EXHIBIT 1.1(a)
EXECUTION COPY
TOYOTA MOTOR CREDIT CORPORATION
Medium-Term Notes Due From 9 Months or More
From Date of Issue
DISTRIBUTION AGREEMENT
October 17, 1991
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower, 23rd Floor
World Financial Center
New York, New York 10281-1323
LEHMAN BROTHERS
Shearson Lehman Brothers Inc.
American Express Tower
World Financial Center
New York, New York 10281-1218
Dear Sirs:
Toyota Motor Credit Corporation, a California corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Lehman Brothers,
Shearson Lehman Brothers Inc. (including its affiliate, Lehman Special
Securities Incorporated) ("Lehman Brothers" and, together with Merrill Lynch,
the "Agents") with respect to the issue and sale by the Company of its
Medium-Term Notes described herein (the "Notes"). The Notes are to be issued
pursuant to an indenture (as the same may be amended or restated from time to
time, the "Indenture") dated as of August 1, 1991, as amended by the First
Supplemental Indenture, dated as of October 1, 1991 between the Company, The
Chase Manhattan Bank, N.A. and Bankers Trust Company. Bankers Trust Company
will act as trustee with respect to the Notes (the "Trustee").
As of the date hereof, the Company has authorized the issuance and sale
of up to $1,000,000,000 (or its equivalent based on the applicable exchange
rate at the time of issuance, in such foreign currencies or units of two or
more currencies as the Company shall designate at the time of issuance)
aggregate initial offering price of Notes by the Company directly or through
the Agents pursuant to the terms of this Agreement. It is understood,
however, that the Company may from time to time,
pursuant to an Officer's Certificate delivered to the Trustee pursuant to
Section 301 of the Indenture (with an original copy thereof delivered to the
Agents), reduce the authorized aggregate initial offering price of the Notes
(but not below the aggregate initial offering price of Notes previously issued
under the Indenture) or authorize the issuance of additional Notes and that
such additional Notes may be distributed directly by the Company or through or
to the Agents pursuant to the terms of this Agreement, all as though the
issuance of such Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers, in which case the Agents will act as agents of the
Company in soliciting Note purchases, and (as may from time to time be agreed
to by the Company and the related Agent or Agents) to one or more Agents as
principal for resale to purchasers.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-42854) for the
registration of debt securities, including the Notes, under the Securities Act
of 1933 (the "1933 Act") and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"). Such registration statement has
been declared effective by the Commission and the Indenture has been qualified
under the Trust Indenture Act of 1939 (the "1939 Act"). Such registration
statement (and any further registration statements which may be filed by the
Company for the purpose of registering additional Notes and in connection with
which this Agreement is included or incorporated by reference as an exhibit)
and the prospectus constituting a part thereof, and any prospectus supplements
relating to the Notes, including all documents incorporated therein by
reference, as from time to time amended or supplemented by the filing of
documents pursuant to the Securities Exchange Act of 1934 (the "1934 Act") or
the 1933 Act or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus", respectively, except that if any revised
prospectus shall be provided to the Agents by the Company for use in
connection with the offering of the Notes which is not required to be filed by
the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Agents for such use.
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SECTION 1. APPOINTMENT AS AGENTS.
(a) APPOINTMENT OF AGENTS. Subject to the terms and conditions
stated herein, the Company hereby appoints the Agents, except as otherwise
provided in this Section 1(a), as the exclusive agents for the purpose of
soliciting purchases of the Notes from the Company by others and agrees that,
except as otherwise contemplated herein, whenever the Company determines to
sell Notes directly to one or more Agents as principal for resale to others,
it will enter into a Terms Agreement (as hereafter defined) relating to each
such sale in accordance with the provisions of Section 3(b) hereof if
requested by such Agent. The Company agrees that, except as otherwise
provided in this Section 1(a), during the period the Agents are acting as the
Company's agents hereunder, the Company will not engage any other party to
assist in the placement of the Notes (other than any person or entity which,
by executing a counterpart of this Agreement, becomes an Agent hereunder).
Notwithstanding the foregoing, the Company reserves the right to (i) appoint
additional agents for the purpose of assisting in the placement of the Notes
during the term of this Agreement under the terms of an agreement
substantially identical to this Agreement (provided that the commission to be
paid to such additional agents in connection with the sale of any Note shall
be the applicable commission determined pursuant to Section 3(a) hereof), and
(ii) sell Notes to one or more underwriters in a discrete underwritten
transaction or transactions so long as such underwriter or underwriters shall
execute an agreement substantially identical to this Agreement relating to
such underwritten transaction or transactions, provided that no such agreement
will appoint any such underwriter an agent under this Agreement except as
relates to the related transaction or transactions. The Company shall give
prompt written notice to the Agents of the occurrence of an event described in
clause (i) or (ii) above. As used herein, the term "Agent", in addition to
Merrill Lynch and Lehman Brothers, refers to each person or entity which, at
any particular time, is an agent or underwriter, as the case may be, for the
Company hereunder as evidenced by its execution of a counterpart of this
Agreement.
(b) REASONABLE EFFORTS SOLICITATIONS; RIGHT TO REJECT OFFERS.
Upon receipt of instructions from the Company, the Agents will use their
reasonable efforts to solicit purchases of such principal amount of Notes as
the Company and the Agents shall agree upon from time to time during the term
of this Agreement, it being understood that the Company shall not approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the initial
offering price of Notes registered pursuant to the Registration Statement.
The Agents will have no
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responsibility for maintaining records with respect to the aggregate initial
offering price of Notes sold, or of otherwise monitoring the availability of
Notes for sale under the Registration Statement. Each Agent will communicate
to the Company, orally or in writing, each offer to purchase Notes, other than
those offers rejected by such Agent. Each Agent shall have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Notes, as
a whole or in part, and any such rejection shall not be deemed a breach of the
Agent's agreement contained herein. The Company may accept or reject any
proposed purchase of the Notes, in whole or in part.
(c) SOLICITATIONS AS AGENTS; PURCHASES AS PRINCIPALS. In soliciting
purchases of the Notes on behalf of the Company, unless otherwise specified
pursuant to the terms hereof, each Agent shall act solely as agent for the
Company and not as principal. Each 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.
No Agent shall have any liability to the Company in the event any such
purchase is not consummated for any reason. No Agent shall have any
obligation to purchase Notes from the Company as principal, but may agree from
time to time to purchase Notes as principal. Any such purchase of Notes by an
Agent as principal shall be made pursuant to a Terms Agreement in accordance
with Section 3(b) hereof if requested by such Agent.
(d) RELIANCE. The Company and the Agents agree that any Notes the
placement of which the Agents arrange shall be placed by the Agents, and any
Notes purchased by the Agents shall be purchased, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether through the Agents as agents or to one or more
Agents as principal), as of the date of each delivery of Notes (whether
through the Agents as agents or to one or more Agents as principal) (the date
of each such delivery to one or more Agents as principal being hereafter
referred to as a "Settlement Date"), and as of any time that the Registration
Statement or the Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for the establishment of or a change
in, the interest rates, maturity or price of Notes or similar changes) or
there is filed with the Commission any document incorporated by reference into
the Prospectus (other than any Current Report on Form 8-K
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relating exclusively to the issuance of debt securities under the Registration
Statement other than the Notes) (each of the times referenced above being
referred to herein as a "Representation Date") as follows:
(i) REGISTRATION STATEMENT AND PROSPECTUS. At the time the
Registration Statement became effective, the Registration Statement
complied, and as of the applicable Representation Date will comply, in all
material respects with the applicable requirements of the 1933 Act and the
1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission promulgated thereunder. The Registration Statement, at the time
it became effective, did not, and at each time thereafter at which any
amendment to the Registration Statement becomes effective or any Annual
Report on Form 10-K is filed by the Company with the Commission and as of
the applicable Representation Date, will not, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, as of the date hereof does not, and as of the applicable
Representation Date will not, contain an untrue statement of a material
fact or omit 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, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Agents expressly for use in the Registration Statement or Prospectus or to
those parts of the Registration Statement which constitute the Statements
of Eligibility and Qualification under the 1939 Act on Form T-1.
(ii) INCORPORATED DOCUMENTS. The documents incorporated by reference
in the Prospectus, at the time they were filed with the Commission,
complied in all material respects with the requirements of the 1934 Act and
the rules and regulations promulgated thereunder (the "1934 Act
Regulations"), and, when read together and with the other information in or
incorporated by reference in the Prospectus, did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
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(iii) ACCOUNTANTS. The accountants who certified the financial
statements included or incorporated by reference in the Prospectus are
independent public accountants within the meaning of the 1933 Act and the
1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements and any
supporting schedules of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and the
consolidated results of their operations for the periods specified; and,
except as stated therein, said financial statements have been prepared in
conformity with generally accepted accounting principles in the United
States applied on a consistent basis; and any supporting schedules included
or incorporated by reference in the Registration Statement present fairly
the information required to be stated therein.
(v) DUE INCORPORATION; AUTHORIZATION AND VALIDITY OF THIS AGREEMENT,
THE INDENTURE AND THE NOTES. The Company (A) has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
the State of California with corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus, (B) has the requisite corporate power and authority to execute
and deliver this Agreement, any Terms Agreement, the Indenture and the
Notes and to perform its obligations hereunder and thereunder, (C) has duly
authorized, executed and delivered this Agreement and any Terms Agreement
and each of this Agreement and such Terms Agreement constitutes the valid
and binding agreement of the Company, and (D) is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which its ownership or lease of substantial properties or
the conduct of its business requires such qualification and in which the
failure to do so would materially adversely affect the business or
financial condition of the Company.
(vi) MATERIAL CHANGES OR MATERIAL TRANSACTIONS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, (B) there have been no transactions entered
into
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by the Company or any of its subsidiaries, other than those in the ordinary
course of business (which includes, but is not limited to, Euromarket
financing and domestic private placement and public financing), which are
material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vii) NO SIGNIFICANT SUBSIDIARIES. No subsidiary of the Company
constitutes a "significant subsidiary" as defined in Rule 405 of Regulation
C under the 1933 Act.
(viii) THE INDENTURE. The Indenture has been duly and validly
authorized, executed and delivered by the Company and assuming it has been
duly and validly authorized, executed and delivered by the Trustee,
constitutes a legally valid and binding obligation of the Company,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equity principles.
(ix) THE NOTES. The Notes have been duly and validly authorized by
the Company for issuance, offer and sale pursuant to this Agreement and,
when completed as contemplated by the Procedures (hereinafter defined),
executed, authenticated and delivered pursuant to the provisions of the
Indenture and this Agreement against payment of the consideration set forth
in the Prospectus or pursuant to any Terms Agreement, will constitute
legally valid and binding obligations of the Company enforceable in
accordance with their terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally or by general equity principles, and will be entitled to the
benefits of the Indenture; and the Notes and the Indenture conform in all
material respects to all statements relating thereto contained in the
Registration Statement.
(x) NO DEFAULTS; COMPLIANCE WITH LAWS; REGULATORY APPROVALS. The
Company is not in violation of its charter or bylaws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company is a party or by which
it may be bound, or to which any of the property or assets of the Company
is subject, which violation or default would materially adversely affect
the business or financial condition of the Company and its subsidiaries
considered as
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one enterprise; and the execution, delivery and performance of this
Agreement, any Terms Agreement and the Indenture and the consummation of
the transactions contemplated herein and therein will not conflict with, or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company pursuant to, any material contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company is a
party or by which it may be bound, or to which any of the property or
assets of the Company is subject, nor will such action result in any
violation of the provisions of the charter or bylaws of the Company or, to
the best knowledge of the Company, any law, administrative regulation or
administrative or court decree, and no consent, approval, authorization,
order or decree of any court or governmental agency or body of the United
States is required for the consummation by the Company of the transactions
contemplated by this Agreement, any Terms Agreement or the Indenture,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or the 1939 Act or the 1939 Act Regulations or as may be
required by state securities or Blue Sky laws.
(xi) LEGAL PROCEEDINGS; CONTRACTS. Except as set forth in the
Registration Statement, there is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened, against the Company or any
of its subsidiaries which is required to be disclosed in the Registration
Statement or which might in the opinion of the Company result in any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or which might materially and
adversely affect the properties or assets thereof or which might materially
and adversely affect the consummation of this Agreement or any Terms
Agreement; all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
its business, are, considered in the aggregate, not material; and there are
no contracts or documents of the Company or any of its subsidiaries which
are required to be filed as exhibits to the Registration Statement by the
1933 Act or by the 1933 Act Regulations which have not been so filed.
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(xii) LICENSES. The Company owns or possesses or has obtained all
material governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to lease or own, as the case may be, and to
operate its properties and to carry on its business as presently conducted
where its ownership or lease of substantial properties or the conduct of
its business requires such ownership or possession or the obtaining of such
governmental licenses, permits, consents, orders, approvals and other
authorizations and where the failure to do so would materially adversely
affect the business or financial condition of the Company and its
subsidiaries considered as one enterprise.
(xiii) RATING OF THE NOTES. The Notes are rated "Aaa" by Moody's
Investors Service, Inc. and "AAA" by Standard & Poor's Corporation.
(b) ADDITIONAL CERTIFICATIONS. Any certificate signed by any
director or officer of the Company and delivered to the Agents or to counsel
to the Agents in connection with an offering of Notes or the sale of Notes to
one or more of the Agents as principal shall be deemed a representation and
warranty by the Company to the Agents as to the matters covered thereby on the
date of such certificate and at each Representation Date subsequent thereto.
SECTION 3. SOLICITATIONS AS AGENTS; PURCHASES AS PRINCIPALS.
(a) SOLICITATIONS AS AGENTS. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions
herein set forth, the Agents agree, when acting as agents of the Company, to
use their reasonable efforts to solicit offers to purchase the Notes upon the
terms and conditions set forth herein and in the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agents, as agents,
commencing at any time for any period of time or permanently. Upon receipt of
instructions from the Company, the Agents will forthwith suspend solicitation
of purchases from the Company until such time as the Company has advised the
Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount or otherwise as agreed to by the Company and the Agents, equal to the
applicable percentage of the principal amount of each Note sold by the Company
as a result of a solicitation made by such Agent as set forth in Schedule A
hereto; provided, however, that the Company shall only be
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obligated to pay one such fee with respect to any particular Note so sold.
The purchase price, interest rate, maturity date and other terms of the
Notes shall be agreed upon by the Company and the Agents and set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance
by the Company of an offer for the purchase of Notes. Except as may be
otherwise provided in such supplement to the Prospectus, the Notes will be
issued in denominations of $1,000 and integral multiples thereof. All Notes
sold through the Agents as agents will be sold at 100% of their principal
amount unless otherwise agreed to by the Company and the Agents.
(b) PURCHASES AS PRINCIPALS. Each sale of Notes to one or more
Agents as principal shall be made in accordance with the terms contained
herein and, if requested by such Agent, pursuant to a separate agreement which
will provide for the sale of such Notes to, and the purchase and reoffering
thereof by, such Agent or Agents. Each such separate agreement (which may be
an oral agreement) between one or more Agents and the Company, is herein
referred to as a "Terms Agreement". Unless the context otherwise requires,
each reference contained herein to "this Agreement" shall be deemed to include
any Terms Agreement between the Company and one or more Agents. Each such
Terms Agreement, whether oral or in writing, shall be with respect to such
information (as applicable) as is specified in Exhibit A hereto. An Agent's
commitment to purchase Notes as principal pursuant to any Terms Agreement or
otherwise shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Notes to be purchased by each Agent
pursuant thereto, the price to be paid to the Company for such Notes (which,
if not so specified in a Terms Agreement, shall be at a discount equivalent to
the applicable commission set forth in Schedule A hereto), the time and place
of delivery of and payment for such Notes, any provisions relating to rights
of, and default by, purchasers acting together with the Agents in the
reoffering of the Notes, and such other provisions (including further terms of
the Notes) as may be mutually agreed upon. The Agents may utilize a selling
or dealer group in connection with the resale of the Notes purchased. Such
Terms Agreement shall also specify whether or not any of the officer's
certificate, opinions of counsel or comfort letter specified in Sections 7(b),
7(c) and 7(d) hereof shall be required to be delivered by the Company on the
related Settlement Date.
(c) ADMINISTRATIVE PROCEDURES. Administrative procedures with
respect to the sale of Notes shall be agreed upon from time
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to time by the Agents and the Company (the "Procedures"). Each Agent and the
Company agree to perform the respective duties and obligations specifically
provided to be performed by them in the Procedures.
(d) DELIVERY OF CLOSING DOCUMENTS. The documents required to be
delivered by Section 5 hereof shall be delivered at the office of O'Melveny &
Myers, 400 South Hope Street, Los Angeles, California 90071 on the date
hereof, or at such other time or place as the Agents and the Company may
agree.
SECTION 4. COVENANTS OF THE COMPANY.
The Company covenants with the Agents as follows:
(a) NOTICE OF CERTAIN EVENTS. The Company will immediately notify
(i) the Agents of the effectiveness of any amendment to the Registration
Statement, (ii) the related Agent or Agents of the transmittal to the
Commission for filing of any supplement to the Prospectus (other than an
amendment or supplement which relates exclusively to an offering of debt
securities under the Registration Statement other than the Notes) or any
document to be filed pursuant to the 1934 Act which will be incorporated by
reference in the Prospectus (other than any Current Report on Form 8-K
relating exclusively to an offering of debt securities under the Registration
Statement other than the Notes), (iii) the Agents of the receipt of any
comments from the Commission with respect to the Registration Statement or the
Prospectus, (iv) the Agents of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
(other than an amendment or supplement which relates exclusively to an
offering of debt securities under the Registration Statement other than the
Notes) or for additional information, and (v) the Agents of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) NOTICE OF CERTAIN PROPOSED FILINGS. Except as otherwise
provided in subsection (l) of this Section, the Company will give the Agents
notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
(other than an amendment or supplement providing solely for the establishment
of or change in, the interest rates, maturity or price of Notes or other
similar changes or an
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amendment or supplement which relates exclusively to an offering of debt
securities under the Registration Statement other than the Notes) whether by
the filing of documents pursuant to the 1934 Act (other than any Current
Report on Form 8-K relating exclusively to the issuance of debt securities
under the Registration Statement other than the Notes), the 1933 Act or
otherwise, and will furnish the Agents with copies of any such amendment or
supplement or other documents proposed to be filed or prepared a reasonable
time in advance of such proposed filing or preparation, as the case may be,
and will not file any such amendment or supplement in a form to which you or
your counsel shall reasonably object.
(c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS. The
Company will deliver to the Agents as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as the Agents may
reasonably request. The Company will furnish to the Agents as many copies of
the Prospectus (as amended or supplemented) (other than an amendment or
supplement which relates exclusively to an offering of debt securities under
the Registration Statement other than the Notes) as the Agents shall
reasonably request so long as the Agent is required to deliver a Prospectus in
connection with sales or solicitations of offers to purchase the Notes.
(d) PREPARATION OF PRICING SUPPLEMENTS. The Company will prepare,
with respect to any Notes to be sold through or to the Agents pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents and will file such Pricing Supplement
pursuant to Rule 424(b)(3) under the 1933 Act not later than the close of
business of the Commission on the fifth business day after the date on which
such Pricing Supplement is first used.
(e) REVISIONS OF PROSPECTUS -- MATERIAL CHANGES. Except as
otherwise provided in subsection (1) of this Section, if at any time during
the term of this Agreement any event shall occur or condition exist as a
result of which it is necessary, in the reasonable opinion of counsel to the
Agents or counsel for the Company, to further amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein not misleading in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of either such counsel, to amend
or supplement the Registration Statement or the Prospectus in order to comply
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with the requirements of the 1933 Act or the 1933 Act Regulations, immediate
notice shall be given, and confirmed in writing, to the Agents to cease the
solicitation of offers to purchase the Notes in the Agents' capacity as agents
and to cease sales of any Notes the Agents may then own as principal pursuant
to a Terms Agreement, and the Company will promptly prepare and file with the
Commission such amendment or supplement, whether by filing documents pursuant
to the 1934 Act, the 1933 Act or otherwise, as may be necessary to correct
such untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements.
(f) PROSPECTUS REVISIONS -- PERIODIC FINANCIAL INFORMATION.
Except as otherwise provided in subsection (1) of this Section, on or prior to
the date on which there shall be released to the general public interim
financial statement information related to the Company with respect to each of
the first three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the
Registration Statement and the Prospectus to be amended or supplemented,
whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or
otherwise, to include or incorporate by reference financial information with
respect thereto and corresponding information for the comparable period of the
preceding fiscal year, as well as such other information and explanations as
shall be necessary for an understanding thereof or as shall be required by the
1933 Act or the 1933 Act Regulations.
(g) PROSPECTUS REVISIONS -- AUDITED FINANCIAL INFORMATION.
Except as otherwise provided in subsection (1) of this Section, on or prior to
the date on which there shall be released to the general public financial
information included in or derived from the audited financial statements of
the Company for the preceding fiscal year, the Company shall cause the
Registration Statement and the Prospectus to be amended, whether by the filing
of documents pursuant to the 1934 Act, the 1933 Act or otherwise, to include
or incorporate by reference such audited financial statements and the report
or reports, and consent or consents to such inclusion or incorporation by
reference, of the independent accountants with respect thereto, as well as
such other information and explanations as shall be necessary for an
understanding of such financial statements or as shall be required by the 1933
Act or the 1933 Act Regulations.
(h) EARNINGS STATEMENTS. The Company, by applying the provisions of
Rule 158 under the 1933 Act, will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby,
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an earnings statement (in form complying with the provisions of Rule 158 under
the 1933 Act) covering each twelve month period beginning, in each case, not
later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in such Rule 158) of the Registration Statement
with respect to each sale of Notes.
(i) BLUE SKY QUALIFICATIONS. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Agents may designate, and will maintain such
qualifications in effect for as long as may be required for the distribution
of the Notes; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. The Company
will file such statements and reports as may be required by the laws of each
jurisdiction in which the Notes have been qualified as above provided. The
Company will promptly advise the Agents of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Notes
for sale in any such state or jurisdiction or the initiating or threatening of
any proceeding for such purpose.
(j) 1934 ACT FILINGS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act. Such documents will comply in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations and to the extent such documents are incorporated by reference in
the Prospectus, when read together with the other information in or
incorporated by reference into the Prospectus, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading.
(k) STAND-OFF AGREEMENT. Between the date of any Terms Agreement
and the Settlement Date with respect to such Terms Agreement, the Company will
not, without the prior written consent of each Agent party to such Terms
Agreement, directly or indirectly, sell, offer to sell, contract to sell or
otherwise dispose of, or announce the offering of, any debt securities
denominated in the same currency as the Notes to be purchased pursuant to such
Terms Agreement, or any security exchangeable into such debt securities (other
than the Notes that are to be sold pursuant to such Terms Agreement and
securities sold in any Euromarket financing and commercial paper in the
ordinary course
14
of business), except as may otherwise be provided in any such Terms Agreement.
(l) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not be
required to comply with the provisions of subsections (a), (b), (c), (e), (f),
(g) or (j) of this Section or the provisions of Section 7 hereof during any
period from the time (i) the Agents shall have received written notification
from the Company to suspend solicitation of purchases of the Notes in their
capacity as agents and (ii) the earlier of the date on which no Agent shall
then hold any Notes as principal purchased pursuant to a Terms Agreement and
the date which is thirty days (nine months with respect to subsections (e) and
(j) of this Section) from the date on which the Agents shall have received
written notice from the Company to suspend solicitation of purchases of the
Notes, to the time the Company shall determine that solicitation of purchases
of the Notes should be resumed or shall subsequently enter into a new Terms
Agreement with the Agents.
(m) USE OF PROCEEDS. The net proceeds from the sale of Notes will
be used by the Company as described in the Prospectus.
SECTION 5. CONDITIONS OF OBLIGATIONS.
The obligations of the Agents to solicit offers to purchase the Notes as
agents of the Company, the obligations of any purchasers of the Notes sold
through the Agents as agents, and any obligation of the Agents to purchase
Notes as principals pursuant to a Terms Agreement or otherwise will be subject
to the accuracy of the representations and warranties on the part of the
Company herein contained and to the accuracy of the statements of the
Company's officers made in any certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company of all its
covenants and agreements herein contained and to the following additional
conditions precedent:
(a) LEGAL OPINIONS. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and in form
and substance satisfactory to the Agents and their counsel:
(1) OPINION OF COMPANY COUNSEL. The opinion of O'Melveny & Myers,
counsel for the Company, to the effect that:
(i) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of California.
15
(ii) The Company has corporate power and corporate authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement.
(iii) This Agreement and any applicable Terms Agreement have
each been duly authorized by all necessary corporate action on the
part of the Company, and have each been duly executed and delivered by
the Company.
(iv) The Indenture has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed
and delivered by the Company and constitutes a legally valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally; and the Indenture has been qualified
under the 1939 Act. Such counsel may state, however, that
enforceability of the Indenture is subject to the effect of general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
(v) The Notes (in the form of specimens certified by the
Company's Secretary and examined by such counsel) are in forms
permitted by the Indenture, have been duly authorized by all necessary
corporate action on the part of the Company for issuance, offer and
sale as contemplated by this Agreement and, when completed as
contemplated by the Procedures, executed and authenticated as
specified in the Indenture and delivered against payment of the
purchase price therefor pursuant to this Agreement as provided in the
Prospectus and any Terms Agreement, will constitute legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally; and the Notes will be entitled to the
benefits of the Indenture. Such counsel may state, however, that
enforceability of the Notes is subject to the effect of general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and
16
fair dealing and the possible unavailability of specific performance
or injunctive relief, regardless of whether considered in a proceeding
in equity or at law.
(vi) The Registration Statement has been declared effective
under the 1933 Act and, to their knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(vii) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements and
other financial and statistical data included or incorporated by
reference therein and the Statements of Eligibility and Qualification
on Form T-1 filed as Exhibits thereto, as to which no opinion need be
rendered) appeared on its face to comply as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the 1939 Act Regulations.
(viii) Each document filed pursuant to the 1934 Act (other than
the financial statements and other financial and statistical data
included therein, as to which no opinion need be rendered) and
incorporated by reference in the Prospectus when filed, appeared on
its face to comply as to form in all material respects with the 1934
Act and the 1934 Act Regulations thereunder.
(ix) The information in the Prospectus under the caption
"Description of Notes", "Description of Debt Securities", and
information, if any, in the Prospectus under the caption "United
States Taxation" (or similar caption), to the extent that it
constitutes matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by them and is
correct in all material respects.
(x) No authorization, approval, consent or order of any court or
governmental authority or agency is required in connection with the
sale of the Notes, except such as may be required under the 1933 Act
or the 1933 Act Regulations or the 1939 Act or the 1939 Act
Regulations or state securities laws.
17
(2) The opinion of William A. Plourde, Jr., Esq., General Counsel--
Business Law of the Company, to the effect that:
(i) To such counsel's knowledge, the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each jurisdiction in which its ownership or lease of substantial
properties or the conduct of its business requires such qualification
and in which the failure to so qualify and be in good standing would
materially adversely affect its business or financial condition.
(ii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened which are required to
be disclosed in the Registration Statement, other than those disclosed
therein, and all pending legal or governmental proceedings to which
the Company is a party or to which any of its property is subject
which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material.
(iii) To such counsel's knowledge, no default exists in the due
performance or observance by the Company of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument described or referred
to in the Registration Statement or filed as an exhibit thereto or
incorporated by reference therein, which default would have a material
adverse effect on the financial condition, earnings, business affairs,
business prospects, properties or results of operations of the Company
and its subsidiaries considered as one enterprise.
(iv) The execution and delivery of this Agreement, any Terms
Agreement, the Indenture, the Notes and the consummation of the
transactions contemplated herein and therein will not (A) conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant
to, any material contract, indenture, mortgage, loan agreement, note,
lease or other instrument known to such counsel to which the Company
or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any
18
of the property or assets of the Company or any of its subsidiaries is
subject, (B) result in any violation of the provisions of the charter
or bylaws of the Company, or (C) to such counsel's knowledge, result
in any violation of any applicable law, administrative regulation or
administrative or court decree.
(v) The shares of issued and outstanding Common Stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable.
(vi) To such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the
Registration Statement or to be filed or incorporated by reference as
exhibits thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto, and the
descriptions thereof are correct in all material respects.
(3) OPINION OF COUNSEL TO THE AGENTS. The opinion of Brown & Wood,
counsel to the Agents, covering the matters referred to in subparagraph (1)
under the subheadings (i) and (iii) through (vii), inclusive, above.
(4) In giving their opinions required by subsection (a)(1) and
(a)(3) of this Section, O'Melveny & Myers and Brown & Wood shall each
additionally state that they do not believe that the Registration
Statement, at the time it became effective, and if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been filed by
the Company with the Commission subsequent to the effectiveness of the
Registration Statement and prior to the date of such statement, then at the
time such amendment became effective or at the time of the most recent such
filing (to the extent deemed to be incorporated by reference in the
Registration Statement and Prospectus), and at the date hereof, or (if such
opinion is being delivered in connection with a Terms Agreement pursuant to
Section 7(c) hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto, as the case may be, contains or
contained an untrue statement of a material fact or omits or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements therein not misleading or that the Prospectus, as
amended or supplemented at the date hereof, or (if such opinion is being
delivered in connection with a Terms Agreement pursuant to Section 7(c)
hereof) at the date of any Terms Agreement and at the Settlement Date with
respect
19
thereto, as the case may be, contains or contained an untrue statement of a
material fact or omits or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel may state that
they express no view as to the financial statements and other financial and
statistical data included or incorporated by reference in such Registration
Statement or Prospectus.
(b) OFFICERS' CERTIFICATE. At the date hereof the Agents shall have
received a certificate of the President or Vice President and the chief
financial or chief accounting officer of the Company, dated as of the date
hereof, to the effect that (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus or since
the date of any Terms Agreement, there has not been any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries, considered
as one enterprise, whether or not arising in the ordinary course of business,
(ii) the other representations and warranties of the Company contained in
Section 2 hereof are true and correct with the same force and effect as though
expressly made at and as of the date of such certificate, (iii) the Company
has performed or complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the date of such
certificate, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to their knowledge, no proceedings
for that purpose have been initiated or threatened by the Commission.
(c) COMFORT LETTER. On the date hereof, the Agents shall have
received a letter from Price Waterhouse, dated as of the date hereof and in
form and substance previously agreed to by the Company and the Agents.
(d) OTHER DOCUMENTS. On the date hereof and on each Settlement Date
with respect to any Terms Agreement, counsel to the Agents shall have been
furnished with such documents and opinions as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related proceedings, or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale
of Notes as herein contemplated shall be satisfactory in form and substance to
the Agents and to counsel to the Agents.
20
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement (or, at the
option of the Agents, any Terms Agreement) may be terminated by the Agents by
notice to the Company at any time and any such termination shall be without
liability of any party to any other party, except that the covenant regarding
provision of an earnings statement set forth in Section 4(h) hereof, the
provisions concerning payment of expenses under Section 10 hereof, the
indemnity and contribution agreements set forth in Sections 8 and 9 hereof,
the provisions concerning the representations, warranties and agreements to
survive delivery set forth in Section 11 hereof and the provisions set forth
under "Parties" of Section 15 hereof shall remain in effect.
SECTION 6. DELIVERY OF AND PAYMENT FOR NOTES SOLD THROUGH THE AGENTS.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, the Agent shall promptly notify the Company and deliver
the Note to the Company, and, if the Agent has theretofore paid the Company
for such Note, the Company will promptly return such funds to the Agent. If
such failure occurred for any reason other than default by the Agent in the
performance of its obligations hereunder, the Company will reimburse such
Agent on an equitable basis for its reasonable loss of the use of the funds
for the period such funds were credited to the Company's account.
SECTION 7. ADDITIONAL COVENANTS OF THE COMPANY.
The Company covenants and agrees with the Agents that:
(a) REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
acceptance by it of an offer for the purchase of Notes, and each delivery of
Notes to one or more Agents pursuant to a Terms Agreement, shall be deemed to
be an affirmation that the representations and warranties of the Company
contained in this Agreement and in any certificate theretofore delivered to
the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of
delivery to the purchaser or its agent, or to the Agent or Agents, of the Note
or Notes relating to such acceptance or sale, as the case may be, as though
made at and as of each such time (and it is understood that such
representations and
21
warranties shall relate to the Registration Statement and Prospectus as
amended and supplemented to each such time).
(b) SUBSEQUENT DELIVERY OF CERTIFICATES. Subject to the provisions
of Section 4(l) hereof, each time that the Registration Statement or the
Prospectus shall be amended or supplemented (other than by an amendment or
supplement providing solely for the establishment of or a change in the
interest rates, maturity or price of Notes or similar changes, and other than
by an amendment or supplement which relates exclusively to an offering of debt
securities under the Registration Statement other than the Notes) or there is
filed with the Commission any document incorporated by reference into the
Prospectus (other than any Current Report on Form 8-K relating exclusively to
the issuance of debt securities under the Registration Statement other than
the Notes) or (if required pursuant to the terms of a Terms Agreement) the
Company sells Notes to one or more Agents pursuant to a Terms Agreement, the
Company shall furnish or cause to be furnished to the Agents forthwith a
certificate dated the date of filing with the Commission of such supplement or
document, the date of effectiveness of such amendment, or the date of such
sale, as the case may be, in form reasonably satisfactory to the Agents to the
effect that the statements contained in the certificate referred to in Section
5(b) hereof which were last furnished to the Agents are true and correct at
the time of such amendment, supplement, filing or sale, as the case may be, as
though made at and as of such time (except that such statements shall be
deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to such time) or, in lieu of such certificate, a certificate
of the same tenor as the certificate referred to in said Section 5(b),
modified as necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such
certificate.
(c) SUBSEQUENT DELIVERY OF LEGAL OPINIONS. Subject to the
provisions of Section 4(l) hereof, each time that the Registration Statement
or the Prospectus shall be amended or supplemented (other than by an amendment
or supplement providing solely for the establishment of or a change in the
interest rates, maturity or price of the Notes or similar changes or solely
for the inclusion of additional financial information, and other than by an
amendment or supplement which relates exclusively to an offering of debt
securities under the Registration Statement other than the Notes) or there is
filed with the Commission any document incorporated by reference into the
Prospectus (other than any Current Report on Form 8-K or Quarterly Report on
Form 10-Q, unless the Agents shall reasonably request based on disclosure
included or omitted from such Report) or (if required pursuant to the terms of
a Terms Agreement) the
22
Company sells Notes to one or more Agents pursuant to a Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to the Agents and to
counsel to the Agents a written opinion of each of O'Melveny & Myers and
William A. Plourde, Jr., Esq. General Counsel -- Business Law to the Company,
or other counsel satisfactory to the Agents dated the date of filing with the
Commission of such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form reasonably
satisfactory to the Agents, of substantially the same tenor as the opinions
referred to in Sections 5(a)(1) and (a)(2) hereof, but modified, as necessary,
to relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinions; or, in lieu of such
opinions, counsel last furnishing such opinion to the Agents shall furnish the
Agents with a letter substantially to the effect that the Agents may rely on
such last opinion to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in such last opinion shall
be deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter authorizing
reliance).
(d) SUBSEQUENT DELIVERY OF COMFORT LETTERS. Subject to the
provisions of Section 4(l) hereof, each time that the Registration Statement
or the Prospectus shall be amended or supplemented to include additional
financial information or there is filed with the Commission any document
incorporated by reference into the Prospectus which contains additional
financial information or (if required pursuant to the terms of a Terms
Agreement) the Company sells Notes to one or more Agents pursuant to a Terms
Agreement, the Company shall cause Price Waterhouse, or other independent
certified public accountants reasonably satisfactory to the Agents, forthwith
to furnish the Agents with a letter, dated the date of filing with the
Commission of such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form reasonably
satisfactory to the Agents, of substantially the same tenor as the letter
referred to in Section 5(c) hereof but modified to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date of such
letter, and with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Company; provided, however, that if the Registration Statement or the
Prospectus is amended or supplemented solely to include financial information
as of and for a fiscal quarter, Price Waterhouse, or other independent
certified public accountants reasonably satisfactory to the Agents, may limit
the scope of such letter to the unaudited financial statements included in
such amendment or supplement unless any other information included therein of
an accounting,
23
financial or statistical nature is of such a nature that, in the reasonable
judgment of the Agents, such letter should cover such other information.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE AGENTS. The Company agrees to indemnify
severally and hold harmless each Agent and each person, if any, who controls
each Agent within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all reasonable expense whatsoever, as
incurred (including the reasonable fees and disbursements of counsel
chosen by an Agent), reasonably incurred in investigating, preparing
or defending against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity
24
with written information furnished to the Company by the Agents expressly for
use in the Registration Statement (or any amendment thereto), and provided
further, however, that the indemnity agreement contained in this subsection
8(a) shall not inure to the benefit of any Agent with respect to any loss,
liability, claim, damage or expense arising from the sale of Notes by such
Agent to any person if all of the following occur: (x) such Agent has failed
to send or give a copy of the Prospectus (excluding documents incorporated by
reference), as it may then have been amended or supplemented, to that person
at or prior to the time of written confirmation of such sale; (y) the untrue
statement or alleged untrue statement of a material fact in or omission or
alleged omission of a material fact from a previous form of the Prospectus was
corrected in the Prospectus, as then amended or supplemented; and (z) such
Agent shall have been notified as to such amendment or supplement as set forth
herein and the Company shall have delivered copies of the Prospectus, as so
amended or supplement, to such Agent.
(b) INDEMNIFICATION OF COMPANY. Each Agent severally agrees to
indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such Agent
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto).
(c) GENERAL. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party of such commencement shall not relieve such indemnifying party from any
liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may assume the defense of the indemnified
party by retaining 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
25
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. In no event shall
the indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
(d) FOREIGN CURRENCY JUDGMENTS. The Company agrees to indemnify the
Agents against any loss incurred by the Agents as a result of any judgment or
order being given or made for the amount due under this Agreement and such
judgment or order being paid in a currency (a "Judgment Currency") other than
U.S. dollars as a result of any variation between (i) the rate of exchange at
which U.S. dollars are converted into the Judgment Currency for the purpose of
such judgment or order and (ii) the rate of exchange at which the applicable
Agent is able to purchase U.S. dollars with the amount of the Judgment
Currency actually received by such Agent. The foregoing indemnity shall
constitute a separate and independent obligation of the Company and shall
continue in full force and effect notwithstanding any such judgment or order
as aforesaid. The term "rate of exchange" shall include any premiums and
costs of exchange payable in connection with the purchase of, or conversion
into, the relevant currency.
SECTION 9. CONTRIBUTION.
In order to provide for just and equitable contribution in circumstances
in which the indemnity agreement provided for in Section 8 hereof is for any
reason held to be unavailable to or insufficient to hold harmless the
indemnified parties although applicable in accordance with its terms, the
Company and the Agents shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and the Agents, as incurred, in such
proportions that each Agent is responsible for that portion represented by the
percentage that the total commissions and underwriting discounts received by
such Agent pursuant to this Agreement to the date of such liability bears to
the total sales price from the sale of Notes sold to or through such Agent to
the date of such liability, and the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
26
misrepresentation. For purposes of this Section, each person, if any, who
controls an Agent within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as an Agent, and each director of the Company,
each officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as the Company.
SECTION 10. PAYMENT OF EXPENSES.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statement and all
amendments thereto and the Prospectus and any amendments or supplements
thereto;
(b) The preparation, filing and reproduction of this Agreement;
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the use of book-entry notes;
(d) The reasonable fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel and of any
Calculation Agent;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred from time to time in connection with the transactions contemplated
hereby;
(f) The qualification of the Notes under state securities laws in
accordance with the provisions of Section 4(i) hereof, including filing
fees, and the reasonable fees and disbursements of counsel to the Agents in
connection therewith and in connection with the preparation of any Blue Sky
Survey and any Legal Investment Survey;
(g) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or supplements
thereto;
(h) The preparation, printing, reproducing and delivery to the Agents
of copies of the Indenture and all supplements and amendments thereto;
27
(i) Any fees charged by rating agencies for the rating of the Notes;
(j) The fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.;
(k) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of such expense by the Company;
(l) The cost of preparing, and providing any CUSIP or other
identification numbers for, the Notes; and
(m) The fees and expenses of any Depository (as defined in the
Indenture) and any nominees thereof in connection with the Notes.
SECTION 11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of the Agents, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 12. TERMINATION.
(a) TERMINATION OF THIS AGREEMENT. This Agreement (excluding any
Terms Agreement) may be terminated for any reason, at any time by either the
Company or the Agents on the giving of 30 days' written notice of such
termination to the other party hereto; provided, however, that the termination
of this Agreement by an Agent shall terminate this Agreement only between such
Agent and the Company and the Company's notice of termination as to any one
Agent shall terminate this Agreement only between itself and such Agent.
(b) TERMINATION OF A TERMS AGREEMENT. The Agent or Agents party to
a Terms Agreement may terminate any Terms Agreement, immediately upon notice
to the Company, at any time prior to the Settlement Date relating thereto (i)
if there has been, since the date of such Terms Agreement or since the
respective dates as of which information is given in the Registration
Statement, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise,
28
whether or not arising in the ordinary course of business, or (ii) if there
shall have occurred any outbreak or escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the reasonable judgment of the Agent or
Agents party to such Terms Agreement (after consultation with the Company),
impracticable to market the Notes subject to such Terms Agreement or enforce
contracts for the sale of such Notes, or (iii) if trading in any securities of
the Company has been suspended by the Commission or a national securities
exchange, or if trading generally on either the American Stock Exchange or the
New York Stock Exchange shall have been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium
shall have been declared by federal, California or New York authorities or if
a banking moratorium shall have been declared by the relevant authorities in
the country or countries of origin of any foreign currency or currencies in
which the Notes subject to such Terms Agreement are denominated or payable, or
(iv) if the rating assigned by any nationally recognized securities rating
agency to any debt securities of the Company as of the date of any Terms
Agreement shall have been lowered since that date or if any such rating agency
shall have publicly announced since that date that it has placed any debt
securities of the Company on what is commonly termed a "watch list" for
possible downgrading, or (v) if there shall have come to the Agent's or
Agents' attention any facts that would cause such Agent or Agents to believe
that the Prospectus, at the time it was required to be delivered to a
purchaser of Notes subject to such Terms Agreement, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time of such delivery, not misleading.
(c) GENERAL. In the event of any such termination, no party will
have any liability to any other party hereto, except that (i) each Agent shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination (a) the Agents shall
own any Notes purchased pursuant to a Terms Agreement with the intention of
reselling them or (b) an offer to purchase any of the Notes has been accepted
by the Company but the time of delivery to the purchaser or its agent of the
Note or Notes relating thereto has not occurred, the obligations set forth in
Section 5 hereof and the covenants set forth in Sections 4 and 7 hereof shall
remain in effect until such Notes are so resold or delivered, as the case may
be (provided, however, that, except as provided in clause (iii) below, the
Company's obligations pursuant to
29
Sections 4 and 7 hereof shall in any event terminate no later than the date
that is thirty days (nine months with respect to subsections (e) and (j) of
Section 4 hereof) after the time of such termination), and (iii) the covenant
set forth in Section 4(h) hereof, the indemnity and contribution agreements
set forth in Sections 8 and 9 hereof, and the provisions of Sections 10, 11
and 15 hereof shall remain in effect.
SECTION 13. NOTICES.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail
or by telex, by telecopier or by telegram, and any such notice shall be
effective when received at the address specified below.
If to the Company:
Toyota Motor Credit Corporation
19001 S. Western Avenue A105
Torrance, California 90509
Attention: Assistant Treasurer
Telecopy: (213) 618-7804
If to Merrill Lynch:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower, 23rd Floor
World Financial Center
New York, New York 10281-1323
Attention: MTN Products Management
J. Patrick Hannon
Telecopy: (212) 449-2234
If to Lehman Brothers:
Shearson Lehman Brothers Inc.
American Express Tower
World Financial Center
9th Floor
New York, New York 10281-1218
Attention: Medium-Term Note Product
Management
Telecopy: (212) 619-7165
30
or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 13.
SECTION 14. GOVERNING LAW.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State.
SECTION 15. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for the sole and exclusive
benefit of the parties hereto and respective successors and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Notes shall be deemed to be a successor by reason merely of such purchase.
SECTION 16. COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original hereof.
SECTION 17. CAPTIONS.
The captions in this Agreement are for convenience of reference only and
shall not define or limit any of the terms or the provisions hereof.
31
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between the Agents and the Company in accordance with its terms.
Very truly yours,
TOYOTA MOTOR CREDIT CORPORATION
By: /S/ WOLFGANG JAHN
---------------------------
Name: Wolfgang Jahn
Title: Vice President
Accepted:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /S/ C.F. NOVAK
------------------------
Authorized Signatory
SHEARSON LEHMAN BROTHERS INC.
By: /S/ ROBERT R. LIND
--------------------------
Name: Robert R. Lind
Title: Managing Director
32
Exhibit A
The following terms, if applicable, shall be agreed to
by the Agents and the Company pursuant to each Terms Agreement:
Principal Amount: $________
Stated Maturity Date:
Original Issue Date:
Trade Date:
Issue Price: ____%
Agent's Discount or Commission:
Settlement Date and Time:
Additional Terms:
If Fixed Rate Note:
Interest Rate:
Interest Payment Dates:
Day Count Convention:
[ ] 30/360 for the period
from _______ to ________.
[ ] Actual/360 for the period from ________
to ________.
[ ] Actual/Actual for the period from _______
to________.
If Floating Rate Note:
Interest Calculation:
[ ] Regular Floating Rate Note
[ ] Floating Rate/Fixed Rate Note
Fixed Rate Commencement Date:
Fixed Interest Rate:
[ ] Inverse Floating Rate Note
Fixed Interest Rate:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread and/or Spread Multiplier, if any:
Interest Reset Dates:
Interest Payment Dates:
Regular Record Dates:
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Period:
Interest Payment Period:
Calculation Agent:
A-1
Day Count Convention:
[ ] Actual/360 for the period from _______
to _______.
[ ] Actual/Actual for the period from _____
____ to _________.
[ ] Other:
If Redeemable:
Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage
Reduction:
If Repayable:
Optional Repayment Dates:
Repayment Price:
Currency:
Specified Currency (if other than U.S.
dollars)
Minimum Denominations:
Also, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement.
Legal Opinion pursuant to Section 7(c) of the Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution Agreement.
Stand-off Agreement pursuant to Section 4(k) of the Distribution
Agreement.
A-2
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay the related Agent, on a discount basis, a commission for the sale of
each Note by such Agent equal to the principal amount of such Note multiplied
by the appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
- --------------- ----------------
From 9 months to less than 1 year.............. .125%
From 1 year to less than 18 months............. .150%
From 18 months to less than 2 years............ .175%
From 2 years to less than 3 years.............. .200%
From 3 years to less than 4 years.............. .275%
From 4 years to less than 5 years.............. .325%
From 5 years to less than 6 years.............. .375%
From 6 years to less than 7 years.............. .425%
From 7 years to less than 10 years............. .500%
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%
<FN>
* More than 30 years
* To be negotiated at time of sale between the related Agent and the
Company.