UNUM CORPORATION
$[ ]
Medium-Term Notes, Series C
DISTRIBUTION AGREEMENT
July __, 1996
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
[
]
Dear Sirs:
UNUM Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell from time to time its Medium-Term Notes, Series C (the
"Securities") at an aggregate initial public offering price of up to
$250,000,000 and agrees with each of you (individually, an "Agent", and
collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints each Agent as an agent of the Company
for the purpose of soliciting and receiving offers to purchase Securities from
the Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement") which may be either (i) a written agreement,
substantially in the form of Annex I hereto, or (ii) an oral agreement between
such Agent and the Company confirmed in writing by such Agent to the Company,
relating to such sale in accordance with Section 2(b) hereof.
The Securities will be issued under the Indenture, dated as of
September 15, 1990 (the "Indenture"), between the Company and The Chase
Manhattan Bank (National Association), as Trustee (the "Trustee"). The
Securities
shall have the maturity ranges, interest rates, if any, redemption provisions
and other terms set forth in the Prospectus referred to below as it may be
amended or supplemented from time to time. The Securities will be issued, and
the terms and rights of holders thereof established, from time to time by the
Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each
Agent that:
(a) Two registration statements (File Nos. 33-69132 and 333- _____),
including a prospectus for use in connection with the Securities pursuant to
Rule 429 under the Securities Act of 1933, as amended (the "Act"), in respect of
$500,000,000 aggregate amount of securities of the Company, including the
Securities, have been filed with the Securities and Exchange Commission (the
"Commission"); such registration statements and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered to such Agent,
excluding exhibits to such registration statements, but including all documents
incorporated by reference therein have been declared effective by the Commission
in such form; no other document with respect to such registration statements
(other than a document incorporated by reference therein) has heretofore been
filed or transmitted for filing with the Commission; such prospectus included
for use in connection with the Securities pursuant to Rule 429 under the Act and
the rules and regulations thereunder for use of such prospectus in connection
with the Securities; and no stop order suspending the effectiveness of either of
such registration statements has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission (any preliminary prospectus
included in either of such registration statements or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Act, being hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statements, including all exhibits thereto and the documents
incorporated by reference in the prospectuses contained in such registration
statements at the time such part of such registration statements became
effective but excluding Form T-1, each such part as amended at the time such
part became effective, being hereinafter collectively called the "Registration
Statement"; the prospectus (including the prospectus supplement) relating to the
Securities, in the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this Agreement being
hereinafter called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the
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Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus,
including any supplement to the Prospectus that sets forth only the terms of the
particular issue of the Securities (a "Pricing Supplement"), shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; any reference to
any amendment to the Registration Statement shall be deemed to include any
report of the Company filed pursuant to the Exchange Act after the effective
date of the Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as amended
or supplemented (including by the applicable Pricing Supplement filed in
accordance with Section 4(a) hereof) in relation to Securities sold pursuant to
this Agreement, in the form in which it is filed with the Commission pursuant to
Rule 424(b) under the Act and in accordance with Section 4(a) hereof, including
any documents incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as
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amended or supplemented to relate to a particular issuance of Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date in the case of the Registration Statement
and any amendment thereto and as of the applicable filing date in the case of
the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular issuance of
Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given or incorporated
by reference in the Registration Statement and the Prospectus, there has not
been any material change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries considered as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases
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properties, or conducts any business, so as to require such qualification,
except for any jurisdiction where failure to so qualify will not have a material
adverse effect on the Company; and each subsidiary of the Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable;
(g) The Securities have been duly authorized, and, when Securities
are issued and delivered pursuant to this Agreement and any Terms Agreement,
such Securities will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture, which will be
substantially in the form incorporated by reference in the Prospectus; the
Indenture has been duly authorized, executed and delivered and duly qualified
under the Trust Indenture Act and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; and the Indenture conforms, and the Securities of any particular
issuance of Securities will conform, to the descriptions thereof in the
Prospectus as amended or supplemented to relate to such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not (i) conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject, except, in all
such cases, for such conflicts, breaches, violations or defaults as would not
have a material adverse effect on the financial condition of the Company and its
subsidiaries taken as a whole, and (ii) result in any violation of the
provisions of the Certificate of Incorporation or the By-Laws of the Company or
any statute or any order, rule or regulation of any such court or governmental
agency or body having jurisdiction over the
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Company or any of its properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the solicitation of offers to purchase
Securities, the issue and sale of the Securities or the consummation by the
Company of the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such as have been, or will have been prior to
the Commencement Date (as defined in Section 3 hereof), obtained under the Act
or the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities,
insurance or Blue Sky laws in connection with the solicitation by such Agent of
offers to purchase Securities from the Company and with purchases of Securities
by such Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(i) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(j) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate amount of Securities which shall
have been issued and sold by the Company hereunder or under any Terms Agreement
and of any debt securities of the Company (other than such Securities) that
shall have been issued and sold pursuant to the Registration Statement will not
exceed the amount of debt securities registered under the Registration
Statement;
(k) Coopers & Lybrand L.L.P., who have audited certain financial
statements of the Company and its subsidiaries, are independent certified public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(l) (i) The Company and (ii) its subsidiaries which are engaged in
the insurance business are, in all material respects, in compliance with, and
conduct, in all material respects, their respective businesses in conformity
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with, all applicable insurance laws and regulations; and no order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus has been
issued or threatened by the Superintendent of the Maine Bureau of Insurance.
2. (a) On the basis of the representations and warranties, and
subject to the terms and conditions herein set forth, each of the Agents hereby
severally and not jointly agrees, as agent of the Company, to use its reasonable
efforts to solicit and receive offers to purchase the Securities from the
Company upon the terms and conditions set forth in the Prospectus as amended or
supplemented from time to time. So long as the provisions of this Agreement
relating to the solicitation of offers to purchase Securities from the Company
shall not have been terminated pursuant to Section 10 with respect to any Agent,
the Company shall not, without the consent of such Agent, solicit or accept
offers to purchase, or sell, any debt securities with a maturity at the time of
original issuance of nine months to 30 years except pursuant to this Agreement
or any Terms Agreement or except pursuant to a private placement not
constituting a public offering under the Act or except in connection with a firm
commitment underwriting pursuant to an underwriting agreement that does not
provide for a continuous offering of medium-term debt securities. However, (i)
the Company reserves the right to sell, and may solicit and accept offers to
purchase, Securities directly on its own behalf, and, in the case of any such
sale not resulting from a solicitation made by any Agent, no commission will be
payable with respect to such sale; and (ii) the Company shall have the right at
any time to request the Agents to execute, prior to the date 15 business days
after such request, an amendment to this Agreement to provide for another person
as an Agent hereunder on substantially the same terms as the Agents hereunder on
the date of such request, and each Agent shall have the right either to execute
such amendment or to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company pursuant to
Section 10 with respect to such Agent. These provisions shall not limit
Section 4(f) hereof or any similar provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agents and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions
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contemplated hereunder other than those made pursuant to a Terms Agreement.
Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them in the
Administrative Procedure. The Company will furnish to the Trustee a copy of the
Administrative Procedure as from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agents will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities Sold)
------------------- -------------------
From 9 months to less than 1 year. . . . . . . . . . . . . . . . .125%
From 1 year to less than 18 months . . . . . . . . . . . . . . . .150%
From 18 months to less than 2 years. . . . . . . . . . . . . . . .200%
From 2 years to less than 3 years. . . . . . . . . . . . . . . . .250%
From 3 years to less than 4 years. . . . . . . . . . . . . . . . .350%
From 4 years to less than 5 years. . . . . . . . . . . . . . . . .450%
From 5 years to less than 6 years. . . . . . . . . . . . . . . . .500%
From 6 years to less than 7 years. . . . . . . . . . . . . . . . .550%
From 7 years to less than 10 years . . . . . . . . . . . . . . . .600%
From 10 years to less than 15 years. . . . . . . . . . . . . . . .625%
From 15 years to less than 20 years. . . . . . . . . . . . . . . .675%
20 years and more. . . . . . . . . . . . . . . . . . . . . . . . .750%
(b) Each sale of Securities to any Agent as principal shall be made
in accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement which will provide for the sale
of such Securities to, and the purchase thereof by, such Agent. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Securities by
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such Agent. The commitment of any Agent to purchase Securities as principal,
whether pursuant to any Terms Agreement or otherwise, shall be deemed to have
been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount of Securities to
be purchased by any Agent pursuant thereto, the price to be paid to the Company
for such Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the Securities
and the time and date and place of delivery of and payment for such Securities.
Such Terms Agreement shall also specify any requirements for opinions of
counsel, accountants' letters and officers' certificates pursuant to Section 4
hereof.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to an Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a commission (or grant an equivalent discount) as provided in
Section 2(a) hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedure, is referred to herein as a "Time
of Delivery".
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency, except as permitted
by applicable law.
3. The documents required to be delivered pursuant to Section 6
hereof on the Commencement Date (as defined below) shall be delivered to the
Agents at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New
York, at 11:00 a.m., New York City time, on the date of this Agreement, which
date and time of such delivery may be postponed by agreement between the Agents
and the Company but in no event shall be later than the day prior to the date on
which solicitation of offers to purchase Securities
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is commenced or on which any Terms Agreement is executed (such time and date
being referred to herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall be
disapproved by any Agent promptly after reasonable notice thereof or (B) except
in the case of any document incorporated by reference in the Prospectus
subsequent to the date of any Terms Agreement or other agreement by an Agent to
purchase Securities as principal and required to be filed under the Exchange
Act, after the date of such Terms Agreement or such other agreement and prior to
the related Time of Delivery which shall be disapproved by any Agent party to
such Terms Agreement or so purchasing as principal promptly after reasonable
notice thereof; (ii) to prepare, with respect to any Securities to be sold
through or to such Agent pursuant to this Agreement, a Pricing Supplement with
respect to such Securities in a form previously approved by such Agent and to
file such Pricing Supplement pursuant to Rule 424(b) under the Act not later
than the close of business of the Commission on the fifth business day (or such
other day as Rule 424 shall require) after the date on which such Pricing
Supplement is first used; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing Supplement or a
supplement relating solely to an offering of debt securities other than the
Securities or any document filed under the Act or Exchange Act which is
incorporated by reference into the Prospectus, at any time prior to having
afforded each Agent a reasonable opportunity to review and comment on it;
(iv) to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Securities, and during such same period to advise such Agent, promptly after
the Company receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or has become effective or any supplement
to the Prospectus or any amended Prospectus, other than a supplement relating
solely to an offering of debt securities other than the Securities and other
than any Pricing Supplement that relates to Securities not purchased through or
by such Agents, has been filed with, or mailed for filing to, the Commission, of
the issuance by the Commission of any stop order or of any order preventing or
suspending the use
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of any prospectus relating to the Securities, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amendment or supplement of the Registration
Statement or Prospectus or for additional information; and (v) in the event of
the issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale under the
securities laws of such United States jurisdictions as such Agent may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein for as long as may be necessary to complete the distribution or
sale of the Securities; PROVIDED, HOWEVER, that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time amended
or supplemented, other than any Pricing Supplement (except as provided in the
Administrative Procedure) or a prospectus supplement relating solely to an
offering of debt securities other than the Securities, in the form in which it
is filed with the Commission pursuant to Rule 424 under the Act, and with copies
of the documents incorporated by reference therein, all in such quantities as
such Agent may reasonably request from time to time; and, if the delivery of a
prospectus is required at any time in connection with the offering or sale of
the Securities (including Securities purchased from the Company by such Agent as
principal) and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify such Agent and request such
Agent, in its capacity as agent of the Company, to suspend solicitation of
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offers to purchase Securities from the Company (and, if so notified, such Agent
shall cease such solicitations as soon as practicable, but in any event not
later than one business day later); and if the Company shall decide to amend or
supplement the Registration Statement or the Prospectus as then amended or
supplemented, to so advise such Agent promptly by telephone (with confirmation
in writing) and to prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or the Prospectus as then
amended or supplemented that will correct such statement or omission or effect
such compliance; PROVIDED, HOWEVER, that if during such same period such Agent
continues to own Securities purchased from the Company by such Agent as
principal or such Agent is otherwise required to deliver a prospectus in respect
of transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after (i) the
effective date of the Registration Statement (as defined in Rule 158(c)),
(ii) the effective date of each post-effective amendment to the Registration
Statement, and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K that is incorporated by reference in the
Registration Statement, an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to each
Agent copies of all reports or other communications (financial or other)
furnished to stockholders, and deliver to such Agent (i) as soon as they are
available, copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as such Agent may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal, if required
by such Terms Agreement
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or other agreement, and continuing to and including the earlier of (i) the
termination of the trading restrictions for the Securities purchased thereunder,
as notified to the Company by such Agent and (ii) the related Time of Delivery,
the Company will not, without the prior written consent of such Agent, offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company which both mature more than 9 months after such Time of Delivery and are
substantially similar to the Securities, other than debt securities which the
Company has previously contracted to sell and with respect to which the Company
has advised such Agent in or in connection with such Terms Agreement or other
agreement or of which such Agent has actual knowledge thereof;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal not
pursuant to a Terms Agreement), and each execution and delivery by the Company
of a Terms Agreement with such Agent, shall be deemed to be an affirmation to
such Agent that the representations and warranties of the Company contained in
or made pursuant to this Agreement are true and correct as of the date of such
acceptance or of such Terms Agreement, as the case may be, as though made at and
as of such date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Securities relating
to such acceptance or as of the Time of Delivery relating to such sale, as the
case may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Securities);
(h) That on April 15 (or if such day is not a business day, the next
succeeding business day) of every year this Agreement is in effect, beginning on
April 15, 1997, or as otherwise reasonably requested by the Agents, and each
time the Company sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of an opinion or
opinions by Sullivan & Cromwell, counsel to the Agents, as a condition to the
purchase of Securities pursuant to such Terms Agreement, the Company shall
furnish to such counsel such papers and information as they may reasonably
request to enable them to furnish to such Agent the opinion or opinions referred
to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement or a supplement
relating solely to
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an offering of debt securities other than the Securities), each time a document
filed under the Act or the Exchange Act is incorporated by reference into the
Prospectus (other than a current report on Form 8-K unless reasonably requested
by the Agents) and each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of an opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or cause
to be furnished forthwith to such Agent written opinions of Kevin J. Tierney,
Senior Vice President, Secretary and General Counsel of the Company, or other
counsel for the Company satisfactory to such Agent, dated the date of such
amendment, supplement or incorporation or the Time of Delivery relating to such
sale, as the case may be, in form satisfactory to such Agent, to the effect that
such Agent may rely on such opinion of such counsel referred to in Section 6(c)
hereof which were last furnished to such Agent to the same extent as though it
were dated the date of such letter authorizing reliance (except that the
statements in such last opinions shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or, in
lieu of such opinions, opinions of the same tenor as the opinions of such
counsel referred to in Section 6(c) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date;
(j) That on April 15 (or if such day is not a business day, the next
succeeding business day) of every year this Agreement is in effect, beginning on
April 15, 1997, or as otherwise reasonably requested by the Agents, and each
time the Company sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of an opinion under
this Section 4(j) as a condition to the purchase of Securities pursuant to such
Terms Agreement, the Company shall furnish or cause to be furnished forthwith to
such Agent written opinions of Skadden, Arps, Slate, Meagher & Flom, special
counsel for the Company, or other counsel for the Company satisfactory to such
Agent, in form satisfactory to such Agent, to the effect that such Agent may
rely on such opinion of such counsel referred to in Section 6(d) hereof which
were last furnished to such Agent to the same extent as though it were dated the
date of such letter authorizing reliance (except that the statements in such
last opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu of such
opinions, opinions of the same tenor as the opinions of such counsel referred to
in Section 6(d) hereof
-14-
but modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than a supplement relating solely to an
offering of debt securities other than the Securities) and each time that a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus (other than a Current Report on Form 8-K unless reasonably
requested by the Agents), in either case to set forth financial information
included in or derived from the Company's consolidated financial statements or
accounting records, and each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of a letter under this Section 4(k) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall cause the
independent certified public accountants who have audited the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement to furnish such Agent a letter, dated
the date of such amendment, supplement or incorporation or the Time of Delivery
relating to such sale, as the case may be, in form satisfactory to such Agent,
of the same tenor as the letter referred to in Section 6(e) hereof but modified
to relate to the Registration Statement and the Prospectus as amended or
supplemented to the date of such letter, with such changes as may be necessary
to reflect changes in the financial statements and other information derived
from the accounting records of the Company, to the extent such financial
statements and other information are available as of a date not more than five
business days prior to the date of such letter; PROVIDED, HOWEVER, that, with
respect to any financial information or other matter, such letter may reconfirm
as true and correct at such date as though made at and as of such date, rather
than repeat, statements with respect to such financial information or other
matter made in the letter referred to in Section 6(e) hereof which was last
furnished to such Agent; and
(l) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement or a prospectus
supplement relating solely to an offering of debt securities other than the
Securities), each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus (other than a Current Report on
Form 8-K unless reasonably requested by the Agents), and each time the Company
sells Securities to such Agent as principal and the applicable Terms Agreement
specifies the delivery of a
-15-
certificate under this Section 4(l) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a certificate, dated the date of such
supplement, amendment, incorporation or the Time of Delivery relating to such
sale, as the case may be, in such form and executed by such officers of the
Company as shall be satisfactory to such Agent, to the effect that the
statements contained in the certificates referred to in Section 6(h) hereof
which were last furnished to such Agent are true and correct at such date as
though made at and as of such date (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate, certificates of the
same tenor as the certificates referred to in said Section 6(h) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date.
5. The Company covenants and agrees with each Agent that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the mailing and
delivering of copies thereof to the Agents; (ii) the reasonable fees and
expenses of counsel for the Agents in connection with the establishment of the
program contemplated hereby, any opinions to be rendered by such counsel
hereunder and the transactions contemplated hereunder; (iii) the cost of
printing, preparing by word processor or reproducing this Agreement, any Terms
Agreement, the Indenture, any Blue Sky and Legal Investment Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iv) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including reasonable fees and disbursements of counsel for
the Agents in connection with such qualification and in connection with the Blue
Sky and legal investment surveys; (v) any fees charged by securities rating
services for rating the Securities; (vi) any filing fees incident to any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (vii) the cost of preparing, and providing
any CUSIP or other identification number for, the Securities; (viii) the fees
and expenses of the Trustee and any agent of the Trustee and any transfer or
-16-
paying agent of the Company and the fees and disbursements of counsel for any
Trustee or such agent in connection with any Indenture and the Securities; (ix)
the fees and expenses of any Depositary (as defined in the Indenture) and any
nominees thereof in connection with the Securities; (x) any reasonable
advertising expenses connected with the solicitation of offers to purchase and
the sale of Securities so long as such advertising expenses have been approved
in advance by the Company (any advertising expense approved by the Company in
advance shall be deemed to be reasonable); and (xi) all other reasonable costs
and expenses incident to the performance of the Company's obligations hereunder
which are not otherwise specifically provided for in this Section. Except as
provided in Sections 7 and 8 hereof, each Agent shall pay all other expenses it
incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities, the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, and the obligation of any purchaser of Securities
as a result of an offer to purchase solicited by any Agent, shall be subject, in
the discretion of such Agent or purchaser, as the case may be, to the condition
that all representations and warranties and other statements of the Company
herein (and, in the case of an obligation of the Agents under a Terms Agreement,
in or incorporated in such Terms Agreement by reference) are true and correct at
and as of the Commencement Date and any applicable date referred to in Section
4(l) hereof, as the case may be, and at and as of such Solicitation Time,
settlement date or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time, settlement date or Time of Delivery, as the
case may be, the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time, settlement date or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing Supplement) with
respect to such Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
4(a) hereof; (ii) no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; (iii) all
requests for additional information on the part of the Commission shall have
been complied with to
-17-
the reasonable satisfaction of such Agent; and (iv) after the date of any Terms
Agreement or other agreement by an Agent to purchase Securities as principal and
prior to the related Time of Delivery no document shall have been incorporated
by reference into the Prospectus which shall be disapproved by such Agent
promptly after reasonable notice thereof;
(b) Sullivan & Cromwell, counsel to the Agents, shall have furnished
to such Agent (i) such opinion or opinions, dated the Commencement Date, with
respect to the incorporation of the Company, the validity of the Indenture, the
Securities, the Registration Statement, the Prospectus as amended or
supplemented and other related matters as such Agent may reasonably request, and
(ii) if and to the extent requested by such Agent, with respect to each
applicable date referred to in Section 4(h) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, an opinion or
opinions, dated such applicable date, to the effect that such Agent may rely on
the opinion or opinions which were last furnished to such Agent pursuant to this
Section 6(b) to the same extent as though it or they were dated the date of such
letter authorizing reliance (except that the statements in such last opinion or
opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in any case, in lieu of
such an opinion or opinions, an opinion or opinions of the same tenor as the
opinion or opinions referred to in clause (i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date; and in each case such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Kevin J. Tierney, Senior Vice President, Secretary and General
Counsel of the Company, or other counsel for the Company satisfactory to such
Agent, shall have furnished to such Agent his written opinions, dated the
Commencement Date and each applicable date referred to in Section 4(i) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the case
may be, in form and substance satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus as amended or supplemented;
-18-
(ii) The Company has an authorized capitalization as set forth in
the Prospectus as amended or supplemented and all of the issued shares
of capital stock of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable;
(iii) The Company is qualified to do business, and is in good
standing, as a foreign corporation under the laws of each jurisdiction
in which the business conducted by it requires such qualification or,
if not so qualified and in good standing in any such jurisdiction,
such failure to be so qualified and in good standing, as of the date
of this opinion, will not result in liabilities material to the
business of the Company;
(iv) Each subsidiary of the Company has been duly organized, and
is subsisting and in good standing as a corporation under the laws of
its jurisdiction of incorporation, and all of the issued shares of
capital stock of each such subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and, to the
best knowledge of such counsel, are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims;
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) This Agreement and any applicable Terms Agreement have been
duly authorized, executed and delivered by the Company;
(vii) The Securities have been duly authorized and, when duly
executed, authenticated, issued and
-19-
delivered by the Company, will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture, except to the extent that the enforcement thereof may be
limited by (1) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally and (2) general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or equity);
and the Indenture conforms and the Securities will conform to the
descriptions thereof in the Prospectus as amended or supplemented;
(viii) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, except
to the extent that the enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or thereafter in effect relating to creditors' rights
generally and (2) general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or equity); and the
Indenture has been duly qualified under the Trust Indenture Act;
(ix) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture,
this Agreement and any applicable Terms Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the
Company is subject, nor will such actions result in any violation of
the provisions of the Certificate of Incorporation or By-Laws of the
Company or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties;
-20-
(x) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the solicitation of offers to purchase Securities, the
issue and sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any applicable
Terms Agreement or the Indenture, except such as have been obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities, insurance or Blue Sky laws in
connection with the solicitation by the Agents of offers to purchase
Securities from the Company and with purchases of Securities by an
Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(xi) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; and
(xii) The Registration Statement and the Prospectus as amended and
supplemented and any further amendments and supplements thereto made
by the Company prior to the date of such opinion (other than the
financial statements and related schedules therein, as to which such
counsel need
-21-
express no opinion) comply as to form in all material respects with
the requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder.
In addition, such counsel shall state that he has no reason to believe
that, as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the date of such opinion (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of its date,
the Prospectus as amended or supplemented or any further amendment or supplement
thereto made by the Company prior to the date of such opinion (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
that, as of the date of such opinion, either the Registration Statement or the
Prospectus as amended or supplemented or any amendment or supplement thereto
made by the Company prior to the date of such opinion (other than the financial
statements and related schedules therein, as to which such counsel need express
no opinion) contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading; and he shall state that he does not know of any amendment to the
Registration Statement required to be filed or any contracts or other documents
of a character required to be filed as an exhibit to the Registration Statement
or required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or incorporated by
reference or described as required;
(d) Skadden, Arps, Slate, Meagher & Flom, special counsel for the
Company, or other counsel satisfactory to such Agent shall have furnished to
such Agent their written opinions, dated the Commencement Date and each
applicable date referred to in Section 4(j) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, in form and substance
satisfactory to such Agent, to the effect that:
-22-
(i) The Indenture has been duly executed authorized and delivered by
the Company and is a valid and binding agreement, enforceable against the
Company in accordance with its terms, except to the extent that enforcement
thereof may be limited by (1) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally, (2) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity), (3) requirements that a claim with respect to any Securities
denominated other than in United States dollars (or a judgment denominated other
than in United States dollars in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law and (4) governmental authority to limit, delay or prohibit the
making of payments in foreign currencies or composite currencies or currency
units; and
(ii) The Securities, when executed and authenticated in accordance
with the terms of the Indenture, and issued, sold and delivered by the Company
pursuant to this Agreement against payment of the consideration set forth in
this Agreement, will be valid and binding obligations of the Company entitled to
the benefits of the Indenture and enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be limited
by (1) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium
or similar laws now or hereafter in effect relating to or affecting creditors'
rights generally, (2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity),
(3) requirements that a claim with respect to any Securities denominated other
than in United States dollars (or a judgment denominated in other than United
States dollars in respect of such claim) be converted into United States dollars
at a rate of exchange prevailing on a date determined pursuant to applicable law
and (4) governmental authority to limit, delay or prohibit the making of
payments in foreign currencies or composite currencies or currency units;
(e) (i) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section 4(k) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the case
may be, the independent certified public accountants who have audited the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have furnished to
such Agent a
-23-
letter, dated the Commencement Date or such applicable date, as the case may be,
in form and substance satisfactory to such Agent, to the effect set forth in
Annex III hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented and (ii) since the
respective dates as of which information is given or incorporated by reference
in the Prospectus as amended or supplemented there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of such Agent so material and adverse as
to make it impracticable or inadvisable to proceed with the solicitation by such
Agent of offers to purchase Securities from the Company or the purchase by such
Agent of Securities from the Company as principal, as the case may be, on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented;
(g) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a general moratorium on commercial banking activities
in New York declared by either Federal or New York State authorities; (iii) the
outbreak or material escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war, if the
effect of any such event specified in this clause (iii) in the judgment of such
Agent makes it impracticable or inadvisable to proceed with the solicitation of
offers to purchase Securities or the purchase of Securities from the Company as
principal, pursuant to the applicable Terms Agreement or otherwise, as the case
may be, on the terms and in the manner contemplated in the Prospectus as amended
or supplemented; (iv) any downgrading in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2)
-24-
under the Act; or (v) any such "nationally recognized statistical rating
organization" shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities; and
(h) The Company shall have furnished or caused to be furnished to
such Agent certificates of officers of the Company dated the Commencement Date
and each applicable date referred to in Section 4(l) hereof that is on or prior
to such Solicitation Time or Time of Delivery, as the case may be, in such form
and executed by such officers of the Company as shall be satisfactory to such
Agent, as to the accuracy of the representations and warranties of the Company
herein at and as of the Commencement Date or such applicable date, as the case
may be, as to the performance by the Company of all of its obligations hereunder
to be performed at or prior to the Commencement Date or such applicable date, as
the case may be, as to the matters set forth in subsections (a) and (f) of this
Section 6, and as to such other matters as such Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several, to which
such Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse such Agent for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement,
the Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by such Agent expressly for use therein; and PROVIDED FURTHER, that the
Company shall not be liable to such Agent under the indemnity
-25-
agreement in this subsection (a) with respect to any Preliminary Prospectus to
the extent that any such loss, claim, damage or liability of such Agent results
from the fact such Agent sold Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
Prospectus (excluding documents incorporated by reference) or of the Prospectus
as then amended or supplemented (excluding documents incorporated by reference)
in any case where such delivery is required by the Act if the Company has
previously furnished copies thereof to such Agent and the loss, claim, damage or
liability of such Agent results from an untrue statement or omission of a
material fact contained in the Preliminary Prospectus which was corrected in the
Prospectus (or the Prospectus as amended or supplemented).
(b) Each Agent will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified
-26-
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and each Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of such Securities (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission
-27-
or alleged omission to state a material fact relates to information supplied by
the Company on the one hand or by any Agent on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each Agent agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by per capita allocation (even if all Agents were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), an Agent shall not be required to contribute
any amount in excess of the amount by which the total public offering price at
which the Securities purchased by or through it were sold exceeds the amount of
any damages which such Agent has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of each of the
Agents under this subsection (d) to contribute are several in proportion to
their respective purchases made by or through it to which such loss, claim,
damage or liability (or action in respect thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Agent within the meaning of the Act; and the obligations of each Agent under
this Section 7 shall be in addition to any liability which such Agent may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise) is acting solely as agent for the Company and not as
principal. Each Agent will make
-28-
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Securities from the Company was solicited by
such Agent and has been accepted by the Company, but such Agent shall not have
any liability to the Company in the event such purchase is not consummated for
any reason. If the Company shall default on its obligation to deliver
Securities to a purchaser whose offer it has accepted, the Company shall
(i) hold each Agent harmless against any loss, claim or damage arising from or
as a result of such default by the Company and (ii) notwithstanding such
default, pay to the Agent that solicited such offer any commission to which it
would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent, or the Company, or
any officer or director or any controlling person of the Company, and shall
survive each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of any such termination or
suspension, no party will have any liability, duty or obligation to any other
party hereto, except that (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5,
Section 7, Section 8 and Section 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co. shall be sufficient in all respects
-29-
when delivered or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Facsimile Transmission No. (212) 902-4103,
Attention: Registration Department; if to Morgan Stanley & Co., Incorporated
shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to 1221 Avenue of the Americas, 4th Floor, New
York, NY 10020, Facsimile Transmission No. (212) 764-7490, Attention: Managing
Director, Debt Syndicate, with a copy to 1251 Avenue of the Americas, New York,
New York, Attention: Manager Credit Department; and if to the Company shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to it at its address set forth in the Prospectus.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Section 7, Section 8 and Section 9 hereof, the officers and
directors of the Company and any person who controls any Agent or the Company,
and their respective personal representatives, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any Agent hereunder shall be deemed a successor or assign by reason of
such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
office of the Commission in Washington, D.C. is open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
15. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
16. This Agreement may be amended or supplemented if, but only if,
such amendment or supplement is in writing and is signed by the Company and each
Agent; PROVIDED that the Company may from time to time, on 15 days prior written
notice to the Agents but without the consent of any Agent, amend this Agreement
to add as a party hereto one or more additional firms registered under the
Exchange Act, whereupon each such firm shall become an Agent hereunder on
-30-
substantially the same terms and conditions as the other Agents that are parties
hereto. Each Agent shall sign any amendment or supplement giving effect to the
addition of any such firm as an Agent under this Agreement or shall terminate
the provisions of this Agreement relating to the solicitation of offers to
purchase Securities from the Company pursuant to Section 10 with respect to such
Agent.
-31-
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
UNUM CORPORATION
By:
----------------------------------------
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
- ---------------------------------
(Goldman, Sachs & Co.)
MORGAN STANLEY & CO. INCORPORATED
By:
----------------------------
Name:
Title:
-32-
ANNEX I
UNUM CORPORATION
Medium-Term Notes, Series C
TERMS AGREEMENT
___________, 199_
[Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004]
[Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020]
Dear Sirs:
UNUM Corporation (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution
Agreement, dated July __, 1996 (the "Distribution Agreement"),
between the Company on the one hand and Goldman, Sachs & Co. and
Morgan Stanley & Co. Incorporated (the "Agents"), on the other,
to issue and sell to [Goldman, Sachs & Co.] [Morgan Stanley & Co.
Incorporated] the securities specified in the Schedule hereto
(the "Purchased Securities"). Each of the provisions of the
Distribution Agreement not specifically related to the
solicitation by the Agents, as agents of the Company, of offers
to purchase Securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Terms Agreement
to the same extent as if such provision had been set forth in
full herein. Nothing contained herein or in the Distribution
Agreement shall make any party hereto an agent of the Company or
make such party subject to the provisions therein relating to the
solicitation of offers to purchase securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each
of the representations and warranties set forth therein shall be
deemed to have been made at and as of the date of this Terms
Agreement, except that each representation and warranty in
Section 1 of the Distribution Agreement which makes reference to
the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation
to the Prospectus (as therein defined), and also a representation
and warranty as of the date of this Terms Agreement in relation
to the Prospectus as amended and supplemented to relate to the
Purchased Securities.
An amendment to the Registration Statement, or a
supplement to the Prospectus, as the case may be, relating to the
Purchased Securities, in the form heretofore delivered to you is
now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein
and in the Distribution Agreement incorporated herein by
reference, the Company agrees to issue and sell to [Goldman,
Sachs & Co.] [Morgan Stanley & Co. Incorporated] and [Goldman,
Sachs & Co.] [Morgan Stanley & Co. Incorporated] agree[s] to
purchase from the Company the Purchased Securities, at the time
and place, in the principal amount and at the purchase price set
forth in the Schedule hereto.
The Company agrees that from the date of this Terms
Agreement by [Goldman, Sachs & Co.] [Morgan Stanley & Co. Incor-
porated] to purchase Securities as principal and continuing to
and including the earlier of (i) the termination of the trading
restrictions for the Securities purchased hereunder, as notified
to the Company by such Agent[s] and (ii) the related Time of
Delivery, the Company will not, without the prior written consent
of such Agent[s], offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company which both mature
more than 9 months after such Time of Delivery and are
substantially similar to the Securities [other than debt
securities which the Company has previously contracted to sell
pursuant to the following contracts: [list contracts]].
Defined terms used herein and not defined herein shall
have the meaning given such terms in the Distribution Agreement.
If the foregoing is in accordance with your under-
standing, please sign and return to us three (3) counterparts
hereof, and upon acceptance hereof by you this letter and such
acceptance hereof, including those provisions of the Distribution
Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
UNUM CORPORATION
By:___________________
Accepted:
[____________________________]
(Goldman, Sachs & Co.)
[MORGAN STANLEY & CO. INCORPORATED
By:___________________________]
-2-
Schedule to Annex I
Title of Purchased Securities:
[[ %] Medium-Term Notes, Series C]
Aggregate Principal Amount:
[$ or units of other Specified Currency]
[Price to Public:]
Purchase Price by [Goldman, Sachs & Co.] [Morgan Stanley & Co.
Incorporated]
% of the principal amount of the Purchased
Securities[, plus accrued interest from to ]
[and accrued amortization, if any, from to ]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to
the order of the Company, in [[New York] Clearing House]
[immediately available] funds]
[By wire transfer to a bank account specified by the Company
in [next day] [immediately available] funds]]
Indenture:
Indenture, dated as of September 15, 1990, between the
Company and The Chase Manhattan Bank (National Association),
as Trustee
Time of Delivery:
Closing Location:
Maturity:
-3-
Interest Rate [and Formula]:
[ %]
Interest Payment Dates:
[months and dates]
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(l) The opinion or opinions of counsel to the Agents
referred to in Section 4(h).]
[(2) The opinions of counsel to the Company referred to
in Sections 4(i) and 4(j).]
[(4) The accountants' letter referred to in
Section 4(k).]
[(5) The officers' certificate referred to in
Section 4(1).]
Other Provisions:
-4-
ANNEX II
UNUM Corporation
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated July __, 1996 (the "Distribution Agreement"),
between UNUM Corporation (the "Company") and Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated (together, the "Agents"), to which this
Administrative Procedure is attached as Annex II. Defined terms used herein and
not defined herein shall have the meanings given such terms in the Distribution
Agreement, the Prospectus as amended or supplemented or the Indenture.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. Part I describes procedures of general
applicability with respect to such Securities. Part II below describes
procedures specifically and exclusively applicable (any procedure in Part I
below to the contrary notwithstanding) to such Securities which are either
Global Certificates or Book-Entry Securities (each as defined below). The terms
and settlement details related to a purchase of Securities by an Agent, as
principal, from the Company will be set forth in a Terms Agreement pursuant to
the Distribution Agreement, unless the Company and such Agent otherwise agree as
provided in Section 2(b) of the Distribution Agreement, in which case the
procedures to be followed in respect of the settlement of such sale will be as
set forth below. An Agent, in relation to a purchase of a Security by a
purchaser solicited by such Agent, is referred to herein as the "Selling Agent"
and, in relation to a purchase of a Security by such Agent as principal other
than pursuant to a Terms Agreement, as the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
the related settlement details.
Unless otherwise specified in the applicable Pricing Supplement, each
Security will be issued only in fully registered form and will be initially
represented by either a permanent global certificate (a "Global Certificate")
delivered to the Trustee, as agent for The Depository Trust Company (the
"Depository") or a certificate (a "Definitive Certificate") delivered to a
person designated by an Agent. Each security which is represented by a Global
Certificate is referred to herein as a "Book-Entry Security" (it being
understood that only such Global Certificate -- and not any such Book-Entry
Security represented thereby -- constitutes a "Security" under the Indenture).
Pursuant to Sections 301 and 1002 of the Indenture, the Company has
appointed The Chase Manhattan Bank (National Association) as Paying Agent (the
"Paying Agent") and as Calculation Agent (the "Calculation Agent") for the
Securities. In addition, the Company has appointed The Chase Manhattan Bank
(National Association) as its agent (the "Issuing Agent") in connection with
certain procedures to be followed with respect to the settlement of sales of
Securities, as set forth herein.
PART I: PROCEDURES OF APPLICABILITY TO BOTH CERTIFICATED
SECURITIES AND BOOK-ENTRY SECURITIES
POSTING RATES BY THE COMPANY:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Securities that may be
sold as a result of the solicitation of offers by an Agent. The Company may
establish a fixed set of interest rates and maturities for an offering period
("posting"). If the Company decides to change already posted rates, it will
promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
ACCEPTANCE OF OFFERS BY THE COMPANY:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Securities, other than
those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it in whole or in part. Each Agent also
may make offers to the Company to purchase Securities as a Purchasing Agent.
The Company will have the sole right to accept offers to purchase Securities and
may reject any such offer in whole or in part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Securities. If the Company accepts an offer to purchase Securities, it
will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
COMMUNICATION OF SALE INFORMATION
TO THE COMPANY BY SELLING AGENT:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in
II-2
writing) or by facsimile transmission or other acceptable written means:
(1) Principal amount of Securities to be purchased;
(2) Identification as a Fixed Rate Security, Floating Rate Security
or Zero Coupon Security;
(3) If a Fixed Rate Security, the interest rate and the initial
interest payment date;
(4) Maturity Date;
(5) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(8) Net proceeds to the Company;
(9) Settlement Date;
(10) If a Security is redeemable by the Company, such of the following
as are applicable:
(i) Redemption Commencement Date,
(ii) Redemption Prices (% of par) and Redemption Periods,
(iii) The Repayment Date and the Repayment Price, and
(iv) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(11) If a Floating Rate Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Interest Rate,
(v) Minimum Interest Rate,
(vi) Initial Interest Rate,
II-3
(vii) Interest Rate Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(12) If the amount of principal payable on a Security will be
determined by reference to an index or formula, a full
description of such index or formula;
(13) If an OID Note, the total amount of OID, the Yield to Maturity
and the initial accrual period of OID;
(14) Name, address and taxpayer identification number of the
registered owner;
(15) Denomination of certificates to be delivered at settlement; and
(16) Book-Entry Security or Certificated Security.
PREPARATION OF PRICING SUPPLEMENT BY THE COMPANY:
If the Company accepts an offer to purchase a Security, it will
prepare a Pricing Supplement. The Company will supply at least ten copies of
such Pricing Supplement to the Selling Agent or Purchasing Agent, as the case
may be, not later than 5:00 p.m., New York City time, on the business day
following the date of acceptance of such offer, or if the Company and the
purchaser agree to settlement on the date of such acceptance, not later than
noon, New York City time, on such date. The Company will arrange to have each
Pricing Supplement filed with the Commission under Rule 424(b) not later than
the close of business of the Commission on the fifth business day (or such other
date Rule 424 shall require) following the date on which such Pricing Supplement
is first used. One copy of such filed document will be sent by telecopy or
overnight express (for delivery not later than 11:00 A.M. on the Business Day
next following the trade date) to the Selling Agent or the Purchasing Agent, as
the case may be, at the following applicable addresses: Goldman, Sachs & Co.,
85 Broad Street, New York, New York 10004, Facsimile Transmission No. (212)
902-4103, Attention: Don Hansen, Registration, 18th Floor; Morgan Stanley & Co.
Incorporated, 1221 Avenue of the Americas, New York, New York, 10020, Facsimile
Transmission: (212) 764-7490, Attention: Managing Director, Debt Syndicate.
II-4
DELIVERY OF CONFIRMATION AND
PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Security prior to or together with the earlier of the delivery
to such purchaser or its agent of (a) the confirmation of sale (including, in
the case of a Book-Entry Security, the confirmation through the Depository's
Institutional Delivery System) or (b) the Security.
DATE OF SETTLEMENT:
All offers solicited by a Selling Agent or made by a Purchasing Agent
and accepted by the Company will be settled on a date (the "Settlement Date")
which is the third business day after the date of acceptance of such offer,
unless the Company and the purchaser agree to settlement (a) on any other
business day after the acceptance of such offer or (b) with respect to an offer
accepted by the Company prior to 10:00 a.m., New York City time, on the date of
such acceptance.
INSTRUCTION FROM THE COMPANY TO
ISSUING AGENT FOR PREPARATION OF SECURITIES:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Issuing Agent by telephone (confirmed in writing) or by
facsimile transmission or other acceptable written means.
The Company will instruct the Issuing Agent by facsimile transmission
or other acceptable written means to authenticate and deliver the Securities no
later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 2:00 p.m., New York City time,
on the second business day prior to the Settlement Date unless, in the case of
Securities evidenced by a Definitive Certificate, the Settlement Date is the
date of acceptance by the Company of the offer to purchase such Securities in
which case such instruction will be given by the Company by 11:00 a.m., New York
City time. The Trustee will authenticate and deliver to the Issuing Agent each
Security in accordance with the Company's instructions.
II-5
PREPARATION AND DELIVERY OF SECURITIES
BY ISSUING AGENT AND RECEIPT OF PAYMENT THEREFOR:
The Issuing Agent will prepare each Security and appropriate receipts
that will serve as the documentary control of the transaction.
In the case of a sale of Securities to a purchaser solicited by an
Agent, the Issuing Agent will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Securities to the Selling Agent for the benefit of
the purchaser of such Securities against delivery by the Selling Agent of a
receipt therefor. On the Settlement Date the Selling Agent will deliver payment
for such Securities in immediately available funds to the Company in an amount
equal to the issue price of the Securities less the Selling Agent's commission;
provided that the Selling Agent reserves the right to withhold payment for which
it has not received funds from the purchaser. The Company shall not use any
proceeds advanced by a Selling Agent to purchase securities or carry any
securities in violation of Regulations G, T, U or X of the Federal Reserve Board
or otherwise in violation of law.
In the case of a sale of Securities to a Purchasing Agent, the Issuing
Agent will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Securities to the Purchasing Agent against delivery by the Purchasing Agent
of a receipt therefor. On the Settlement Date the Purchasing Agent will deliver
payment for such Securities in immediately available funds to the Company in an
amount equal to the issue price of the Securities less the Purchasing Agent's
discount.
FAILURE OF PURCHASER TO PAY SELLING AGENT:
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Security or the Selling Agent fails to make payment
to the Company, the Selling Agent will promptly notify the Trustee and the
Company thereof by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means. The Selling Agent will immediately return
the Security to the Issuing Agent. Immediately upon receipt of such Security by
the Issuing Agent, the Company will return to the Selling Agent an amount equal
to the amount previously paid to the Company in respect of such Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Issuing Agent will cancel the Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Security.
II-6
PART II: PROCEDURES APPLICABLE TO BOOK-ENTRY
SECURITIES AND GLOBAL CERTIFICATES
In connection with the qualification of Book-Entry Securities for
eligibility in the book-entry system maintained by the Depository, the Trustee
and the Paying Agent will perform the custodial, document control and
administrative functions described below, in accordance with their respective
obligations under a Letter of Representations from the Company and the Trustee
to the Depository, dated July __, 1996, and a Medium-Term Note Certificate
Agreement, dated March 10, 1989, between The Chase Manhattan Bank (National
Association) and the Depository (the "Certificate Agreement"), and the
obligations of the Trustee as a participant in the Depository, including the
Depository's Same-Day Funds Settlement System ("SDFS"). It is understood that
the ownership interests of purchasers of Book-Entry Securities will be credited
to the book-entry accounts of one or more participants in the Depository (each a
"Participant") in accordance with the Depository's customary practices and
reflected in the records of such Participants or one or more indirect
Participants in the Depository designated by such purchasers in accordance with
the arrangements between such purchasers and such Participants and indirect
participants. As used in this Part II, the term "Business Day" means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in The City of New York are authorized or obligated by law
or executive order to close.
Issuance: All Fixed Rate Securities which are Book-Entry
Securities and have the same Original Issue Date,
redemption provisions, Interest Payment Dates, interest
rate, interest payment periods and Stated Maturity
(collectively, the "Fixed Rate Terms") will be
represented initially by a single Global Certificate in
fully registered form without coupons; all Floating
Rate Securities which are Book-Entry Securities and
have the same Original Issue Date, redemption
provisions, Interest Payment Dates, interest payment
periods, Interest Rate Basis, Initial Interest Rate,
Index Maturity, Spread or Spread Multiplier, if any,
Minimum Interest Rate, if any, Maximum Interest Rate,
if any, and Stated Maturity (collectively, the
"Floating Rate Terms") will be represented initially by
a single Global Certificate in fully registered form
without coupons; and all Zero Coupon
II-7
Securities which are Book-Entry Securities and have the
same Original Issue Date, redemption provisions, Yield
to Maturity, Specified Currency and Stated Maturity
(collectively, the "Zero Coupon Terms") will be
represented initially by a single Global Certificate in
fully registered form without coupons.
Identification: The Company has arranged with the CUSIP Service Bureau
of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of approximately 900 CUSIP
numbers which have been reserved for future assignment
and relating to Book-Entry Securities, and the Company
has delivered to the Issuing Agent and the Depository
such list of such CUSIP numbers. The Company will
assign CUSIP numbers to Global Certificates
representing Book-Entry Securities as described below
under Settlement Procedure C. The Depository will
notify the CUSIP Service Bureau periodically of the
CUSIP numbers that the Company has assigned to Global
Certificates representing Book-Entry Securities. The
Trustee will notify the Company at any time when fewer
than 100 of the reserved CUSIP numbers remain
unassigned to Global Certificates representing Book-
Entry Securities, and, if it deems necessary, the
Company will reserve additional CUSIP numbers for
assignment to Global Certificates representing
Book-Entry Securities. Upon obtaining such additional
CUSIP numbers, the Company will deliver a list of such
additional numbers to the Issuing Agent and the
Depository. Book-Entry Securities having an aggregate
principal amount in excess of $200,000,000 and
otherwise required to be represented by the same Global
Certificate will instead be represented by two or more
Global Certificates which shall all be assigned the
same CUSIP number.
Registration: Each Global Certificate will be registered in the name
of Cede & Co., as
II-8
nominee for the Depository, on the Security Register
maintained by the Trustee under the Indenture. On the
first Business Day of each month, the Trustee will
deliver to the Company a written statement indicating
the total principal amount of Outstanding Book-Entry
Securities as of the immediately preceding Business
Day.
Transfers: Transfers of interests in a Book-Entry Security will be
effected in accordance with arrangements in effect
between Participants (and in certain cases, one or more
indirect participants in the Depository) and the
beneficial transferors and beneficial transferees of
such Book-Entry Security, and the interests of
Participants therein will be reflected as appropriate
by book entries made by the Depository.
Exchanges: The Issuing Agent may deliver to the Depository and the
CUSIP Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or more Global
Certificates (i) having the same Fixed Rate Terms,
Floating Rate Terms or Zero Coupon Terms, as the case
may be (except that Original Issue Dates need not be
the same), (ii) for which interest (if any) has been
paid to the same date and (iii) which otherwise
constitute Securities of the same series and tenor
under the Indenture; (b) a date, occurring at least 30
days after such written notice is delivered and at
least 30 days before the next Interest Payment Date (if
any) for such Book-Entry Securities, on which such
Global Certificates shall be exchanged for a single
replacement Global Certificate; and (c) a new CUSIP
number, obtained from the Company, to be assigned to
such replacement Global Certificate. Upon receipt of
such a notice, the Depository will send to its
participants (including the Issuing Agent) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified
exchange date, the Issuing
II-9
Agent will deliver to the CUSIP Service Bureau written
notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Certificates to
be exchanged will no longer be valid. On the specified
exchange date, the Issuing Agent will exchange such
Global Certificates for a single Global Certificate
authenticated by the Trustee and bearing the new CUSIP
number, and the CUSIP numbers of the exchanged Global
Certificates will, in accordance with CUSIP Service
Bureau procedures, be retired and not reassigned.
Notwithstanding the foregoing, if the Global
Certificates to be exchanged exceed $200,000,000 in
aggregate principal amount, one replacement Global
Certificate will be authenticated and issued to
represent each $200,000,000 of principal amount of the
exchanged Global Certificates and an additional Global
Certificate will be authenticated and issued to
represent any remaining principal amount of such Global
Certificates (see "Denominations" below).
Denominations: All Book-Entry Securities will be denominated in U.S.
dollars. Book-Entry Securities will be issued in
denominations of $100,000 and any larger denomination
which is an integral multiple of $1,000. Global
Certificates will be denominated in principal amounts
not in excess of $200,000,000. If one or more
Book-Entry Securities having an aggregate principal
amount in excess of $200,000,000 would, but for the
preceding sentence, be represented by a single Global
Certificate, then one Global Certificate will be issued
to represent each $200,000,000 principal amount of such
Book-Entry Security or Book-Entry Securities and an
additional Global Certificate will be issued to
represent any remaining principal amount of such
Book-Entry Security or Book-Entry Securities. In such
a case, each of the Global Certificates representing
such Book-Entry Security or Securities
II-10
shall be assigned the same CUSIP number.
Interest: GENERAL. The Depository will arrange for each pending
deposit message described under Settlement Procedure C
below to be transmitted to Standard & Poor's
Corporation, which will use the message to include
certain information regarding the related Book-Entry
Notes in the appropriate daily bond report published by
Standard & Poor's Corporation.
NOTICE OF INTEREST PAYMENTS AND REGULAR RECORD DATES.
On the first Business Day of January, April, July and
October of each year, the Paying Agent will deliver to
the Company and to the Dividend Department of the
Depository a written list of Regular Record Dates and
Interest Payment Dates that will occur during the
six-month period beginning on such first Business Day
with respect to Global Certificates representing Book-
Entry Securities which are Floating Rate Notes.
Promptly after each Interest Determination Date for
Book-Entry Securities which are Floating Rate Notes,
the Calculation Agent will notify Standard & Poor's
Corporation of the interest rates determined on such
Interest Determination Date.
Payments of Principal
and Interest: PAYMENTS OF INTEREST ONLY. Promptly after each Regular
Record Date, the Paying Agent will deliver to the
Company and the Dividend Department of the Depository a
written notice specifying by CUSIP number the amount of
interest (if any) to be paid on each Global Certificate
representing Book-Entry Securities on the following
Interest Payment Date (other than an Interest Payment
Date coinciding with the Maturity of such Certificate)
and the total of such amounts. The Depository will
confirm the amount payable (if any) on each Global
Certificate representing Book-Entry Securities on such
Interest Payment Date by reference to the daily
II-11
bond reports published by Standard & Poor's
Corporation. On such Interest Payment Date the Company
will pay to the Paying Agent, and the Paying Agent in
turn will pay to the Depository, such total amount of
interest due (other than at Maturity of such
Certificate), at the times and in the manner set forth
below under "Manner of Payment". If an Interest
Payment Date for a Book-Entry Note is not a Business
Day, the payment due on such day shall be made on the
next succeeding Business Day and no interest shall
accrue on such payment for the period from and after
such Interest Payment Date.
PAYMENTS AT MATURITY OR UPON REDEMPTION. On or about
the first Business Day of each month, the Paying Agent
will deliver to the Company and the Depository a
written list of principal, premium, if any, and
interest to be paid on each Global Certificate
representing Book-Entry Securities maturing either at
Stated Maturity or on a Redemption Date or otherwise
("Maturity") in the following month. The Paying Agent,
the Company and the Depository will confirm the amounts
of such principal, premium (if any) and interest
payments with respect to each such Global Certificate
representing Book-Entry Securities on or about the
fifth Business Day preceding the Maturity of such
Global Certificate representing Book-Entry Securities.
At such Maturity, the Company will pay to the Paying
Agent, and the Paying Agent in turn will pay to the
Depository, the principal amount of such Global
Certificate representing Book-Entry Securities,
together with interest and premium, if any, due at such
Maturity, at the times and in the manner set forth
below under "Manner of Payment". Promptly after
payment to the Depository of the principal, interest
and premium, if any, due at the Maturity of all Book-
Entry Securities represented by a particular Global
Certificate, the Paying Agent will deliver to the
Trustee for
II-12
cancellation such Global Certificate.
MANNER OF PAYMENT. The total amount of principal,
premium and interest due on Global Securities
representing Book-Entry Securities on any Interest
Payment Date or at Maturity shall be paid by the
Company to the Paying Agent, in funds immediately
available for use by the Trustee as of 9:30 a.m., New
York City time, on such date. The Company will make
such payment on such Global Certificates representing
Book-Entry Securities by wire transfer to the Paying
Agent or by instructing the Paying Agent to withdraw
funds from an account maintained by the Company at the
Paying Agent. The Company will confirm such
instructions in writing to the Paying Agent. For
principal payments at Maturity, prior to 10:00 a.m.,
New York City time, on such Maturity or as soon as
possible thereafter after receipt of such funds from
the Company, the Paying Agent will pay by separate wire
transfer (using Fedwire message entry instructions in a
form previously specified by the Depository) to an
account at the Federal Reserve Bank of New York
previously specified by the Depository, in funds
available for immediate use by the Depository, each
payment of interest, principal and premium, if any, due
on Global Certificates representing Book-Entry
Certificates on such date; and for interest payments,
the Paying Agent will pay the Depository in same-day
funds on the Interest Payment Date in accordance with
existing arrangements between the Paying Agent and the
Depository. Thereafter on each such date, the
Depository will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names such Book-Entry Securities
are recorded in the book-entry system maintained by the
Depository. Once payment has been made to the
Depository, neither the Company, the Trustee nor the
Paying Agent shall
II-13
have any responsibility or liability for the payment by
the Depository of the principal of, or premium, if any,
or interest on, the Book-Entry Securities to such
Participants.
WITHHOLDING TAXES. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Security will be determined and
withheld by the Participant, indirect participant in
the Depository or other Person responsible for
forwarding payments and materials directly to the
beneficial owner of such Book-Entry Security, or as
applicable law may otherwise require.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Security sold by each Agent, as agent of the Company,
will be as follows:
A. After the acceptance of an offer by the Company
with respect to a Book-Entry Security, the Selling
Agent or Purchasing Agent, as the case may be,
will communicate the following details of the
terms of such offer (the "Book-Entry Sale
Information") to the Company by telephone
confirmed in writing or by facsimile transmission
or other acceptable written means:
(1) Principal amount of the Book-Entry Security
to be purchased;
(2) Identification as a Fixed Rate Security,
Floating Rate Security or Zero Coupon
Security;
(3) If a Fixed Rate Security, the interest rate
and the initial interest payment date;
(4) Maturity Date;
(5) Issue Price;
II-14
(6) Selling Agent's commission or Purchasing
Agent's discount, as the case may be;
(7) Net proceeds to the Company;
(8) Settlement Date;
(9) If a redeemable Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Redemption Prices (% of par) and
Redemption Periods,
(iii) the Repayment Date and the
Repayment Price, and
(iv) Amount (% of par) that the
Redemption Price shall decline (but
not below par) on each anniversary
of the Redemption Commencement
Date;
(10) If a Floating Rate Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Interest Rate,
(v) Minimum Interest Rate,
(vi) Initial Interest Rate,
II-15
(vii) Interest Rate Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(11) If the amount of principal payable on a
Security will be determined by reference to
an index or formula, a full description of
such index or formula;
(12) If an OID Note, the total amount of OID, the
Yield to Maturity and the initial accrual
period of OID;
(13) The taxpayer identification number of the
purchaser; and
(14) Identification numbers of the participant
accounts maintained by the Depository on
behalf of such Agent.
B. Upon receiving the Book-Entry Sale Information
from the Selling Agent or the Purchasing Agent, as
the case may be, the Company will assign a CUSIP
number to the Global Certificate representing the
Book-Entry Security and the Company and will
advise the Issuing Agent by telephone (confirmed
by facsimile or electronic transmission) of the
Book-Entry Sale Information received from the
Selling Agent or the Purchasing Agent, as the case
may be, and the name of such Agent.
II-16
C. The Trustee will enter through the Depository
Terminal System, a pending deposit message (the
form of which has been previously furnished to the
Issuing Agent by the Depository) specifying the
following settlement information, which
information will be communicated to the
Depository, such Agent and Standard & Poor's
Corporation:
1. Book-Entry Sale Information.
2. Identification as a Fixed Rate Security,
Floating Rate Security or Zero Coupon
Security.
3. Initial Interest Payment Date for such
Security, number of days by which such date
succeeds the related record date for
Depository purposes (or, in the case of
Floating Rate Notes which reset daily or
weekly, the date five calendar days preceding
such Initial Interest Payment Date) and, if
then calculable, the amount of interest
payable on such Initial Interest Payment Date
(which amount shall have been confirmed by
the Trustee).
4. CUSIP number of the Global Certificate
representing such Book-Entry Security.
5. Whether such Global Certificate will
represent any other Book-Entry Securities
issued or to be issued (to the extent then
known).
D. The Company will instruct the Issuing Agent by
facsimile transmission or other acceptable written
means to complete and authenticate such Global
Certificate, and to register such Global
Certificate in
II-17
the name of Cede & Co., as nominee of the
Depository.
E. The Issuing Agent will complete and authenticate
the Global Certificate representing such
Book-Entry Security, register such Global
Certificate in the name of Cede & Co., as nominee
of the Depository. The Trustee will take delivery
thereof as agent for the Depository.
F. The Depository will credit such Book-Entry
Security to the participant account of the Issuing
Agent maintained by the Depository.
G. The Issuing Agent will enter an SDFS deliver order
through the Depository's Participant Terminal
System instructing the Depository (i) to debit
such Book-Entry Security to the Issuing Agent's
participant account and credit such Book-Entry
Security to the participant account of the Selling
Agent or the Purchasing Agent, as the case may be,
maintained by the Depository and (ii) to debit the
settlement account of the Selling Agent or the
Purchasing Agent, as the case may be, and credit
the settlement account of the Issuing Agent
maintained by the Depository, in an amount equal
to the price of such Book-Entry Security less such
Agent's commission or discount, as the case may
be. Any entry of such a deliver order shall be
deemed to constitute a confirmation by the Trustee
and the Issuing Agent to the Depository that (i)
the Global Certificate representing such Book-
Entry Security has been issued and authenticated
and (ii) the Issuing Agent is holding such Global
Certificate as agent of the Depository pursuant to
the Certificate Agreement.
II-18
H. The Selling Agent or the Purchasing Agent, as the
case may be, will enter an SDFS deliver
instruction through the Depository's Participant
Terminal System instructing the Depository (i) to
debit such Book-Entry Security to the participant
account of such Agent and credit such Book-Entry
Security to the participant accounts of the
Participants with respect to such Book-Entry
Security maintained by the Depository and (ii) to
debit the settlement accounts of such Participants
and credit the settlement account of such Agent
maintained by the Depository in an amount equal to
the price of such Book-Entry Security.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures G and H
will be settled in accordance with SDFS operating
procedures in effect on the Settlement Date.
J. The Issuing Agent will credit to an account of the
Company maintained at the Issuing Agent funds
available for immediate use in the amount
transferred to the Issuing Agent in accordance
with Settlement Procedure G.
K. The Issuing Agent will send a copy of the Global
Certificate by first-class mail to the Company
together with a statement setting forth the
principal amount of Global Certificates
representing the Book-Entry Securities Outstanding
as of the related Settlement Date after giving
effect to such transaction and all other offers to
purchase Securities of which the Company has
advised the Issuing Agent but which have not yet
been settled.
L. The Selling Agent or the Purchasing
II-19
Agent, as the case may be, will confirm the
purchase of such Book-Entry Security to the
purchaser either by transmitting to the
Participants with respect to such Book-Entry
Security a confirmation order through the
Depository's Participant Terminal System or by
mailing a written confirmation to such purchaser.
M. Notwithstanding the foregoing, the Selling Agent
shall in all cases take the actions described
under the caption "Delivery of Confirmation and
Prospectus to Purchaser by Selling Agent" in Part
I of this Administrative Procedure, at the time or
times specified under such caption for such
actions.
Settlement Procedures
Timetable: For orders of Book-Entry Securities accepted by the
Company, Settlement Procedures "A" through "L" set
forth above shall be completed as soon as possible but
not later than the respective times (New York City
time) set forth below:
SETTLEMENT
PROCEDURE TIME
A 11:00 a.m. on the trade date
B 12:00 Noon on the trade date
C 2:00 p.m. on the trade date
D 3:00 p.m. on the Business Day before
Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement
II-20
Date
G-H 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business Day
after the trade date, Settlement Procedures A, B, and C
may, if necessary, be completed at any time prior to
the specified times on the first Business Day after the
trade date. In connection with a sale which is to be
settled more than one Business Day after the trade
date, if the initial interest rate for a Floating Rate
Note is not known at the time that Settlement Procedure
A is completed, Settlement Procedures B and C shall be
completed as soon as such rates have been determined,
but no later than 11:00 a.m. and 2:00 p.m., New York
City time, respectively, on the second Business Day
before the Settlement Date. Settlement Procedure I is
subject to extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Security is rescheduled
or cancelled, the Company will as soon as practicable
give the Trustee notice to such effect. The Trustee
will deliver to the Depository, through the
Depository's Participant Terminal System, a
cancellation message (the form of which has been
previously furnished to the Trustee by the Depository)
to such effect by no later than 2:00 p.m., New York
City time, on the Business Day immediately preceding
the scheduled Settlement Date (provided the Issuing
Agent received such notice from the Company by noon on
the business day immediately preceding the Settlement
II-21
Date) and in any case as soon as practicable. A copy
of such message will be routed through the facilities
of the Depository to the Selling Agent and Standard &
Poor's Corporation.
Failure to Settle: If the Issuing Agent fails to enter in timely fashion
an SDFS deliver order with respect to any Book-Entry
Security or any portion of a Global Certificate
representing a Book-Entry Security pursuant to
Settlement Procedure G, or if the Selling Agent or the
Purchasing Agent, as the case may be, fails to enter in
timely fashion an SDFS deliver order with respect to
such Book-Entry Security pursuant to Settlement
Procedure H, the Issuing Agent may deliver to the
Depository, through the Depository's Participant
Terminal System, as soon as practicable, a withdrawal
message (the form of which has been previously
furnished to the Issuing Agent by the Depository)
instructing the Depository to debit such Book-Entry
Security to the participant account of the Issuing
Agent maintained at the Depository. A copy of such
message will be routed through the facilities of the
Depository to such Agent. The Depository will process
the withdrawal message, provided that such participant
account contains Book-Entry Securities having the same
Fixed Rate Terms, Floating Rate Terms or Zero Coupon
Terms, as the case may be, having an aggregate
principal amount that is at least equal to the
principal amount to be debited. If withdrawal messages
are processed with respect to all the Book-Entry
Securities represented by a particular Global
Certificate, the Issuing Agent will cancel immediately
such Global Certificate, make appropriate entries in
its records and, unless otherwise instructed by the
Company, destroy the Global Certificate. The CUSIP
number assigned to such Global Certificate shall, in
accordance with CUSIP Service Bureau procedures, be
retired and not reassigned. If withdrawal messages
are processed with
II-22
respect to only a portion of the Book-Entry
Securities represented by a particular Global
Certificate, the Issuing Agent will exchange such
Global Certificate for two Global Certificates
authenticated by the Trustee, one of which
shall represent the Book-Entry Securities for which
withdrawal messages are processed and shall be
cancelled by the Trustee and destroyed immediately
after issuance, and the other of which shall represent
the other Book-Entry Securities previously represented
by the surrendered Global Certificate and shall bear
the CUSIP number of the surrendered Global Certificate.
The Company will reimburse such Agent on an equitable
basis for its loss of the use of funds during any
period when the funds were credited to the account of
the Company in connection with such attempted
settlement.
If the purchase price for any Book-Entry Security is
not timely paid to the Participants with respect to
such Security by the beneficial purchaser thereof or by
a person, including an indirect participant in the
Depository, acting on behalf of such purchaser (other
than the Purchasing Agent, if any), such Participants
and, in turn, the Selling Agent or the Purchasing
Agent, as the case may be, may enter SDFS deliver
orders through the Depository's Participant Terminal
System reversing the orders entered pursuant to
Settlement Procedures G and H, respectively.
Immediately thereafter, the Issuing Agent will deliver
the withdrawal message and take the related actions
described in the preceding paragraph. The Company will
reimburse such Agent on an equitable basis for its loss
of the use of funds during any period when the funds
were credited to the account of the Company in
connection with such attempted settlement.
Notwithstanding the foregoing, upon any failure to
settle with respect to any
II-23
Book-Entry Security or any portion of a Global
Certificate representing a Book-Entry Security, the
Depository 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 any Book-Entry
Security that was to have been represented by a Global
Certificate also representing other Book-Entry
Securities, the Issuing Agent will provide, in
accordance with Settlement Procedures D and E, for the
authentication and issuance of a Global Certificate
representing the remaining principal amount to have
been represented by such Global Certificate and will
make appropriate entries in its records.
Issuing and Paying
Agents Not to Risk
Funds: Nothing herein will be deemed to require the Issuing
Agent or the Paying Agent to risk or expend its own
funds in connection with any payment to the Company,
the Agents, the Depository or any Securityholder, it
being understood by all parties that payments made by
the Issuing Agent or the Paying Agent to any party will
be made only to the extent that funds are provided to
the Issuing Agent or the Paying Agent, as the case may
be, for such purpose.
II-24
ANNEX III
ACCOUNTANT'S LETTER
Pursuant to Section 4(k) and Section 6(e), as the case
may be, of the Distribution Agreement, the accountants shall
furnish letters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the
meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited
(and, if applicable, prospective financial statements and/or
pro forma financial information examined) by them and
included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all
material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable,
and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance
with standards established by the American Institute of
Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma
financial information, prospective financial statements
and/or condensed financial statements derived from audited
financial statements of the Company for the periods
specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the Agents;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and
financial position of the Company for the five most recent
fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees
with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements
for five such fiscal years which were included or
incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not
constituting an audit in accordance with generally accepted
auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to
below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection
of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to
believe that:
(A) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included or
incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of
the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations thereunder or
are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included or
incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not
agree with the corresponding items in the unaudited
consolidated financial statements from which such data
and items were derived, and any such unaudited data and
items were not determined on a basis substantially
consistent with the basis for the corresponding amounts
in the audited consolidated financial statements
included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal
year;
(C) the unaudited financial statements which were
not included in the Prospectus but from which were
derived the unaudited condensed financial statements
referred to in clause (A) above and any unaudited
income statement data and balance sheet items included
in the Prospectus and referred to in Clause (B) above
were not determined on a basis substantially consistent
with the basis for the audited financial statements
included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal
year.
-2-
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by
reference in the Prospectus do not comply as to form in
all material respects with the applicable accounting
requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments
have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of the specified date not more than five
business days prior to the date of such letter, there
have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs
of performance shares and upon conversions of
convertible securities, in each case which were
outstanding on the date of the latest balance sheet
included or incorporated by reference in the
Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or
any decreases in consolidated net assets or other items
specified by the Agents, or any increases in any items
specified by the Agents, in each case as compared with
amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by
reference in the Prospectus to the specified date
referred to in Clause (E) above there were any
decreases in consolidated revenues or any material
decreases in the total or per share amounts or
consolidated net income or other items specified by the
Agents, or any increases in any items specified by the
Agents, in each case as compared with the comparable
period of the preceding year and with any other period
of corresponding length specified by the Agents, except
in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter; and
(v) In addition to the audit referred to in their
report(s) included or incorporated by reference in the
Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with
-3-
respect to certain amounts, percentages and financial
information specified by the Agents, which are derived from
the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement
specified by the Agents or in documents incorporated by
reference in the Prospectus specified by the Agents, and
have compared certain of such amounts, percentages and
financial information with the accounting records of the
Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex III to the Prospectus
shall be deemed to refer to the Prospectus (including the
documents incorporated by reference therein) as defined in the
Distribution Agreement as of the Commencement Date referred to in
Section 6(e) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference
therein) as of the date of the amendment, supplement,
incorporation or the Time of Delivery relating to the Terms
Agreement requiring the delivery of such letter under Section
4(k) thereof.
-4-