EXHIBIT 1.2
THE ST. PAUL COMPANIES, INC.
$275,000,000
Medium-Term Notes, Series C
DISTRIBUTION AGREEMENT
August 7, 1996
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
J.P. Morgan Securities Inc.,
60 Wall Street,
New York, New York 10260.
Ladies and Gentlemen:
The St. Paul Companies, Inc., a Minnesota corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series C
(the "Securities") in an aggregate amount up to $275,000,000 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"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation on the part of
the Company to sell any Securities or an obligation of any of the Agents to
purchase Securities as principal.
The Securities will be issued under an indenture, dated as of
March 31, 1990 (the "Indenture"), between the Company and The Chase Manhattan
Bank, 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 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:
-1-
(a) Two registration statements on Form S-3 (File Nos. 33-50115 and
333-06456) in respect of the Securities, have been filed with the Securities and
Exchange Commission (the "Commission"); such registration statements and any
posteffective 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 in the prospectus included in
the latest registration statement, have been declared effective by the
Commission in such form; no other document with respect to such registration
statements or document incorporated by reference therein has heretofore been
filed or transmitted for filing with the Commission (other than the prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Securities and Exchange Act of 1933, as amended (the "Act"), each in
the form heretofore delivered to the Agents); and no stop order suspending the
effectiveness of any such registration statements has been issued and no
proceeding for that purpose has been initiated or threatened by the Commission
(any preliminary prospectus included in such registration statements or filed
with the Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, are hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statements, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained in the
registration statements at the time such part of the registration statement
became effective but excluding Form T-1, each as amended at the time such part
of the registration statements became effective, is hereinafter collectively
called the "Registration Statement"; the prospectus (including, if applicable,
any 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, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the 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 a
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 therein by reference;
any reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of 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 to be sold pursuant to this
Agreement, in the form filed or transmitted for filing 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);
-2-
(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 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 as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to 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 direct 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, which is material to the Company and it subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital stock
or long-term debt of the Company and its subsidiaries taken as a whole (other
than any change in the capital stock resulting from the exercise of stock
options, the issuance of restricted shares under the Company's Restricted Stock
Plan, Non-Employee Director Stock Retainer Plan, Chairman's Service Award,
Junior Fire Marshall Program and Deferred Stock Awards or the conversion of
-3-
Series B Convertible Preferred Stock and Series C Convertible Preferred Stock)
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Minnesota, 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 properties,
or conducts any business, so as to require such qualification, and is not
subject to any material liability or disability by reason of the failure to be
so qualified in any such jurisdiction; and each of the Company's principal
subsidiaries (hereinafter called "Principal Subsidiaries"), namely St. Paul Fire
and Marine Insurance Company and The John Nuveen Company, has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification;
(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 authorized and validly issued and are fully paid and non-assessable;
all of the issued shares of capital stock of St. Paul Fire and Marine Insurance
Company and approximately 78% of the issued shares of capital stock of The John
Nuveen Company have been duly authorized and validly issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(g) The Securities have been duly authorized by the Company, and,
when issued and delivered pursuant to this Agreement and any Terms Agreement,
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; 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 similar 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 contained 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
-4-
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 to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Restated Articles of Incorporation, as
amended, or the By-laws, as amended, of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
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) Neither the Company nor any of its subsidiaries is in violation
of its organizational documents or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties is or
may be bound;
(j) The statements set forth in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes", insofar as they
purport to constitute a summary of the terms of the Securities therein
described, and, subject to the limitations set forth therein, under the caption
"United States Taxation", and under the captions "Plan of Distribution" and
"Supplemental Plan of Distribution" insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate, complete
and fair;
(k) Other than as set forth in the Prospectus, and other than
litigation (none of which is reasonably likely to be material) incidental to the
kinds of business conducted by the Company and its subsidiaries, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject which, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate (after giving effect to
any applicable insurance, reinsurance or reserves therefor) have a material
adverse effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
-5-
(l) The Company is not and, after giving effect to each offering and
sale of the Securities will not be, an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(m) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes;
(n) 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; and
(o) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. (a) On the basis of the representations and warranties herein
contained, 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 this Agreement shall
remain in effect with respect to any Agent, the Company shall not, without the
consent of such Agent, solicit or accept offers to purchase, or sell, any debt
securities with a maturity at the time of original issuance of nine months to 20
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 to act 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
-6-
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 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. During such period, the
Company shall not be required to comply with the provisions of Sections 4(h),
4(i), 4(j) and 4(k). Upon advising the Agents that such solicitation may be
resumed, however, the Company shall simultaneously provide the documents
required to be delivered by Sections 4(h), 4(i), 4(j) and 4(k), and the Agents
shall have no obligation to solicit offers to purchase the Securities until such
documents have been received by the Agents. In addition, any failure by the
Company to comply with its obligations hereunder, including without limitation
its obligations to deliver the documents required by Sections 4(h), 4(i), 4(j)
and 4(k), shall automatically terminate the Agents' obligations hereunder,
including without limitation its obligations to solicit offers to purchase the
Securities hereunder as agent or to purchase Securities hereunder as principal.
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%
-7-
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 . . . . . . . . . . . . . . . . . . . . .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 may be an oral agreement
followed by a written confirmation by such Agent transmitted by facsimile
transmission or other means mutually satisfactory to the parties thereto, and
which will provide for the sale of such Securities to, and the purchase thereof
by, such Agent. Each Terms Agreement will contain substantially the information
set forth in, and if in writing will be substantially in the form of, Annex I
hereto. A Terms Agreement may also specify certain provisions relating to the
reoffering of such Securities by such Agent. The commitment of any Agent to
purchase Securities as principal, whether pursuant to any Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein 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. Each Agent proposes to offer
Securities purchased by it as principal for sale at prevailing market prices or
prices related thereto at the time of sale, which may be equal to, greater than
or less than the price at which such Securities are purchased by such Agent from
the Company.
For each sale of Securities to an Agent as principal that is not made
pursuant to a written 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 pursuant to a written Terms
Agreement or otherwise, 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 written Terms Agreement
or otherwise,
-8-
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 2:00 p.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 is commenced or on which any
Terms Agreement is entered into (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) 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 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)(3) under the Act not later than the close of business of the
Commission on the fifth business day after the date on which such Pricing
Supplement is first used; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing Supplement, at any
time prior to having afforded each Agent a reasonable opportunity to review and
comment thereon; (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 time 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 any Pricing Supplement
that relates to Securities not purchased through or by such Agent) has been
filed with, or transmitted for filing with, the Commission, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use 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 such prospectus or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal;
-9-
(b) Promptly from time to time to take such action as such Agent may
reasonably 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), 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 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 18 months after the effective date
of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings 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);
-10-
(e) So long as any Securities are outstanding, to furnish to such
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 written Terms Agreement with such
Agent or other agreement by such Agent to purchase Securities as principal and
continuing to and including the later 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;
(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 written Terms Agreement), and each execution and delivery by the
Company of a written 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 reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than by a
Pricing Supplement) and each time a document filed under the Act or the Exchange
Act is incorporated by reference into the Prospectus, and each time the Company
sells Securities to such Agent as principal pursuant to a written 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), each time a
document
-11-
filed under the Act or the Exchange Act is incorporated by reference into the
Prospectus and each time the Company sells Securities to such Agent as principal
pursuant to a written 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 a written opinion of Andrew Ian
Douglass, Esq., Senior Vice President and General Counsel for the Company, or
other counsel for the Company satisfactory to such Agent, dated the date of such
amendment, supplement, incorporation or 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 the opinion of such counsel referred to in Section 6(c) hereof
which was 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 opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date) or, in lieu of such
opinion, an opinion of the same tenor as the opinion 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 each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement) and each time
that a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, 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 written Terms Agreement and such Terms Agreement
specifies the delivery of a letter under this Section 4(j) as a condition to the
purchase of Securities pursuant to such Terms Agreement, the Company shall cause
the independent certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement forthwith to furnish such Agent a
letter, dated the date of such amendment, supplement, incorporation or Time of
Delivery relating to such sale, as the case may be, and furnished no later than
the date (the "Comfort Letter Delivery Date") that is five business days after
the date of such amendment, supplement, incorporation or at such Time of
Delivery, as the case may be, in form satisfactory to such Agent, of the same
tenor as the letter referred to in Section 6(d) 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(d) hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time a
-12-
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus, and each time the Company sells Securities to such Agent as
principal pursuant to a written Terms Agreement and such Terms Agreement
specifies the delivery of a certificate under this Section 4(k) as a condition
to the purchase of Securities pursuant to such Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to such Agent a certificate,
dated the date of such supplement, amendment, incorporation or 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; and
(l) To offer to any person who has agreed to purchase Securities from
the Company as the result of an offer to purchase solicited by such Agent the
right to refuse to purchase and pay for such Securities if, on the related
settlement date, fixed pursuant to the Administrative Procedure, any condition
set forth in Section 6(a), 6(e) or 6(f) hereof shall, not have been satisfied
(it being understood that the judgment of such person with respect to the
impracticability or inadvisability of such purchase of Securities shall be
substituted, for purposes of this Section 4(l), for the respective judgments of
an Agent with respect to certain matters referred to in such Sections 6(e) and
6(f), and that such Agent shall have no duty or obligation whatsoever to
exercise the judgment permitted under such Sections 6(e) and 6(f) on behalf of
any such person).
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 such Agent; (ii) the fees, disbursements 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 under any Terms Agreement and the transactions contemplated
hereunder and under any Terms Agreement; (iii) the cost of printing, producing
or reproducing this Agreement, any written Terms Agreement, the Indenture, any
Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) 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 the fees and
disbursements of counsel for the Agents in connection with such qualification
and in connection with the Blue Sky
-13-
and legal investment surveys; (v) any fees charged by securities rating services
for rating the Securities; (vi) any filing fees incident to, and the fees and
disbursements of counsel for the Agents in connection with, 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 numbers for, the Securities; (viii) the fees and expenses of the
Trustee and any agent of the Trustee and any transfer or 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 Depository (as defined in the Indenture) and any nominees thereof in
connection with the Securities; (x) any 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; and (xi) all
other costs and expenses incident to the performance of its 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 and the
obligation of any Agent to purchase Securities as principal, pursuant to any
written Terms Agreement or otherwise, shall in each case be subject, in such
Agent's discretion, to the condition that all representations and warranties and
other statements of the Company herein (and, in the case of an obligation of an
Agent under a written Terms Agreement, in or incorporated by reference in such
Terms Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time 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 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; and (iii) all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of such Agent;
(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
-14-
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) Andrew Ian Douglass, Esq., Senior Vice President and General
Counsel for the Company, or other counsel for the Company satisfactory to such
Agent, shall have furnished to such Agent his written opinion, 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 State of Minnesota,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized share capital 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 authorized and validly issued
and are fully paid and non-assessable;
(iii) The Company has been duly qualified to do business as a foreign
corporation and is in good standing in each state or jurisdiction in which,
in such counsel's opinion, the Company is required to be so qualified or if
the Company is not so qualified in any such state or jurisdiction, the
failure to so qualify would not, considering all cases in the aggregate,
involve a material risk to the business, properties, financial position or
results of operation of the Company and its subsidiaries, taken as a whole;
(iv) Each of the Principal Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation; all of the issued shares of capital
stock of St. Paul Fire and Marine Insurance Company and approximately 78%
of the issued shares of capital stock of The John Nuveen Company have been
duly authorized and validly issued, are fully paid and non-assessable, and
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances,
-15-
equities or claims (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or the
Principal Subsidiaries, provided that, such counsel shall state that he
believes that both the Agents and he are justified in relying upon such
opinions and certificates);
(v) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of
its subsidiaries is subject, other than as set forth in the Prospectus and
other than litigation or proceedings (none of which is reasonably likely to
be material) incident to the kinds of business conducted by the Company and
its subsidiaries, which, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate (after giving
effect to any applicable insurance, reinsurance or reserves therefor) have
a material adverse effect on the current or future consolidated financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole; 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 delivered by the Company, will
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture; 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 Company and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles; 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, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of the
Company or any of its subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which
-16-
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the Restated Articles
of Incorporation, as amended, or By-laws, as amended, 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 subsidiaries or any of their properties;
(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) Neither the Company nor any of its subsidiaries is in violation
of its organizational documents or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties is or may be bound;
(xii) The statements set forth in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes", insofar as
they purport to constitute a summary of the terms of the Securities therein
described, and, subject to the limitations set forth therein, under the
caption "United States Taxation", and under the captions "Plan of
Distribution" and "Supplemental Plan of Distribution" insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(xiii) The Company is not and, after giving effect to each offering
and sale of the Securities will not be, an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act;
(xiv) 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
-17-
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and such counsel 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
(xv) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by the
Company prior to the date of such opinion for the Securities (other than
the financial statements and related schedules therein, as to which counsel
need 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; such counsel has no reason to believe that, as of
its effective date, the Registration Statement 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 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 light of the
circumstances in 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 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) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading; and such counsel 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;
-18-
PROVIDED that in lieu of the delivery of the opinion set forth in paragraph
(iv) of this Section 6(c) as to The John Nuveen Company, such counsel may
cause James J. Wesolowski, Vice President and General Counsel to The John
Nuveen Company, to deliver an opinion as to such matters, 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; and PROVIDED, FURTHER, that in lieu of the delivery of
the opinion set forth in paragraph (ii) of this Section 6(c) as to the due
authorization, valid issuance, due payment and non-assessability of the
issued shares of capital stock of the Company, such counsel may cause
Oppenheimer Wolff & Donnelly, special Minnesota counsel to the Company, to
deliver an opinion as to such matters, 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.
(d) (i) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each Comfort Letter Delivery Date or Time of Delivery
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, the independent certified public
accountants who have certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement
shall have furnished to such Agent a letter, dated the Commencement Date or the
related applicable date referred to in Section 4(j), as the case may be, and
(ii) if such Solicitation Time is on or after any applicable date referred to in
Section 4(j) but prior to the related Comfort Letter Delivery Date, such
accountants shall have furnished to such Agent a letter, dated such applicable
date, such letters being, in any such case described in clause (i) or (ii), in
form and substance satisfactory to such Agent, to the effect set forth in
Annex III hereto;
(e) (i) Neither the Company nor any of its Principal 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 prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery 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 prior to the date of
the Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented prior to the
date of the Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery there shall not have been any change in the capital
stock or long-term debt of the Company and its subsidiaries taken as a whole
(other than any change in the capital stock resulting from the exercise of stock
options, the issuance of restricted shares under the Company's Restricted Stock
Plan, Non-Employee Director Stock Retainer Plan, Chairman's Service Award,
Junior Fire Marshall Program and Deferred Stock Awards or the conversion of
Series B Convertible Preferred Stock and Series C Convertible Preferred Stock)
or any change, or any development involving a prospective change, in or
affecting the general
-19-
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 prior to the date of
the Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery, 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 prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery;
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or the Company's
financial strength or claims paying ability by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such 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 or the
Company's financial strength or claims paying ability;
(g) On or after the date hereof 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 suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities in New
York declared by either Federal or New York State authorities; or (iv) the
outbreak or 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 clause (iv) 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 the 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; 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(k) 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 (e) of this
Section 6, and as to such other matters as such Agent may reasonably request.
-20-
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.
(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 party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and
-21-
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. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable 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 or alleged omission to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading 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
-22-
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 the
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 written
Terms Agreement or otherwise) is acting solely as agent for the Company and not
as principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold 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
-23-
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 such suspension or termination
with respect to any Agent, (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 when
delivered or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Facsimile Transmission No. (212) 902-3000,
Attention: Registration Department, and if to J.P. Morgan Securities Inc. shall
be sufficient in all respects when delivered or sent by telex, facsimile
transmission or registered mail to 60 Wall Street, New York, New York 10260,
Facsimile Transmission No. (212) 837-5909, Attention: Medium-Term Note Desk,
Third Floor, 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
merely 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
Commission's office 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 laws of the State of New York.
-24-
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.
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,
THE ST. PAUL COMPANIES, INC.
By: /s/ Douglas W. Leatherdale
---------------------------
Name: Douglas W. Leatherdale
Title: Chairman, President and
Chief Executive Officer
Accepted in New York, New York,
as of the date hereof:
/s/ Goldman, Sachs & Co.
- --------------------------------------
(Goldman, Sachs & Co.)
J.P. MORGAN SECURITIES INC.
By: /s/ Geoffrey Fitzgerald
----------------------------------
Name: Geoffrey Fitzgerald
Title: Vice President
-25-
ANNEX I
THE ST. PAUL COMPANIES, INC.
Medium-Term Notes, Series C
Due from 9 Months to 20 Years
from Date of Issue
TERMS AGREEMENT
---------------
__________, 19__
[Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.]
[J.P. Morgan Securities Inc.,
60 Wall Street,
New York, New York 10260.]
Ladies and Gentlemen:
The St. Paul Companies, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated
___________, 1996 (the "Distribution Agreement"), between the Company on the one
hand and Goldman, Sachs & Co. and J.P. Morgan Securities Inc. (the "Agents") on
the other, to issue and sell to [Goldman, Sachs & Co.] [J.P. Morgan Securities
Inc.] 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 provisions 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 a 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.] [J.P. Morgan Securities Inc.] and
[Goldman, Sachs & Co.] [J.P. Morgan Securities Inc.] 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.
If the foregoing is in accordance with your understanding, please sign
and return to us five 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.
THE ST. PAUL COMPANIES, INC.
By:_____________________________
Name:
Title:
Accepted:
[____________________________________]
(Goldman, Sachs & Co.)
[J.P. MORGAN SECURITIES INC.]
By:_________________________________
Name:
Title:
I-2
Schedule to Annex I
Title of Purchased Securities:
[[ %] Medium-Term Notes, Series C]
Aggregate Principal Amount:
[$ ]
[Price to Public:
Purchase Price by [Goldman, Sachs & Co.] [J.P. Morgan Securities Inc.]:
% of the principal amount of the Purchased Securities[, plus accrued
interest, if any, 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 March 31, 1990, between the Company and The Chase
Manhattan Bank, as Trustee
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates] [commencing _______]
I-3
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to in
Section 4(h).]
[(2) The opinion of the General Counsel of the Company referred to in
Section 4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section 4(k).]
Other Provisions:
I-4
ANNEX II
THE ST. PAUL COMPANIES, INC.
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated ......................, 1996 (the "Distribution
Agreement"), between The St. Paul Companies, Inc.(the "Company") and Goldman,
Sachs & Co. and J.P. Morgan Securities Inc. (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. 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.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the Administrative
Procedure set forth in Part I hereof, and Certificated Securities will be issued
in accordance with the Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of March 10, 1989 (the "Certificate Agreement"),
and its obligations as a
II-1
participant in the Depositary, including the Depositary's Same-Day Funds
Settlement System ("SDFS").
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 Book-Entry 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 Book-Entry 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 Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the case
may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry 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 AGENT AND SETTLEMENT
PROCEDURES:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency
II-2
(it being understood that currently the Depositary accepts
deposits of Global Securities denominated in U.S. dollars only);
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(I) REDEMPTION COMMENCEMENT DATE,
(II) INITIAL REDEMPTION PRICE (% OF PAR), AND
(III) AMOUNT (% OF PAR) THAT THE REDEMPTION PRICE SHALL DECLINE
(BUT NOT BELOW PAR) ON EACH ANNIVERSARY OF THE REDEMPTION
COMMENCEMENT DATE;
(12) If a Floating Rate Book-Entry Security, such of the following as
are applicable:
(I) INTEREST RATE BASIS,
(II) INDEX MATURITY,
(III) SPREAD OR SPREAD MULTIPLIER,
(IV) MAXIMUM RATE,
(V) MINIMUM RATE,
(VI) INITIAL INTEREST RATE,
(VII) INTEREST RESET DATES,
(VIII) CALCULATION DATES,
(IX) INTEREST DETERMINATION DATES,
(X) INTEREST PAYMENT DATES,
(XI) REGULAR RECORD DATES, AND
(XII) CALCULATION AGENT;
II-3
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
B. 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 Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously delivered to the Trustee by the Company
representing such Book-Entry Security and then advise the Company and the
Selling Agent or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may
be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for
the Depositary's purposes (which in the case of Floating Rate
Securities which reset weekly shall be the date five calendar
days immediately preceding the applicable Interest Payment Date
and in the case of all other Book-Entry Securities shall be the
Regular Record Date, as defined in the Security) and, if
calculable at that time, the amount of interest payable on such
Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such
Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and
II-4
credit the Trustee's settlement account for an amount equal to the price of such
Book-Entry Security less such Agent's commission. The entry of such a deliver
order shall constitute a representation and warranty by the Trustee to the
Depositary that (a) the Global Security representing such Book-Entry Security
has been issued and authenticated and (b) the Trustee is holding such Global
Security pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at a bank located in New York, New York,
or such other account as the Company may have previously specified to the
Trustee, in funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
K. Such Agent 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 or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
PREPARATION OF PRICING SUPPLEMENT:
If the Company accepts an offer to purchase a Book-Entry Security, it will
prepare a Pricing Supplement reflecting the terms of such Book-Entry Security
and arrange to have delivered to the Selling Agent or Purchasing Agent, as the
case may be, at least ten copies of such Pricing Supplement, not later than 5:00
p.m., New York City time, on the Business Day following the Trade Date (as
defined below), or if the Company and the purchaser agree to settlement on the
Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth Business Day following the date on which
such ricing Supplement is first used.
II-5
DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Book-Entry 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 Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Book-Entry Security.
DATE OF SETTLEMENT:
The receipt by the Company of immediately available funds in payment for a
Book-Entry Security and the authentication and issuance of the Global Security
representing such Book-Entry Security shall constitute "settlement" with respect
to such Book-Entry Security. All orders of Book-Entry Securities solicited by a
Selling Agent or made by a Purchasing Agent and accepted by the Company on a
particular date (the "Trade Date") will be settled on a date (the "Settlement
Date") which is the third Business Day after the Trade Date pursuant to the
"Settlement Procedure Timetable" set forth below, unless the Company and the
purchaser agree to settlement on another Business Day which shall be no earlier
than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" 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 5:00 p.m. on the Business Day following the Trade Date or
10:00 a.m. on the Business Day prior to the
Settlement Date, whichever is earlier
B 12:00 noon on the second Business Day immediately preceding
the Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding
the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
II-6
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled Settlement Date.
FAILURE TO SETTLE:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to the
participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
II-7
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall
have occurred for any reason other than default by the applicable Agent to
perform its obligations hereunder or under the Distribution Agreement, the
Company will reimburse such Agent on an equitable basis for the loss of its use
of funds during the period when the funds were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Security, the Depositary may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Securities to have
been represented by a Global Security, the Trustee will provide, in accordance
with Settlement Procedure "D", for the authentication and issuance of a Global
Security representing the other Book-Entry Securities to have been represented
by such Global Security and will make appropriate entries in its records. The
Company will, from time to time, furnish the Trustee with a sufficient quantity
of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
POSTING RATES BY 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 Certificated 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 COMPANY:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated 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 Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated 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
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
II-8
COMMUNICATION OF SALE INFORMATION TO COMPANY BY 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 writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following as
are applicable:
(I) REDEMPTION COMMENCEMENT DATE,
(II) INITIAL REDEMPTION PRICE (% OF PAR), AND
(III) AMOUNT (% OF PAR) THAT THE REDEMPTION PRICE SHALL DECLINE
(BUT NOT BELOW PAR) ON EACH ANNIVERSARY OF THE REDEMPTION
COMMENCEMENT DATE;
(12) If a Floating Rate Certificated Security, such of the following
as are applicable:
(I) INTEREST RATE BASIS,
(II) INDEX MATURITY,
(III) SPREAD OR SPREAD MULTIPLIER,
II-9
(IV) MAXIMUM RATE,
(V) MINIMUM RATE,
(VI) INITIAL INTEREST RATE,
(VII) INTEREST RESET DATES,
(VIII) CALCULATION DATES,
(IX) INTEREST DETERMINATION DATES,
(X) INTEREST PAYMENT DATES,
(XI) REGULAR RECORD DATES, AND
(XII) CALCULATION AGENT;
(13) Name, address and taxpayer identification number of the
registered owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) Book-Entry Security or Certificated Security; and
(16) Selling Agent or Purchasing Agent.
PREPARATION OF PRICING SUPPLEMENT BY COMPANY:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
DELIVERY OF CONFIRMATION AND PROSPECTUS TO PURCHASER BY SELLING AGENT:
The Selling Agent will deliver to the purchaser of a Certificated 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 Certificated Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Certificated Security.
DATE OF SETTLEMENT:
II-10
All offers of Certificated Securities 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
another 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 COMPANY TO TRUSTEE FOR PREPARATION OF CERTIFICATED 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 Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated 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 3:00 p.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
PREPARATION AND DELIVERY OF CERTIFICATED SECURITIES BY TRUSTEE AND RECEIPT OF
PAYMENT THEREFOR:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated 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 acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent, the
Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Certificated Securities to the Purchasing Agent against delivery of payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
FAILURE OF PURCHASER TO PAY SELLING AGENT:
II-11
If a purchaser (other than a Purchasing Agent) fails to make payment to the
Selling Agent for a Certificated Security, 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 Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated 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 Trustee will cancel the Certificated Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Certificated Security.
II-12
ANNEX III
ACCOUNTANT'S LETTER
Pursuant to Section 4(j) and Section 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public 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 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 they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
interim consolidated condensed balance sheets and statements of income 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) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or included
in the Company's quarterly report on Form 10-Q incorporated by reference into
the Prospectus as indicated in their reports thereon copies of which have been
furnished to the Agents; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (v)(A) below comply as to form in
all material respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations, nothing came
to their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(iv) 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 most recently filed Annual
Report on Form 10-K agrees with the corresponding amounts (after restatement
where applicable) in the audited consolidated financial statements for such five
fiscal years which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading
III-1
of the latest available interim financial statement of the Company and certain
of its subsidiaries, inspection of the minute books of the Company and certain
of 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 who are 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 consolidated condensed balance sheets and related
unaudited consolidated condensed statements of income, common shareholders'
equity and 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,
consolidated statements of common shareholders' equity and consolidated
statements of cash flows included or incorporated by reference in the
Company's most recently filed Annual Report on Form 10-K or the
Registration Statement;
(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) 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;
(D) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock of the Company (other than issuances of capital stock upon exercise
of stock options and upon conversion of Series B Convertible Preferred
Stock, 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 short-term borrowings, or long-term debt
of the Company and its subsidiaries or any other items specified by the
Agents, or any decreases in any items specified by the Agents, in each case
as compared with amounts shown in the latest balance sheet included
III-2
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;
(E) at the date of the latest available incomplete unaudited
consolidated condensed balance sheet of the Company and subsidiaries other
than Minet Holdings PLC, St. Paul (UK) Ltd. and subsidiaries owned or
managed by Minet Holdings PLC or St. Paul (UK) Ltd. (the "Excluded
Subsidiaries") there were any decreases in total invested assets, total
assets or total net assets or other items reasonably specified by the
Agents, or any increases in any items reasonably specified by the Agents,
in each case as compared with the amounts reflected in the incomplete
unaudited consolidated condensed balance sheet at the date of the latest
financial statements included or incorporated by reference in the
Prospectus, 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
(F) for the period from the date of the latest income statement
included or incorporated by reference in the Prospectus to the date of the
latest available incomplete unaudited consolidated condensed income
statement of the Company and subsidiaries other than the Excluded
Subsidiaries there were any decreases in total revenues, operating earnings
from continuing operations, net income or earnings per share or other items
reasonably specified by the Agents, or any increases in any items
reasonably specified by the Agents, in each case as compared with the
incomplete unaudited consolidated condensed income statement of the Company
and subsidiaries other than the Excluded Subsidiaries for the comparable
period of the preceding year and with any other period of corresponding
length reasonably 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
(vi) In addition to the examination 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 (iv) and (v) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with 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
III-3
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(d) 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(j)
thereof.
III-4