date: reset date:
Initial accrual Interest reset
period OID: dates:
Total amount Interest reset
of OID: period:
Original yield Maximum interest
to maturity: rate:
Optional repayment Minimum interest
date(s): rate:
Optional redemption Interest payment
date(s): period:
Initial redemption Interest payment
date: date(s):
Initial redemption Calculation
percentage: agent:
Annual redemption Reporting
percentage Service:
reduction:
Index Currency:
Other provisions:
The provisions of Sections 1, 2(b) and 2(c) and 3 through 6, 9,
10 and 13 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be
A-2
33
deemed to have the same force and effect as if set forth in full herein.
[During the period beginning the date hereof and continuing to
and including the Settlement Date, the Company will not, without the prior
written consent of [NAME OF RELEVANT AGENT(S)], offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or warrants to purchase
debt securities of the Company having terms substantially similar to the Notes
to which this Terms Agreement relates (other than (i) the Notes that are to be
sold pursuant hereto, (ii) Notes previously agreed to be sold by the Company and
(iii) commercial paper issued in the ordinary course of business).]
[If on the Settlement Date any one or more of the Agents shall
fail or refuse to purchase Notes that it has or they have agreed to purchase on
such date, and the aggregate amount of Notes which such defaulting Agent or
Agents agreed but failed or refused to purchase is not more than one-tenth of
the aggregate amount of the Notes to be purchased on such date, the other Agents
shall be obligated severally in the proportions that the amount of Notes set
forth opposite their respective names above bears to the aggregate amount of
Notes set forth opposite the names of all such non-defaulting Agents, or in such
other proportions as _____________ may specify, to purchase the Notes which such
defaulting Agent or Agents agreed but failed or refused to purchase on such
date; provided that in no event shall the amount of Notes that any Agent
has agreed to purchase pursuant to this Agreement be increased pursuant to this
paragraph by an amount in excess of one-ninth of such amount of Notes without
the written consent of such Agent. If on the Settlement Date any Agent or Agents
shall fail or refuse to purchase Notes and the aggregate amount of Notes with
respect to which such default occurs is more than one-tenth of the aggregate
amount of Notes to be purchased on such date, and arrangements satisfactory to
___________ and the Company for the purchase of such Notes are not made within
36 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Agent or the Company. In any such case either
___________ or the Company shall have the right to postpone the Settlement Date
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Agent from liability in respect of any default
of such Agent under this Agreement.] (2)
This Agreement is subject to termination on the terms
incorporated by reference herein. If this Agreement is so terminated, the
provisions of Sections 3(h), 6, 9, 11 and 13 of the Distribution Agreement shall
survive for the purposes of this Agreement.
- ---------------
(2) Delete if the transaction will not be syndicated.
A-3
34
The following information, opinions, certificates, letters and
documents referred to in Section 4 of the Distribution Agreement will be
required: ________________.
[NAME OF RELEVANT AGENT(S)]
By _______________________
Title:
Accepted:
APPLIED MATERIALS, INC.
By ________________________
Title:
A-4
35
EXHIBIT B
APPLIED MATERIALS, INC.
MEDIUM-TERM NOTES, SERIES A
ADMINISTRATIVE PROCEDURES
---------------------------------
Explained below are the administrative procedures and specific
terms of the offering of Medium-Term Notes, Series A (the "Notes"), on a
continuing basis by Applied Materials, Inc. (the "Company") pursuant to the
Distribution Agreement, dated as of August 24, 1995 (the "Distribution
Agreement"), among the Company and Morgan Stanley & Co. Incorporated, Lehman
Brothers Inc. (including Lehman Government Securities Inc.) and J.P. Morgan
Securities Inc. (the "Agents"). The Notes will be issued under an Indenture
dated as of August 24, 1994 (the "Indenture") between the Company and Harris
Trust Company of California, as trustee (together with Harris Trust and Savings
Bank, acting as agent of the trustee, the "Trustee"). In the Distribution
Agreement, the Agents have agreed to use reasonable efforts to solicit purchases
of the Notes, and the administrative procedures explained below will govern the
issuance and settlement of any Notes sold through an Agent, as agent of the
Company. An Agent, as principal, may also purchase Notes for its own account,
and if requested by such Agent, the Company and such Agent will enter into a
terms agreement (a "Terms Agreement"), as contemplated by the Distribution
Agreement. The administrative procedures explained below will govern the
issuance and settlement of any Notes purchased by an Agent, as principal, unless
otherwise specified in the applicable Terms Agreement.
Harris Trust and Savings Bank, acting as agent of Harris Trust
Company of California, will be the Registrar, Authenticating Agent and Paying
Agent for the Notes and will perform the duties specified herein. 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 as set forth in the Indenture, an owner of a
Book-Entry Note will not be entitled to receive a Certificated Note.
36
Book-Entry Notes, which may be payable only 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. 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, the Notes or any prospectus
supplement relating to the Notes shall be used herein as therein defined.
The Company will advise the Agents in writing of the employees
of the Company with whom the Agents are to communicate regarding offers to
purchase Notes and the related settlement details.
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
Representation from the Company and the Trustee to DTC, dated as of August 21,
1995, and a Medium-Term Note Certificate Agreement between the Trustee and DTC,
dated as of July 2, 1990 (the "MTN Certificate Agreement"), 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. $200,000,000
principal amount of all such Notes
that have the same Original Issue
Date, Maturity Date and other 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
B-2
37
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 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. No Global
Security will represent any
Certificated Note.
Denominations: Book-Entry Notes will be issued in
principal amounts of U.S. $100,000 or
any amount in excess thereof that is
an integral multiple of U.S. $1,000.
Global Securities will be denominated
in principal amounts not in excess of
U.S. $200,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of
$200,000,000 would, but for the
preceding sentence, be represented by
a single Global Security, then one
Global Security will be issued to
represent each U.S. $200,000,000
principal amount of such Book-Entry
Note or Notes and an additional
Global Security will be issued to
represent any remaining principal
amount of such Book-Entry Note or
Notes. In such a case, each of the
Global Securities representing such
Book-Entry Note or Notes shall be
assigned the same CUSIP number.
Preparation If any offer to purchase a Book-
of Pricing Entry Note is accepted by or on
Supplement: behalf of the Company, the Company
will prepare a pricing supplement (a
"Pricing Supplement") reflecting the
terms of such Note. The Company (i)
will arrange to file such Pricing
Supplement with the Commission in
B-3
38
accordance with the applicable
paragraph of Rule 424(b) under the
Act and (ii) will, not later than the
Business Day following the date on
which the offer to purchase the
Book-Entry Note is accepted, deliver
such Pricing Supplement by facsimile
to the relevant Agent.
In each instance that a Pricing
Supplement is prepared, the relevant
Agent 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 offers
accepted by the Company will be
settled on the third Business Day
next succeeding the date of
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
Procedures: to each Book-Entry Note sold by the
Company to or through an Agent
(unless otherwise specified pursuant
to a Terms Agreement) shall be as
follows:
A. The relevant Agent will advise
the Company by telephone that
such Note is a Book-Entry Note
and of the following settlement
information:
B-4
39
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed
Book-Entry Note, the Interest
Rate, the Interest Payment
Dates 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), 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), Maximum
Interest Rate (if any) and the
Alternate Rate Event Spread
(if any).
4. Redemption or repayment
provisions (if any).
5. Settlement date and time
(Original Issue Date).
6. Interest Accrual Date.
7. Purchase Price.
8. Agent's commission (if any)
determined as provided in the
Distribution Agreement.
9. Any original issue discount
information for tax purposes.
B-5
40
10. Trade Date.
11. Depositary Participant
Account Number of such Agent.
12. [Whether or not such Agent
is purchasing such Note as
principal, and, if such Note
is sold through such Agent,
that neither such Agent nor
its affiliate is the purchaser
of such Note.]
13. Any other applicable
terms.
B. The Company will advise the
Trustee by telephone or
electronic transmission
(confirmed in writing at any time
on the same date) of the
information set forth in
Settlement Procedure "A" above.
The Company will then assign a
CUSIP number to the Global
Security representing such Note
and will notify the Trustee and
the relevant Agent of such CUSIP
number by telephone 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
B-6
41
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).
5. Whether such Note is an
Amortizing Note (by an
appropriate notation in the
comments field of DTC's
Participant Terminal System).
6. The number of participant
accounts to be maintained by
DTC on behalf of the relevant
Agent and the Trustee.
D. The Trustee will complete and
authenticate the Global Security
representing such Note.
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
B-7
42
Participant Terminal System
instructing DTC to (i) 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 MTN Certificate Agreement.
G. Unless the relevant Agent is
the end purchaser of such Note,
such Agent will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit such
Note to such Agent's participant
account and credit such Note to
the participant accounts of the
Participants with respect to such
Note and (ii) to debit the
settlement accounts of such
Participants and credit the
settlement account of such Agent
for 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.
B-8
43
I. The Trustee will credit to the
account of the Company maintained
at Bank of America, Concord,
California, or to such other
account as the Company shall have
specified to the Trustee, in
immediately available funds the
amount transferred to the Trustee
in accordance with Settlement
Procedure "F".
J. Unless the relevant Agent is
the end purchaser of such Note,
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 that have
not yet been settled.
Settlement For sales by the Company of Book-
Procedures Entry Notes to or through an Agent
Timetable: (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 in
New York City set forth below:
Settlement
Procedure Time
---------- ----
B-9
44
A 11:00 A.M. on sale date
B 12:00 Noon on sale date
C 2:00 P.M. on 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., 12:00 Noon and 2:00 P.M.,
respectively, on the first Business
Day after the sale date. If the
Initial Interest Rate for a Floating
Rate Book-Entry Note has not been
determined at the time that
Settlement Procedure "A" is
completed, Settlement Procedures "B"
and "C" shall be completed as soon as
such rate has been determined but no
later than 12:00 Noon and 2:00 P.M.,
respectively, on the first 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 relevant 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 If the Trustee fails to enter an
to Settle: SDFS deliver order with respect to a
Book-Entry Note pursuant to
B-10
45
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 the procedures of the
CUSIP Service Bureau of Standard &
Poor's Corporation, 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
B-11
46
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
actions in accordance with its SDFS
operating procedures then in effect.
In the event of a failure to settle
with respect to one or more, but not
all, of the Book-Entry Notes to have
been represented by a Global
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.
B-12
47
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 portion
thereof) issued subsequently upon
transfer or 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.
Preparation If any offer to purchase a Certi-
of Pricing ficated Note is accepted by or on
Supplement: behalf of the Company, the Company
will prepare a Pricing Supplement
reflecting the terms of such Note.
The Company (i) will arrange to file
such Pricing Supplement with the
Commission in accordance with the
applicable paragraph of Rule 424(b)
under the Act and (ii) will, not
later than the Business Day following
the date on which the offer to
purchase the Certificated Note is
accepted, deliver such Pricing
Supplement by facsimile to the
relevant Agent.
In each instance that a Pricing
Supplement is prepared, the relevant
Agent will affix the Pricing
Supplement to Prospectuses prior to
their use. Outdated Pricing
B-13
48
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
exchange 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 offers accepted by
the Company will be settled on the
third Business Day next succeeding
the date of acceptance pursuant to
the timetable for settlement set
forth below, unless the Company and
the purchaser agree to settlement on
another date, which date shall be no
earlier than the next Business Day.
Settlement Settlement Procedures with regard to
Procedures: each Certificated Note sold by the
Company to or through an Agent
(unless otherwise specified pursuant
to a Terms Agreement) shall be as
follows:
A. The relevant Agent will advise the
Company by telephone 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. Principal amount.
B-14
49
5. Maturity Date.
6. In the case of a Fixed Rate
Certificated Note, the Interest
Rate, the Interest Payment Dates
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),
Maximum Interest Rate (if any) and
the Alternate Rate Event Spread
(if any).
7. Redemption or repayment
provisions (if any).
8. Settlement date and time
(Original Issue Date).
9. Interest Accrual Date.
10. Purchase Price.
11. Agent's commission (if any)
determined as provided in the
Distribution Agreement.
12. Denominations.
13. Any original issue discount
information for tax purposes.
14. Trade Date.
15. Depositary Participant Account
Number of such Agent.
B-15
50
16. [Whether or not such Agent is
purchasing such Note as principal,
and, if such Note is sold through
such Agent, that neither such
Agent nor its affiliate is the
purchaser of such Note.]
17. Any other applicable terms.
B. The Company will advise the
Trustee by telephone or electronic
transmission (confirmed in writing at
any time on the same date) of the
information set forth in Settlement
Procedure "A" above.
C. The Company will have delivered to
the Trustee a pre-printed four-ply
packet for such Note, which packet
will contain the following documents
in forms that have been approved by
the 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 at Bank of America,
B-16
51
Concord, California, or to such other
account as the Company shall have
specified to such Agent and the
Trustee, in immediately available
funds, 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 is the
end purchaser of such Note, 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.
Monthly, 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 that have not yet been
settled.
Settlement For sales by the Company of Certifi-
Procedures cated Notes to or through an Agent
Timetable: (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 in New York City
set forth below:
B-17
52
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 price of such Note less such
Agent's commission in respect of such
Note (if any). 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 Distribution
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. Immediately upon receipt of
the Certificated Note in respect of
which such failure occurred, the
B-18
53
Trustee will mark such Note
"cancelled," make appropriate entries
in the Trustee's records and send
such Note to the Company.
B-19