Distribution Agreement
UNUM CORPORATION
$250,000,000
Medium-Term Notes, Series C
Distribution Agreement
August 15, 1996
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
UNUM Corporation, a Delaware corporation (the "Company"), proposes to issue
and sell from time to time its Medium-Term Notes, Series C (the "Securities") at
an aggregate initial public offering price of up to $250,000,000 and agrees with
each of you (individually, an "Agent", and collectively, the "Agents") as set
forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement") which may be either (i) a written agreement,
substantially in the form of Annex I hereto, or (ii) an oral agreement between
such Agent and the Company confirmed in writing by such Agent to the Company,
relating to such sale in accordance with Section 2(b) hereof.
The Securities will be issued under the Indenture, dated as of September
15, 1990 (the "Indenture"), between the Company and The Chase Manhattan Bank
(National Association), as Trustee (the "Trustee"). The Securities shall have
the maturity ranges, interest rates, if any, redemption provisions and other
terms set forth in the Prospectus referred to below as it may be amended or
supple-
mented from time to time. The Securities will be issued, and the terms and
rights of holders thereof established, from time to time by the Company in
accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) Two registration statements (File Nos. 33- 69132 and 333-08187),
including a prospectus for use in connection with the Securities pursuant to
Rule 429 under the Securities Act of 1933, as amended (the "Act"), in respect of
$500,000,000 aggregate amount of securities of the Company, including the
Securities, have been filed with the Securities and Exchange Commission (the
"Commission"); such registration statements and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered to such Agent,
excluding exhibits to such registration statements, but including all documents
incorporated by reference therein have been declared effective by the Commission
in such form; no other document with respect to such registration statements
(other than a document incorporated by reference therein) has heretofore been
filed or transmitted for filing with the Commission; such prospectus included
for use in connection with the Securities pursuant to Rule 429 under the Act and
the rules and regulations thereunder for use of such prospectus in connection
with the Securities; and no stop order suspending the effectiveness of either of
such registration statements has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission (any preliminary prospectus
included in either of such registration statements or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Act, being hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statements, including all exhibits thereto and the documents
incorporated by reference in the prospectuses contained in such registration
statements at the time such part of such registration statements became
effective but excluding Form T-1, each such part as amended at the time such
part became effective, being hereinafter collectively called the "Registration
Statement"; the prospectus (including the prospectus supplement) relating to the
Securities, in the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this Agreement being
hereinafter called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the 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 Pre-
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liminary Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus,
including any supplement to the Prospectus that sets forth only the terms of the
particular issue of the Securities (a "Pricing Supplement"), shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; any reference to
any amendment to the Registration Statement shall be deemed to include any
report of the Company filed pursuant to the Exchange Act after the effective
date of the Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as amended
or supplemented (including by the applicable Pricing Supplement filed in
accordance with Section 4(a) hereof) in relation to Securities sold pursuant to
this Agreement, in the form in which it is filed with the Commission pursuant to
Rule 424(b) under the Act and in accordance with Section 4(a) hereof, including
any documents incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular issuance of
Securities;
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(c) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder and do not and will not, as of the
applicable effective date in the case of the Registration Statement and any
amendment thereto and as of the applicable filing date in the case of the
Prospectus and any amendment or supplement thereto, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by any Agent expressly for use in the Prospectus as
amended or supplemented to relate to a particular issuance of Securities;
(d) Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given or incorporated by
reference in the Registration Statement and the Prospectus, there has not been
any material change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries considered as a whole, otherwise than as set
forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, except for any jurisdiction where failure to so qualify will not
have a material adverse effect on the
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Company; and each subsidiary of the Company has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable;
(g) The Securities have been duly authorized, and, when Securities are
issued and delivered pursuant to this Agreement and any Terms Agreement, such
Securities will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture, which will be substantially in the form
incorporated by reference in the Prospectus; the Indenture has been duly
authorized, executed and delivered and duly qualified under the Trust Indenture
Act and constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Securities of any particular issuance of Securities
will conform, to the descriptions thereof in the Prospectus as amended or
supplemented to relate to such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by the Company
with all of the provisions of the Securities, the Indenture, this Agreement and
any Terms Agreement, and the consummation of the transactions herein and therein
contemplated will not (i) conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, except, in all such cases, for
such conflicts, breaches, violations or defaults as would not have a material
adverse effect on the financial condition of the Company and its subsidiaries
taken as a whole, and (ii) result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws of the Company or any statute or any
order, rule or regulation of any such court or governmental agency or body
having jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is
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required for the solicitation of offers to purchase Securities, the issue and
sale of the Securities or the consummation by the Company of the other
transactions contemplated by this Agreement, any Terms Agreement or the
Indenture, except such as have been, or will have been prior to the Commencement
Date (as defined in Section 3 hereof), obtained under the Act or the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities, insurance or Blue Sky
laws in connection with the solicitation by such Agent of offers to purchase
Securities from the Company and with purchases of Securities by such Agent as
principal, as the case may be, in each case in the manner contemplated hereby;
(i) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(j) Immediately after any sale of Securities by the Company hereunder or
under any Terms Agreement, the aggregate amount of Securities which shall have
been issued and sold by the Company hereunder or under any Terms Agreement and
of any debt securities of the Company (other than such Securities) that shall
have been issued and sold pursuant to the Registration Statement will not exceed
the amount of debt securities registered under the Registration Statement;
(k) Coopers & Lybrand L.L.P., who have audited certain financial statements
of the Company and its subsidiaries, are independent certified public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(l) (i) The Company and (ii) its subsidiaries which are engaged in the
insurance business are, in all material respects, in compliance with, and
conduct, in all material respects, their respective businesses in conformity
with, all applicable insurance laws and regulations; and no order preventing or
suspending the use of the Prospectus or
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any Preliminary Prospectus has been issued or threatened by
the Superintendent of the Maine Bureau of Insurance.
2. (a) On the basis of the representations and warranties, and subject to
the terms and conditions herein set forth, each of the Agents hereby severally
and not jointly agrees, as agent of the Company, to use its reasonable efforts
to solicit and receive offers to purchase the Securities from the Company upon
the terms and conditions set forth in the Prospectus as amended or supplemented
from time to time. So long as the provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company shall not have
been terminated pursuant to Section 10 with respect to any Agent, the Company
shall not, without the consent of such Agent, solicit or accept offers to
purchase, or sell, any debt securities with a maturity at the time of original
issuance of nine months to 30 years or more except pursuant to this Agreement or
any Terms Agreement or except pursuant to a private placement not constituting a
public offering under the Act or except in connection with a firm commitment
underwriting pursuant to an underwriting agreement that does not provide for a
continuous offering of medium-term debt securities. However, (i) the Company
reserves the right to sell, and may solicit and accept offers to purchase,
Securities directly on its own behalf, and, in the case of any such sale not
resulting from a solicitation made by any Agent, no commission will be payable
with respect to such sale; and (ii) the Company shall have the right at any time
to request the Agents to execute, prior to the date 15 business days after such
request, an amendment to this Agreement to provide for another person as an
Agent hereunder on substantially the same terms as the Agents hereunder on the
date of such request, and each Agent shall have the right either to execute such
amendment or to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company pursuant to
Section 10 with respect to such Agent. These provisions shall not limit Section
4(f) hereof or any similar provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities, the
solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agents and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each Agent and
the Company agree to
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perform the respective duties and obligations specifically provided to be
performed by each of them in the Administrative Procedure. The Company will
furnish to the Trustee a copy of the Administrative Procedure as from time to
time in effect.
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agents will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities Sold)
------------------- -------------------
From 9 months to less than 1 year ................ .125%
From 1 year to less than 18 months................ .150%
From 18 months to less than 2 years............... .200%
From 2 years to less than 3 years................. .250%
From 3 years to less than 4 years................. .350%
From 4 years to less than 5 years................. .450%
From 5 years to less than 6 years................. .500%
From 6 years to less than 7 years................. .550%
From 7 years to less than 10 years................ .600%
From 10 years to less than 15 years............... .625%
From 15 years to less than 20 years............... .675%
20 years to less than 30 years.................... .750%
30 years and more ........... Determined at time of sale
(b) Each sale of Securities to any Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement which will provide for the sale
of such Securities to, and the purchase thereof by, such Agent. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Securities by such Agent. The commitment of any Agent to purchase Secu-
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rities as principal, whether pursuant to any Terms Agreement or otherwise, shall
be deemed to have been made on the basis of the representations and warranties
of the Company herein contained and shall be subject to the terms and conditions
herein set forth. Each Terms Agreement shall specify the principal amount of
Securities to be purchased by any Agent pursuant thereto, the price to be paid
to the Company for such Securities, any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the reoffering of
the Securities and the time and date and place of delivery of and payment for
such Securities. Such Terms Agreement shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to an Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a commission (or grant an equivalent discount) as provided in
Section 2(a) hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedure, is referred to herein as a "Time
of Delivery".
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency, except as permitted
by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Sullivan & Cromwell, 125 Broad Street, New York, New York, at 11:00
a.m., New York City time, on the date of this Agreement, which date and time of
such delivery may be postponed by agreement between the Agents and the Company
but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which any Terms
Agreement is executed
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(such time and date being referred to herein as the "Com-
mencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration Statement or
the Prospectus (A) prior to the Commencement Date which shall be disapproved by
any Agent promptly after reasonable notice thereof or (B) except in the case of
any document incorporated by reference in the Prospectus subsequent to the date
of any Terms Agreement or other agreement by an Agent to purchase Securities as
principal and required to be filed under the Exchange Act, after the date of
such Terms Agreement or such other agreement and prior to the related Time of
Delivery which shall be disapproved by any Agent party to such Terms Agreement
or so purchasing as principal promptly after reasonable notice thereof; (ii) to
prepare, with respect to any Securities to be sold through or to such Agent
pursuant to this Agreement, a Pricing Supplement with respect to such Securities
in a form previously approved by such Agent and to file such Pricing Supplement
pursuant to Rule 424(b) under the Act not later than the close of business of
the Commission on the fifth business day (or such other day as Rule 424 shall
require) after the date on which such Pricing Supplement is first used; (iii) to
make no amendment or supplement to the Registration Statement or Prospectus,
other than any Pricing Supplement or a supplement relating solely to an offering
of debt securities other than the Securities or any document filed under the Act
or Exchange Act which is incorporated by reference into the Prospectus, at any
time prior to having afforded each Agent a reasonable opportunity to review and
comment on it; (iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Securities, and during such same period to advise such Agent, promptly
after the Company receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or has become effective or any supplement
to the Prospectus or any amended Prospectus, other than a supplement relating
solely to an offering of debt securities other than the Securities and other
than any Pricing Supplement that relates to Securities not purchased through or
by such Agents, has been filed with, or mailed for filing to, the Commission, of
the issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
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suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amendment or supplement of
the Registration Statement or Prospectus or for additional information; and (v)
in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Securities or
suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) Promptly from time to time to take such action as such Agent reasonably
may request to qualify the Securities for offering and sale under the securities
laws of such United States jurisdictions as such Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution or sale of the
Securities; provided, however, that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement and
each amendment thereto, with copies of the Prospectus as each time amended or
supplemented, other than any Pricing Supplement (except as provided in the
Administrative Procedure) or a prospectus supplement relating solely to an
offering of debt securities other than the Securities, in the form in which it
is filed with the Commission pursuant to Rule 424 under the Act, and with copies
of the documents incorporated by reference therein, all in such quantities as
such Agent may reasonably request from time to time; and, if the delivery of a
prospectus is required at any time in connection with the offering or sale of
the Securities (including Securities purchased from the Company by such Agent as
principal) and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify such Agent and request such
Agent, in its capacity as agent of the Company, to suspend solicitation of
offers to purchase Securities from the Company (and, if so
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notified, such Agent shall cease such solicitations as soon as practicable, but
in any event not later than one business day later); and if the Company shall
decide to amend or supplement the Registration Statement or the Prospectus as
then amended or supplemented, to so advise such Agent promptly by telephone
(with confirmation in writing) and to prepare and cause to be filed promptly
with the Commission an amendment or supplement to the Registration Statement or
the Prospectus as then amended or supplemented that will correct such statement
or omission or effect such compliance; provided, however, that if during such
same period such Agent continues to own Securities purchased from the Company by
such Agent as principal or such Agent is otherwise required to deliver a
prospectus in respect of transactions in the Securities, the Company shall
promptly prepare and file with the Commission such an amendment or supplement;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after (i) the
effective date of the Registration Statement (as defined in Rule 158(c)), (ii)
the effective date of each post-effective amendment to the Registration
Statement, and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K that is incorporated by reference in the
Registration Statement, an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to each Agent
copies of all reports or other communications (financial or other) furnished to
stockholders, and deliver to such Agent (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as such Agent may from time to
time reasonably request (such financial statements to be on a consolidated basis
to the extent the accounts of the Company and its subsidiaries are consolidated
in reports furnished to its stockholders generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or other
agreement by such Agent to purchase Securities as principal, if required by such
Terms Agreement or other agreement, and continuing to and including the
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earlier of (i) the termination of the trading restrictions for the Securities
purchased thereunder, as notified to the Company by such Agent and (ii) the
related Time of Delivery, the Company will not, without the prior written
consent of such Agent, offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company which both mature more than 9 months after such
Time of Delivery and are substantially similar to the Securities, other than
debt securities which the Company has previously contracted to sell and with
respect to which the Company has advised such Agent in or in connection with
such Terms Agreement or other agreement or of which such Agent has actual
knowledge thereof;
(g) That each acceptance by the Company of an offer to purchase Securities
hereunder (including any purchase by such Agent as principal not pursuant to a
Terms Agreement), and each execution and delivery by the Company of a Terms
Agreement with such Agent, shall be deemed to be an affirmation to such Agent
that the representations and warranties of the Company contained in or made
pursuant to this Agreement are true and correct as of the date of such
acceptance or of such Terms Agreement, as the case may be, as though made at and
as of such date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Securities relating
to such acceptance or as of the Time of Delivery relating to such sale, as the
case may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Securities);
(h) That on April 15 (or if such day is not a business day, the next
succeeding business day) of every year this Agreement is in effect, beginning on
April 15, 1997, or as otherwise reasonably requested by the Agents, and each
time the Company sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of an opinion or
opinions by Sullivan & Cromwell, counsel to the Agents, as a condition to the
purchase of Securities pursuant to such Terms Agreement, the Company shall
furnish to such counsel such papers and information as they may reasonably
request to enable them to furnish to such Agent the opinion or opinions referred
to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Supplement or a supplement
relating solely to an offering of debt securities other than the Securities),
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each time a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus (other than a current report on Form 8-K unless
reasonably requested by the Agents) and each time the Company sells Securities
to such Agent as principal pursuant to a Terms Agreement and such Terms
Agreement specifies the delivery of an opinion under this Section 4(i) as a
condition to the purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such Agent written
opinions of Kevin J. Tierney, Senior Vice President, Secretary and General
Counsel of the Company, or other counsel for the Company satisfactory to such
Agent, dated the date of such amendment, supplement or incorporation or the Time
of Delivery relating to such sale, as the case may be, in form satisfactory to
such Agent, to the effect that such Agent may rely on such opinion of such
counsel referred to in Section 6(c) hereof which were last furnished to such
Agent to the same extent as though it were dated the date of such letter
authorizing reliance (except that the statements in such last opinions shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such opinions, opinions of the same
tenor as the opinions of such counsel referred to in Section 6(c) hereof but
modified to relate to the Registration Statement and the Prospectus as amended
and supplemented to such date;
(j) That on April 15 (or if such day is not a business day, the next
succeeding business day) of every year this Agreement is in effect, beginning on
April 15, 1997, or as otherwise reasonably requested by the Agents, and each
time the Company sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of an opinion under
this Section 4(j) as a condition to the purchase of Securities pursuant to such
Terms Agreement, the Company shall furnish or cause to be furnished forthwith to
such Agent written opinions of Skadden, Arps, Slate, Meagher & Flom, special
counsel for the Company, or other counsel for the Company satisfactory to such
Agent, in form satisfactory to such Agent, to the effect that such Agent may
rely on such opinion of such counsel referred to in Section 6(d) hereof which
were last furnished to such Agent to the same extent as though it were dated the
date of such letter authorizing reliance (except that the statements in such
last opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu of such
opinions, opinions of the same tenor as the opinions of such counsel referred to
in Section 6(d) hereof but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date;
-14-
(k) That each time the Registration Statement or the Prospectus shall be
amended or supplemented (other than a supplement relating solely to an offering
of debt securities other than the Securities) and each time that a document
filed under the Act or the Exchange Act is incorporated by reference into the
Prospectus (other than a Current Report on Form 8-K unless reasonably requested
by the Agents), in either case to set forth financial information included in or
derived from the Company's consolidated financial statements or accounting
records, and each time the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies the delivery of
a letter under this Section 4(k) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall cause the independent
certified public accountants who have audited the financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement to furnish such Agent a letter, dated the date of such
amendment, supplement or incorporation or the Time of Delivery relating to such
sale, as the case may be, in form satisfactory to such Agent, of the same tenor
as the letter referred to in Section 6(e) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the date
of such letter, with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting records
of the Company, to the extent such financial statements and other information
are available as of a date not more than five business days prior to the date of
such letter; provided, however, that, with respect to any financial information
or other matter, such letter may reconfirm as true and correct at such date as
though made at and as of such date, rather than repeat, statements with respect
to such financial information or other matter made in the letter referred to in
Section 6(e) hereof which was last furnished to such Agent; and
(l) That each time the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Supplement or a prospectus
supplement relating solely to an offering of debt securities other than the
Securities), each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus (other than a Current Report on
Form 8-K unless reasonably requested by the Agents), and each time the Company
sells Securities to such Agent as principal and the applicable Terms Agreement
specifies the delivery of a certificate under this Section 4(l) as a condition
to the purchase of Securities pursuant to such Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to
-15-
such Agent a certificate, dated the date of such supplement, amendment,
incorporation or the Time of Delivery relating to such sale, as the case may be,
in such form and executed by such officers of the Company as shall be
satisfactory to such Agent, to the effect that the statements contained in the
certificates referred to in Section 6(h) hereof which were last furnished to
such Agent are true and correct at such date as though made at and as of such
date (except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or, in
lieu of such certificate, certificates of the same tenor as the certificates
referred to in said Section 6(h) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date.
5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to the
Agents; (ii) the reasonable fees and expenses of counsel for the Agents in
connection with the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and the transactions
contemplated hereunder; (iii) the cost of printing, preparing by word processor
or reproducing this Agreement, any Terms Agreement, the Indenture, any Blue Sky
and Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iv) all expenses in
connection with the qualification of the Securities for offering and sale under
state securities laws as provided in Section 4(b) hereof, including reasonable
fees and disbursements of counsel for the Agents in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(v) any fees charged by securities rating services for rating the Securities;
(vi) any filing fees incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Securities; (vii)
the cost of preparing, and providing any CUSIP or other identification number
for, the Securities; (viii) the fees and expenses of the Trustee and any agent
of the Trustee and any transfer or 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
-16-
of any Depositary (as defined in the Indenture) and any nominees thereof in
connection with the Securities; (x) any reasonable advertising expenses
connected with the solicitation of offers to purchase and the sale of Securities
so long as such advertising expenses have been approved in advance by the
Company (any advertising expense approved by the Company in advance shall be
deemed to be reasonable); and (xi) all other reasonable costs and expenses
incident to the performance of the Company's obligations hereunder which are not
otherwise specifically provided for in this Section. Except as provided in
Sections 7 and 8 hereof, each Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities, the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, and the obligation of any purchaser of Securities
as a result of an offer to purchase solicited by any Agent, shall be subject, in
the discretion of such Agent or purchaser, as the case may be, to the condition
that all representations and warranties and other statements of the Company
herein (and, in the case of an obligation of the Agents under a Terms Agreement,
in or incorporated in such Terms Agreement by reference) are true and correct at
and as of the Commencement Date and any applicable date referred to in Section
4(l) hereof, as the case may be, and at and as of such Solicitation Time,
settlement date or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time, settlement date or Time of Delivery, as the
case may be, the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time, settlement date or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing Supplement) with
respect to such Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
4(a) hereof; (ii) no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; (iii) all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of such Agent; and (iv) after
the date of any Terms Agreement or other agreement by an Agent to purchase
Securities as principal and prior to the
-17-
related Time of Delivery no document shall have been incorporated by reference
into the Prospectus which shall be disapproved by such Agent promptly after
reasonable notice thereof;
(b) Sullivan & Cromwell, counsel to the Agents, shall have furnished to
such Agent (i) such opinion or opinions, dated the Commencement Date, with
respect to the incorporation of the Company, the validity of the Indenture, the
Securities, the Registration Statement, the Prospectus as amended or
supplemented and other related matters as such Agent may reasonably request, and
(ii) if and to the extent requested by such Agent, with respect to each
applicable date referred to in Section 4(h) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, an opinion or
opinions, dated such applicable date, to the effect that such Agent may rely on
the opinion or opinions which were last furnished to such Agent pursuant to this
Section 6(b) to the same extent as though it or they were dated the date of such
letter authorizing reliance (except that the statements in such last opinion or
opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in any case, in lieu of
such an opinion or opinions, an opinion or opinions of the same tenor as the
opinion or opinions referred to in clause (i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date; and in each case such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Kevin J. Tierney, Senior Vice President, Secretary and General Counsel
of the Company, or other counsel for the Company satisfactory to such Agent,
shall have furnished to such Agent his written opinions, dated the Commencement
Date and each applicable date referred to in Section 4(i) hereof that is on or
prior to such Solicitation Time or Time of Delivery, as the case may be, in form
and substance satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus as
amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented and all of the issued
-18-
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(iii) The Company is qualified to do business, and is in good
standing, as a foreign corporation under the laws of each jurisdiction in
which the business conducted by it requires such qualification or, if not
so qualified and in good standing in any such jurisdiction, such failure to
be so qualified and in good standing, as of the date of this opinion, will
not result in liabilities material to the business of the Company;
(iv) Each subsidiary of the Company has been duly organized, and is
subsisting and in good standing as a corporation under the laws of its
jurisdiction of incorporation, and all of the issued shares of capital
stock of each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and, to the best knowledge of
such counsel, are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect on
the consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) This Agreement and any applicable Terms Agreement have been duly
authorized, executed and delivered by the Company;
(vii) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company, will
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the
-19-
Indenture, except to the extent that the enforcement thereof may be limited
by (1) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and
(2) general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or equity) and except further as
enforcement thereof may be limited by (x) requirements that a claim with
respect to any Securities denominated other than in United States dollars
(or a foreign currency of foreign currency unit judgement in respect of
such claim) be converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or
(y) governmental authority to limit, delay or prohibit the making of
payments in foreign currency or currency units or payments outside the
United States and the Indenture conforms and the Securities will conform
to the descriptions thereof in the Prospectus as amended or supplemented;
(viii) The Indenture has been duly authorized, executed and delivered
by the parties thereto and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, except to the extent
that the enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or thereafter in
effect relating to creditors' rights generally and (2) general principles
of equity (regardless of whether enforcement is considered in a proceeding
at law or equity) and except further as enforcement thereof may be
limited by (x) requirements that a claim with respect to any Securities
denominated other than in United States dollars (or a foreign currency
or foreign currency unit judgement in respect of such claim) be converted
into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (y) governmental authority to
limit, delay or prohibit the making of payments in foreign curency or
currency units or payments outside the United States and the Indenture
has been duly qualified under the Trust Indenture Act;
(ix) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any applicable Terms Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which
the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, nor will such actions
result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company or any statute or any order, rule
or regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its properties;
(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 pur-
-20-
chase Securities, the issue and sale of the Securities or the consummation
by the Company of the other transactions contemplated by this Agreement,
any applicable Terms Agreement or the Indenture, except such as have been
obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities, insurance or Blue Sky laws in connection
with the solicitation by the Agents of offers to purchase Securities from
the Company and with purchases of Securities by an Agent as principal, as
the case may be, in each case in the manner contemplated hereby;
(xi) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and he has no reason to believe that any of
such documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which became
effective under the Act, an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed,
not misleading; and
(xii) The Registration Statement and the Prospectus as amended and
supplemented and any further amendments and supplements thereto made by the
Company prior to the date of such opinion (other than the financial
statements and related schedules therein, as to which such counsel need
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.
-21-
In addition, such counsel shall state that he has no reason to believe
that, as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the date of such opinion (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of its date,
the Prospectus as amended or supplemented or any further amendment or supplement
thereto made by the Company prior to the date of such opinion (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
that, as of the date of such opinion, either the Registration Statement or the
Prospectus as amended or supplemented or any amendment or supplement thereto
made by the Company prior to the date of such opinion (other than the financial
statements and related schedules therein, as to which such counsel need express
no opinion) contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading; and he shall state that he does not know of any amendment to the
Registration Statement required to be filed or any contracts or other documents
of a character required to be filed as an exhibit to the Registration Statement
or required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or incorporated by
reference or described as required;
(d) Skadden, Arps, Slate, Meagher & Flom, special counsel for the Company,
or other counsel satisfactory to such Agent shall have furnished to such Agent
their written opinions, dated the Commencement Date and each applicable date
referred to in Section 4(j) hereof that is on or prior to such Solicitation Time
or Time of Delivery, as the case may be, in form and substance satisfactory to
such Agent, to the effect that:
(i) The Indenture has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement, enforceable against the Company in
accordance with its terms, except to the extent that enforcement thereof may be
limited by (1) bankruptcy,
-22-
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, (2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), (3)
requirements that a claim with respect to any Securities denominated other than
in United States dollars (or a judgment denominated other than in United States
dollars in respect of such claim) be converted into United States dollars at a
rate of exchange prevailing on a date determined pursuant to applicable law and
(4) governmental authority to limit, delay or prohibit the making of payments in
foreign currencies or composite currencies or currency units; and
(ii) The Securities, when executed and authenticated in accordance with the
terms of the Indenture, when the terms of the Securities have been fixed by any
member of the pricing committee in conformity with the Indenture, the board of
directors resolutions and the pricing committee resolutions, and when such
Securities have been issued, sold and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in this Agreement, will
be valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or similar laws now
or hereafter in effect relating to or affecting creditors' rights generally, (2)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity), (3) requirements that a claim with respect
to any Securities denominated other than in United States dollars (or a judgment
denominated in other than United States dollars in respect of such claim) be
converted into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law and (4) governmental authority to limit,
delay or prohibit the making of payments in foreign currencies or composite
currencies or currency units;
(e) (i) Not later than 10:00 a.m., New York City time, on the Commencement
Date and on each applicable date referred to in Section 4(k) hereof that is on
or prior to such Solicitation Time or Time of Delivery, as the case may be, the
independent certified public accountants who have audited the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to such Agent a
letter, dated the Commencement Date or such applicable date,
-23-
as the case may be, in form and substance satisfactory to
such Agent, to the effect set forth in Annex III hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented and (ii) since the
respective dates as of which information is given or incorporated by reference
in the Prospectus as amended or supplemented there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of such Agent so material and adverse as
to make it impracticable or inadvisable to proceed with the solicitation by such
Agent of offers to purchase Securities from the Company or the purchase by such
Agent of Securities from the Company as principal, as the case may be, on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented;
(g) There shall not have occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange; (ii) a general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; (iii) the outbreak or
material escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iii) in the judgment of such Agent
makes it impracticable or inadvisable to proceed with the solicitation of offers
to purchase Securities or the purchase of Securities from the Company as
principal, pursuant to the applicable Terms Agreement or otherwise, as the case
may be, on the terms and in the manner contemplated in the Prospectus as amended
or supplemented; (iv) any downgrading in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act; or (v) any such "nationally recognized sta-
-24-
tistical rating organization" shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities; and
(h) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Commencement Date and
each applicable date referred to in Section 4(l) hereof that is on or prior to
such Solicitation Time or Time of Delivery, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such Agent,
as to the accuracy of the representations and warranties of the Company herein
at and as of the Commencement Date or such applicable date, as the case may be,
as to the performance by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable date, as the
case may be, as to the matters set forth in subsections (a) and (f) of this
Section 6, and as to such other matters as such Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent against any
losses, claims, damages or liabilities, joint or several, to which such Agent
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Agent for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and provided further, that the Company shall not be
liable to such Agent under the indemnity agreement in this subsection (a) with
respect to any
-25-
Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Agent results from the fact such Agent sold Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) in any case where such delivery
is required by the Act if the Company has previously furnished copies thereof to
such Agent and the loss, claim, damage or liability of such Agent results from
an untrue statement or omission of a material fact contained in the Preliminary
Prospectus which was corrected in the Prospectus (or the Prospectus as amended
or supplemented).
(b) Each Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any
-26-
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 7 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and each Agent on the other from the offering of
the Securities to which such loss, claim, damage or liability (or action in
respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and each Agent on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each Agent on the
other shall be deemed to be in the same proportion as the total net proceeds
from the sale of such Securities (before deducting expenses) received by the
Company bear to the total commissions or discounts received by such Agent in
respect thereof. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
-27-
information supplied by the Company on the one hand or by any Agent on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each Agent agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by per capita allocation (even
if all Agents were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), an Agent shall
not be required to contribute any amount in excess of the amount by which the
total public offering price at which the Securities purchased by or through it
were sold exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of each of the Agents under this subsection (d) to contribute are
several in proportion to their respective purchases made by or through it to
which such loss, claim, damage or liability (or action in respect thereof)
relates and are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Agent within the meaning of the Act; and the obligations of each Agent under
this Section 7 shall be in addition to any liability which such Agent may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities from the Company
and in performing the other obligations of such Agent hereunder (other than in
respect of any purchase by an Agent as principal, pursuant to a Terms Agreement
or otherwise) is acting solely as agent for the Company and not as principal.
Each Agent will make reasonable efforts to assist the Company in obtaining
-28-
performance by each purchaser whose offer to purchase Securities from the
Company was solicited by such Agent and has been accepted by the Company, but
such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties and
other statements by any Agent and the Company set forth in or made pursuant to
this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of offers
to purchase Securities from the Company may be suspended or terminated at any
time by the Company as to any Agent or by any Agent as to such Agent upon the
giving of written notice of such suspension or termination to such Agent or the
Company, as the case may be. In the event of any such termination or suspension,
no party will have any liability, duty or obligation to any other party hereto,
except that (x) this Agreement shall remain in full force and effect with
respect to any Agent as to which such suspension or termination has not
occurred, (y) this Agreement shall remain in full force and effect with respect
to the rights and obligations of any party which have previously accrued or
which relate to Securities which are already issued, agreed to be issued or the
subject of a pending offer at the time of such suspension or termination and (z)
in any event, this Agreement shall remain in full force and effect insofar as
the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5,
Section 7, Section 8 and Section 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or regis-
-29-
tered mail to 85 Broad Street, New York, New York 10004, Facsimile Transmission
No. (212) 902-4103, Attention: Registration Department; if to Morgan Stanley &
Co., Incorporated shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to 1585 Broadway, 2nd Floor,
New York, NY 10036, Facsimile Transmission No. (212) 761-0780, Attention:
Manager-Continuously Offered Products, telephone No. (212) 761-2000, with a
copy to 1585 Broadway, 34th Floor, New York, NY 10036, Attention:
Peter Cooper, Investment Banking Information Center. Facsimile transmission
no. 212 761-0260, telephone no. 212 761-8385; and if to the Company shall be
sufficient in all respects when delivered or sent by facsimile transmission
or registered mail to it at its address set forth in the Prospectus.
12. This Agreement and any Terms Agreement shall be binding upon, and inure
solely to the benefit of, each Agent and the Company, and to the extent provided
in Section 7, Section 8 and Section 9 hereof, the officers and directors of the
Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from any Agent
hereunder shall be deemed a successor or assign by reason of such purchase.
13. Time shall be of the essence in this Agreement and any Terms Agreement.
As used herein, the term "business day" shall mean any day when the office of
the Commission in Washington, D.C. is open for business.
14. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
16. This Agreement may be amended or supplemented if, but only if, such
amendment or supplement is in writing and is signed by the Company and each
Agent; provided that the Company may from time to time, on 15 days prior written
notice to the Agents but without the consent of any Agent, amend this Agreement
to add as a party hereto one or more additional firms registered under the
Exchange Act, whereupon each such firm shall become an Agent hereunder on
substantially the same terms and conditions as the other
-30-
Agents that are parties hereto. Each Agent shall sign any amendment or
supplement giving effect to the addition of any such firm as an Agent under this
Agreement or shall terminate the provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company pursuant to
Section 10 with respect to such Agent.
-31-
If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts hereof, whereupon this letter and the acceptance
by each of you thereof shall constitute a binding agreement between the Company
and each of you in accordance with its terms.
Very truly yours,
UNUM CORPORATION
By: /s/ ROBERT E. BROATCH
---------------------
Name: Robert E. Broatch
Title: Senior Vice President
Accepted in New York, New York,
as of the date hereof:
/S/GOLDMAN, SACHS & CO.
- -----------------------------
(Goldman, Sachs & Co.)
MORGAN STANLEY & CO. INCORPORATED
By: /S/MICHAEL ROLLINGS
-----------------------
Name: Michael Rollings
Title: Vice President
-32-
ANNEX I
UNUM CORPORATION
Medium-Term Notes, Series C
Terms Agreement
___________, 199_
[Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004]
[Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020]
Dear Sirs:
UNUM Corporation (the "Company") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated August 15,
1996 (the "Distribution Agreement"), between the Company on the one hand and
Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated (the "Agents"), on
the other, to issue and sell to [Goldman, Sachs & Co.] [Morgan Stanley & Co.
Incorporated] the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provision had been set forth in full herein. Nothing contained
herein or in the Distribution Agreement shall make any party hereto an agent of
the Company or make such party subject to the provisions therein relating to the
solicitation of offers to purchase securities from the Company, solely by virtue
of its execution of this Terms Agreement. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement, except that each representation and warranty in
Section 1 of the Distribution Agreement which makes reference to the Prospectus
shall be deemed to be a representation and warranty as of the date of the
Distribution Agreement in relation to the Prospectus (as therein defined), and
also a representation and warranty as of the date of this Terms Agreement in
relation to the Prospectus as amended and supplemented to relate to the
Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the
Purchased Securities, in the form heretofore delivered to you is now proposed to
be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Goldman, Sachs & Co.] [Morgan Stanley & Co. Incorporated] and
[Goldman, Sachs & Co.] [Morgan Stanley & Co. Incorporated] agree[s] to purchase
from the Company the Purchased Securities, at the time and place, in the
principal amount and at the purchase price set forth in the Schedule hereto.
The Company agrees that from the date of this Terms Agreement by [Goldman,
Sachs & Co.] [Morgan Stanley & Co. Incorporated] to purchase Securities as
principal and continuing to and including the earlier of (i) the termination of
the trading restrictions for the Securities purchased hereunder, as notified to
the Company by such Agent[s] and (ii) the related Time of Delivery, the Company
will not, without the prior written consent of such Agent[s], offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
which both mature more than 9 months after such Time of Delivery and are
substantially similar to the Securities [other than debt securities which the
Company has previously contracted to sell pursuant to the following contracts:
[list contracts]].
Defined terms used herein and not defined herein shall have the meaning
given such terms in the Distribution Agreement.
If the foregoing is in accordance with your understanding, please sign and
return to us three (3) counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
UNUM CORPORATION
By:___________________
Accepted:
[____________________________]
(Goldman, Sachs & Co.)
[MORGAN STANLEY & CO. INCORPORATED
By:___________________________]
-2-
Schedule to Annex I
Title of Purchased Securities:
[[ %] Medium-Term Notes, Series C]
Aggregate Principal Amount:
[$ or units of other Specified Currency]
[Price to Public:]
Purchase Price by [Goldman, Sachs & Co.] [Morgan Stanley & Co.
Incorporated]
% of the principal amount of the Purchased
Securities[, plus accrued interest from to ]
[and accrued amortization, if any, from to ]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of
the Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company
in [next day] [immediately available] funds]]
Indenture:
Indenture, dated as of September 15, 1990, between the
Company and The Chase Manhattan Bank (National Association),
as Trustee
Time of Delivery:
Closing Location:
Maturity:
-3-
Interest Rate [and Formula]:
[ %]
Interest Payment Dates:
[months and dates]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(l) The opinion or opinions of counsel to the Agents
referred to in Section 4(h).]
[(2) The opinions of counsel to the Company referred to
in Sections 4(i) and 4(j).]
[(4) The accountants' letter referred to in
Section 4(k).]
[(5) The officers' certificate referred to in
Section 4(1).]
Other Provisions:
-4-
ANNEX II
UNUM Corporation
Administrative Procedure
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated August 15, 1996 (the "Distribution Agreement"),
between UNUM Corporation (the "Company") and Goldman, Sachs & Co. and Morgan
Stanley & Co. Incorporated (together, the "Agents"), to which this
Administrative Procedure is attached as Annex II. Defined terms used herein and
not defined herein shall have the meanings given such terms in the Distribution
Agreement, the Prospectus as amended or supplemented or the Indenture.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. Part I describes procedures of general applicability
with respect to such Securities. Part II below describes procedures specifically
and exclusively applicable (any procedure in Part I below to the contrary
notwithstanding) to such Securities which are either Global Certificates or
Book-Entry Securities (each as defined below). The terms and settlement details
related to a purchase of Securities by an Agent, as principal, from the Company
will be set forth in a Terms Agreement pursuant to the Distribution Agreement,
unless the Company and such Agent otherwise agree as provided in Section 2(b) of
the Distribution Agreement, in which case the procedures to be followed in
respect of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Unless otherwise specified in the applicable Pricing Supplement, each
Security will be issued only in fully registered form and will be initially
represented by either a permanent global certificate (a "Global Certificate")
delivered to the Trustee, as agent for The Depository Trust Company (the
"Depository") or a certificate (a "Definitive Certificate") delivered to a
person designated by an Agent. Each security which is represented by a Global
Certificate is referred to herein as a
"Book-Entry Security" (it being understood that only such Global Certificate --
and not any such Book-Entry Security represented thereby -- constitutes a
"Security" under the Indenture).
Pursuant to Sections 301 and 1002 of the Indenture, the Company has
appointed The Chase Manhattan Bank, successor by merger to The Chase Manhattan
Bank (National Association) as Paying Agent (the "Paying Agent") and as
Calculation Agent (the "Calculation Agent") for the Securities. In addition, the
Company has appointed The Chase Manhattan Bank, successor by merger to The Chase
Manhattan Bank (National Association) as its agent (the "Issuing Agent") in
connection with certain procedures to be followed with respect to the settlement
of sales of Securities, as set forth herein.
PART I: PROCEDURES OF APPLICABILITY TO
BOTH CERTIFICATED SECURITIES
AND BOOK-ENTRY SECURITIES
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Securities that may be
sold as a result of the solicitation of offers by an Agent. The Company may
establish a fixed set of interest rates and maturities for an offering period
("posting"). If the Company decides to change already posted rates, it will
promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Securities, other than
those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it in whole or in part. Each Agent also
may make offers to the Company to purchase Securities as a Purchasing Agent. The
Company will have the sole right to accept offers to purchase Securities and may
reject any such offer in whole or in part.
The Company will promptly notify the Selling Agent or Purchasing Agent, as
the case may be, of its acceptance or rejection of an offer to purchase
Securities. If the Company accepts an offer to purchase Securities, it will
confirm such acceptance in writing to the Selling Agent or Purchasing Agent, as
the case may be, and the Trustee.
II-2
Communication of Sale Information
to the Company by Selling Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal amount of Securities to be purchased;
(2) Identification as a Fixed Rate Security, Floating Rate Security or
Zero Coupon Security;
(3) If a Fixed Rate Security, the interest rate and the initial interest
payment date;
(4) Maturity Date;
(5) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency and
the Exchange Rate Agent;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(8) Net proceeds to the Company;
(9) Settlement Date;
(10) If a Security is redeemable by the Company, such of the following as
are applicable:
(i) Redemption Commencement Date,
(ii) Redemption Prices (% of par) and Redemption Periods,
(iii) The Repayment Date and the Repayment Price, and
(iv) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption Commencement
Date;
II-3
(v) The Make-Whole Premium;
(11) If a Security is to be repaid at the option of the Holder, the date on
or after which the Security is to be repaid, and additional
provisions, if any;
(12) If a Floating Rate Security, such of the following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Interest Rate,
(v) Minimum Interest Rate,
(vi) Initial Interest Rate,
(vii) Interest Rate Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) If an Amortizing Security, the amortization provisions, formula and
the amortization schedule;
(14) If the amount of principal payable on a Security will be determined by
reference to an index or formula, a full description of such index or
formula;
(15) If an OID Note, the total amount of OID, the Yield to Maturity and the
initial accrual period of OID;
(16) Name, address and taxpayer identification number of the registered
owner;
(17) Denomination of certificates to be delivered at settlement;
(18) Book-Entry Security or Certificated Security; and
(19) Any other applicable terms.
Preparation of Pricing Supplement by the Company:
If the Company accepts an offer to purchase a Security, it will prepare a
Pricing Supplement. The Company
II-4
will supply at least ten copies of such Pricing Supplement to the Selling Agent
or Purchasing Agent, as the case may be, not later than 5:00 p.m., New York City
time, on the business day following the date of acceptance of such offer, or if
the Company and the purchaser agree to settlement on the date of such
acceptance, not later than noon, New York City time, on such date. The Company
will arrange to have each Pricing Supplement filed with the Commission under
Rule 424(b) not later than the close of business of the Commission on the fifth
business day (or such other date Rule 424 shall require) following the date on
which such Pricing Supplement is first used. One copy of such filed document
will be sent by telecopy or overnight express (for delivery not later than 11:00
A.M. on the Business Day next following the trade date) to the Selling Agent or
the Purchasing Agent, as the case may be, at the following applicable addresses:
Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, Facsimile
Transmission No. (212) 902-4103, Attention: Don Hansen, Registration, 18th
Floor; Morgan Stanley & Co. Incorporated, 1585 Broadway, 2nd Floor, New York,
New York, 10036, Facsimile Transmission: (212) 761-8846, Telephone
No. 212 761-2000, Attention: Medium-Term Note Trading Desk, Carlos Cabrera.
Delivery of Confirmation and
Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Security a written
confirmation of the sale and delivery and payment instructions. In addition, the
Selling Agent will deliver to such purchaser or its agent the Prospectus as
amended or supplemented (including the Pricing Supplement) in relation to such
Security prior to or together with the earlier of the delivery to such purchaser
or its agent of (a) the confirmation of sale (including, in the case of a
Book-Entry Security, the confirmation through the Depository's Institutional
Delivery System) or (b) the Security.
Date of Settlement:
All offers solicited by a Selling Agent or made by a Purchasing Agent and
accepted by the Company will be settled on a date (the "Settlement Date") which
is the third business day after the date of acceptance of such offer, unless the
Company and the purchaser agree to settlement (a) on any other business day
after the acceptance of such offer or (b) with respect to an offer accepted by
the Company prior to 10:00 a.m., New York City time, on the date of such
acceptance.
II-5
Instruction from the Company to
Issuing Agent for Preparation of Securities:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Issuing Agent by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Issuing Agent by facsimile transmission or
other acceptable written means to authenticate and deliver the Securities no
later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 2:00 p.m., New York City time,
on the second business day prior to the Settlement Date unless, in the case of
Securities evidenced by a Definitive Certificate, the Settlement Date is the
date of acceptance by the Company of the offer to purchase such Securities in
which case such instruction will be given by the Company by 11:00 a.m., New York
City time. The Trustee will authenticate and deliver to the Issuing Agent each
Security in accordance with the Company's instructions.
Preparation and Delivery of Securities
by Issuing Agent and Receipt of Payment Therefor:
The Issuing Agent will prepare each Security and appropriate receipts that
will serve as the documentary control of the transaction.
In the case of a sale of Securities to a purchaser solicited by an Agent,
the Issuing Agent will, by 2:15 p.m., New York City time, on the Settlement
Date, deliver the Securities to the Selling Agent for the benefit of the
purchaser of such Securities against delivery by the Selling Agent of a receipt
therefor. On the Settlement Date the Selling Agent will deliver payment for such
Securities in immediately available funds to the Company in an amount equal to
the issue price of the Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to purchase securities or carry any securities in
violation of Regulations G, T, U or X of the Federal Reserve Board or otherwise
in violation of law.
In the case of a sale of Securities to a Purchasing Agent, the Issuing
Agent will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Securities to the Purchasing Agent against delivery by the
II-6
Purchasing Agent of a receipt therefor. On the Settlement Date the Purchasing
Agent will deliver payment for such Securities in immediately available funds to
the Company in an amount equal to the issue price of the Securities less the
Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to the
Selling Agent for a Security or the Selling Agent fails to make payment to the
Company, the Selling Agent will promptly notify the Trustee and the Company
thereof by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means. The Selling Agent will immediately return the
Security to the Issuing Agent. Immediately upon receipt of such Security by the
Issuing Agent, the Company will return to the Selling Agent an amount equal to
the amount previously paid to the Company in respect of such Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Issuing Agent will cancel the Security in respect of which the failure
occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Security.
PART II: PROCEDURES APPLICABLE TO BOOK-ENTRY
SECURITIES AND GLOBAL CERTIFICATES
In connection with the qualification of Book-Entry Securities for
eligibility in the book-entry system maintained by the Depository, the Trustee
and the Paying Agent will perform the custodial, document control and
administrative functions described below, in accordance with their respective
obligations under a Letter of Representations from the Company and the Trustee
to the Depository, dated August 15, 1996, and a Medium-Term Note Certificate
Agreement, dated March 10, 1989, between The Chase Manhattan Bank (National
Association) and the Depository (the "Certificate Agreement"), and the
obligations of the Trustee as a participant in the Depository, including the
Depository's Same-Day Funds Settlement System ("SDFS"). It is understood that
the ownership interests of purchasers of Book-Entry Securities will be credited
to the book-entry accounts of one or more participants in the Depository (each a
"Participant") in accordance with the Depository's customary practices and
reflected in the records of such Participants or one or more indirect
Participants in the Depository designated by such purchasers
II-7
in accordance with the arrangements between such purchasers and such
Participants and indirect participants. As used in this Part II, the term
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
Issuance: All Fixed Rate Securities which are
Book-Entry Securities and have the
same Original Issue Date, redemp-
tion or repayment provisions,
Interest Payment Dates, interest
rate, interest payment periods and
Stated Maturity (collectively, the
"Fixed Rate Terms") will be
represented initially by a single
Global Certificate in fully
registered form without coupons;
all Floating Rate Securities which
are Book-Entry Securities and have
the same Original Issue Date,
redemption or repayment provisions,
Interest Payment Dates, interest
payment periods, Interest Rate
Basis, Initial Interest Rate, Index
Maturity, Spread or Spread
Multiplier, if any, Minimum
Interest Rate, if any, Maximum
Interest Rate, if any, and Stated
Maturity (collectively, the
"Floating Rate Terms") will be
represented initially by a single
Global Certificate in fully
registered form without coupons;
and all Zero Coupon Securities
which are Book-Entry Securities and
have the same Original Issue Date,
redemption or repayment provisions,
Yield to Maturity, Specified
Currency and Stated Maturity
(collectively, the "Zero Coupon
Terms") will be represented
initially by a single Global
Certificate in fully registered
form without coupons.
Identification: The Company has arranged with the
CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP
Service Bureau") for the
reservation of approximately 900
II-8
CUSIP numbers which have been
reserved for future assignment and
relating to Book-Entry Securities,
and the Company has delivered to the
Issuing Agent and the Depository
such list of such CUSIP numbers. The
Company will assign CUSIP numbers to
Global Certificates representing
Book-Entry Securities as described
below under Settlement Procedure C.
The Depository will notify the CUSIP
Service Bureau periodically of the
CUSIP numbers that the Company has
assigned to Global Certificates
representing Book-Entry Securities.
The Trustee will notify the Company
at any time when fewer than 100 of
the reserved CUSIP numbers remain
unassigned to Global Certificates
representing Book-Entry Securities,
and, if it deems necessary, the
Company will reserve additional
CUSIP numbers for assignment to
Global Certificates representing
Book-Entry Securities. Upon
obtaining such additional CUSIP
numbers, the Company will deliver a
list of such additional numbers to
the Issuing Agent and the
Depository. Book-Entry Securities
having an aggregate principal amount
in excess of $200,000,000 and
otherwise required to be represented
by the same Global Certificate will
instead be represented by two or
more Global Certificates which shall
all be assigned the same CUSIP
number.
Registration: Each Global Certificate will be
registered in the name of Cede &
Co., as nominee for the Depository,
on the Security Register maintained
by the Trustee under the Indenture.
On the first Business Day of each
month, the Trustee will deliver to
the Company a written statement
indicating the total principal
amount of Outstanding Book-Entry
II-9
Securities as of the immediately
preceding Business Day.
Transfers: Transfers of interests in a Book-
Entry Security will be effected in
accordance with arrangements in
effect between Participants (and in
certain cases, one or more indirect
participants in the Depository) and
the beneficial transferors and
beneficial transferees of such
Book-Entry Security, and the
interests of Participants therein
will be reflected as appropriate by
book entries made by the
Depository.
Exchanges: The Issuing Agent may deliver to
the Depository and the CUSIP
Service Bureau at any time a
written notice specifying (a) the
CUSIP numbers of two or more Global
Certificates (i) having the same
Fixed Rate Terms, Floating Rate
Terms or Zero Coupon Terms, as the
case may be (except that Original
Issue Dates need not be the same),
(ii) for which interest (if any)
has been paid to the same date and
(iii) which otherwise constitute
Securities of the same series and
tenor under the Indenture; (b) a
date, occurring at least 30 days
after such written notice is
delivered and at least 30 days
before the next Interest Payment
Date (if any) for such Book-Entry
Securities, on which such Global
Certificates shall be exchanged for
a single replacement Global
Certificate; and (c) a new CUSIP
number, obtained from the Company,
to be assigned to such replacement
Global Certificate. Upon receipt
of such a notice, the Depository
will send to its participants
(including the Issuing Agent) a
written reorganization notice to
the effect that such exchange will
occur on such date. Prior to the
specified exchange date, the
II-10
Issuing Agent will deliver to the
CUSIP Service Bureau written notice
setting forth such exchange date and
the new CUSIP number and stating
that, as of such exchange date, the
CUSIP numbers of the Global
Certificates to be exchanged will no
longer be valid. On the specified
exchange date, the Issuing Agent
will exchange such Global
Certificates for a single Global
Certificate authenticated by the
Trustee and bearing the new CUSIP
number, and the CUSIP numbers of the
exchanged Global Certificates will,
in accordance with CUSIP Service
Bureau procedures, be retired and
not reassigned. Notwithstanding the
foregoing, if the Global
Certificates to be exchanged exceed
$200,000,000 in aggregate principal
amount, one replacement Global
Certificate will be authenticated
and issued to represent each
$200,000,000 of principal amount of
the exchanged Global Certificates
and an additional Global Certificate
will be authenticated and issued to
represent any remaining principal
amount of such Global Certificates
(see "Denominations" below).
Denominations: All Book-Entry Securities will be
denominated in U.S. dollars. Book-
Entry Securities will be issued in
denominations of $1,000 principal
amount and any larger denomination
which is an integral multiple of
$1,000. Global Certificates will
be denominated in principal amounts
not in excess of $200,000,000. If
one or more Book-Entry Securities
having an aggregate principal
amount in excess of $200,000,000
would, but for the preceding
sentence, be represented by a
single Global Certificate, then one
Global Certificate will be issued
to represent each $200,000,000
II-11
principal amount of such Book-Entry
Security or Book-Entry Securities
and an additional Global Certificate
will be issued to represent any
remaining principal amount of such
Book-Entry Security or Book-Entry
Securities. In such a case, each of
the Global Certificates representing
such Book-Entry Security or
Securities shall be assigned the
same CUSIP number.
Interest: General. The Depository will
arrange for each pending deposit
message described under Settlement
Procedure C below to be transmitted
to Standard & Poor's Corporation,
which will use the message to
include certain information
regarding the related Book-Entry
Notes in the appropriate daily bond
report published by Standard &
Poor's Corporation.
Notice of Interest Payments and
Regular Record Dates. On the first
Business Day of January, April, July
and October of each year, the Paying
Agent will deliver to the Company
and to the Dividend Department of
the Depository a written list of
Regular Record Dates and Interest
Payment Dates that will occur during
the six-month period beginning on
such first Business Day with respect
to Global Certificates representing
Book-Entry Securities which are
Floating Rate Notes. Promptly after
each Interest Determination Date for
Book-Entry Securities which are
Floating Rate Notes, the Calculation
Agent will notify Standard & Poor's
Corporation of the interest rates
determined on such Interest
Determination Date.
Payments of Principal
and Interest: Payments of Interest Only.
Promptly after each Regular Record
II-12
Date, the Paying Agent will deliver
to the Company and the Dividend
Department of the Depository a
written notice specifying by CUSIP
number the amount of interest (if
any) to be paid on each Global
Certificate representing Book-Entry
Securities on the following Interest
Payment Date (other than an Interest
Payment Date coinciding with the
Maturity of such Certificate) and
the total of such amounts. The
Depository will confirm the amount
payable (if any) on each Global
Certificate representing Book-Entry
Securities on such Interest Payment
Date by reference to the daily bond
reports published by Standard &
Poor's Corporation. On such Interest
Payment Date the Company will pay to
the Paying Agent, and the Paying
Agent in turn will pay to the
Depository, such total amount of
interest due (other than at Maturity
of such Certificate), at the times
and in the manner set forth below
under "Manner of Payment". If an
Interest Payment Date for a
Book-Entry Note is not a Business
Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall
accrue on such payment for the
period from and after such Interest
Payment Date.
Payments at Maturity or upon
Redemption or Repayment. On or about
the first Business Day of each
month, the Paying Agent will deliver
to the Company and the Depository a
written list of principal, premium,
if any, and interest to be paid on
each Global Certificate representing
Book-Entry Securities maturing
either at Stated Maturity or on a
Redemption Date or a Repayment Date
("Maturity") in the following month.
The Paying Agent, the
II-13
Company and the Depository will
confirm the amounts of such
principal, premium (if any) and
interest payments with respect to
each such Global Certificate
representing Book-Entry Securities
on or about the fifth Business Day
preceding the Maturity of such
Global Certificate representing
Book-Entry Securities. At such
Maturity, the Company will pay to
the Paying Agent, and the Paying
Agent in turn will pay to the
Depository, the principal amount of
such Global Certificate representing
Book-Entry Securities, together with
interest and premium, if any, due at
such Maturity, at the times and in
the manner set forth below under
"Manner of Payment". Promptly after
payment to the Depository of the
principal, interest and premium, if
any, due at the Maturity of all
Book-Entry Securities represented by
a particular Global Certificate, the
Paying Agent will deliver to the
Trustee for cancellation such Global
Certificate.
Manner of Payment. The total amount
of principal, premium and interest
due on Global Securities
representing Book-Entry Securities
on any Interest Payment Date or at
Maturity shall be paid by the
Company to the Paying Agent, in
funds immediately available for use
by the Trustee as of 9:30 a.m., New
York City time, on such date. The
Company will make such payment on
such Global Certificates
representing Book-Entry Securities
by wire transfer to the Paying Agent
or by instructing the Paying Agent
to withdraw funds from an account
maintained by the Company at the
Paying Agent. The Company will
confirm such instructions in writing
to the Paying Agent. For principal
payments at Maturity,
II-14
prior to 10:00 a.m., New York City
time, on such Maturity or as soon as
possible thereafter after receipt of
such funds from the Company, the
Paying Agent will pay by separate
wire transfer (using Fedwire message
entry instructions in a form
previously specified by the
Depository) to an account at the
Federal Reserve Bank of New York
previously specified by the
Depository, in funds available for
immediate use by the Depository,
each payment of interest, principal
and premium, if any, due on Global
Certificates representing Book-Entry
Certificates on such date; and for
interest payments, the Paying Agent
will pay the Depository in same-day
funds on the Interest Payment Date
in accordance with existing
arrangements between the Paying
Agent and the Depository. Thereafter
on each such date, the Depository
will pay, in accordance with its
SDFS operating procedures then in
effect, such amounts in funds
available for immediate use to the
respective Participants in whose
names such Book-Entry Securities are
recorded in the book-entry system
maintained by the Depository. Once
payment has been made to the
Depository, neither the Company, the
Trustee nor the Paying Agent shall
have any responsibility or liability
for the payment by the Depository of
the principal of, or premium, if
any, or interest on, the Book-Entry
Securities to such Participants.
Withholding Taxes. The amount of
any taxes required under applicable
law to be withheld from any
interest payment on a Book-Entry
Security will be determined and
withheld by the Participant, indir-
ect participant in the Depository
or other Person responsible for
II-15
forwarding payments and materials
directly to the beneficial owner of
such Book-Entry Security, or as
applicable law may otherwise
require.
Settlement Procedures: Settlement Procedures with regard
to each Book-Entry Security sold by
each Agent, as agent of the
Company, will be as follows:
A. After the acceptance of an
offer by the Company with
respect to a Book-Entry
Security, the Selling Agent or
Purchasing Agent, as the case
may be, will communicate the
following details of the terms
of such offer (the "Book-Entry
Sale Information") to the
Company by telephone confirmed
in writing or by facsimile
transmission or other
acceptable written means:
(1) Principal amount of the
Book-Entry Security to be
purchased;
(2) Identification as a Fixed
Rate Security, Floating
Rate Security or Zero
Coupon Security;
(3) If a Fixed Rate Security,
the interest rate and the
initial interest payment
date;
(4) Maturity Date;
(5) Specified Currency and,
if the Specified Currency
is other than U.S.
dollars, the applicable
Exchange Rate for such
Specified Currency and
the Exchange Rate Agent;
(6) Issue Price;
II-16
(7) Selling Agent's
commission or Purchasing
Agent's discount, as the
case may be;
(8) Net proceeds to the
Company;
(9) Settlement Date;
(10) If a redeemable Security,
such of the following as
are applicable:
(i) Redemption
Commencement
Date,
(ii) Redemption
Prices (% of
par) and
Redemption
Periods,
(iii) the Repayment
Date and the
Repayment
Price, and
(iv) Amount (% of
par) that the
Redemption
Price shall
decline (but
not below par)
on each
anniversary of
the Redemption
Commencement
Date;
(v) The Make-Whole
Premium;
(11) If a Security is to be
repaid at the option of
the Holder, the date on
or after which the
Security is to be repaid,
and additional
provisions, if any;
II-17
(12) If a Floating Rate
Security, such of the
following as are
applicable:
(i) Interest Rate
Basis,
(ii) Index Maturity,
(iii) Spread or
Spread
Multiplier,
(iv) Maximum
Interest Rate,
(v) Minimum
Interest Rate,
(vi) Initial
Interest Rate,
(vii) Interest Rate
Reset Dates,
viii) Calculation
Dates,
(ix) Interest
Determination
Dates,
(x) Interest
Payment Dates,
(xi) Regular Record
Dates, and
(xii) Calculation
Agent;
(13) If an Amortizing
Security, the
amortization provisions
formula and the
amortization schedule;
(14) If the amount of
principal payable on a
Security will be
II-18
determined by reference
to an index or formula, a
full description of such
index or formula;
(15) If an OID Note, the total
amount of OID, the Yield
to Maturity and the
initial accrual period of
OID;
(16) The taxpayer identifi-
cation number of the
purchaser; and
(17) Identification numbers of
the participant accounts
maintained by the
Depository on behalf of
such Agent.
B. Upon receiving the Book-Entry
Sale Information from the
Selling Agent or the Purchas-
ing Agent, as the case may be,
the Company will assign a
CUSIP number to the Global
Certificate representing the
Book-Entry Security and the
Company and will advise the
Issuing Agent by telephone
(confirmed by facsimile or
electronic transmission) of
the Book-Entry Sale
Information received from the
Selling Agent or the Purchas-
ing Agent, as the case may be,
and the name of such Agent.
C. The Trustee will enter through
the Depository Terminal
System, a pending deposit
message (the form of which has
been previously furnished to
the Issuing Agent by the
Depository) specifying the
following settlement
information, which information
will be communicated to the
Depository, such Agent and
Standard & Poor's Corporation:
II-19
1. Book-Entry Sale
Information (as
set forth in
Settlement
Procedure A).
2. Identification as a Fixed
Rate Security, Floating
Rate Security or Zero
Coupon Security.
3. Initial Interest Payment
Date for such Security,
number of days by which
such date succeeds the
related record date for
Depository purposes (or,
in the case of Floating
Rate Notes which reset
daily or weekly, the date
five calendar days
preceding such Initial
Interest Payment Date)
and, if then calculable,
the amount of interest
payable on such Initial
Interest Payment Date
(which amount shall have
been confirmed by the
Trustee).
4. CUSIP number of the
Global Certificate
representing such Book--
Entry Security.
5. Whether such Global
Certificate will
represent any other
Book-Entry Securities
issued or to be issued
(to the extent then
known).
6. Whether such Note is an
Amortizing Note (by an
appropriate notation in
the comments field of
DTC's Participant
Terminal System).
II-20
D. The Company will instruct the
Issuing Agent by facsimile
transmission or other
acceptable written means to
complete and authenticate such
Global Certificate, and to
register such Global
Certificate in the name of
Cede & Co., as nominee of the
Depository.
E. The Issuing Agent will
complete and authenticate the
Global Certificate
representing such Book-Entry
Security, register such Global
Certificate in the name of
Cede & Co., as nominee of the
Depository. The Trustee will
take delivery thereof as agent
for the Depository.
F. The Depository will credit
such Book-Entry Security to
the participant account of the
Issuing Agent maintained by
the Depository.
G. The Issuing Agent will enter
an SDFS deliver order through
the Depository's Participant
Terminal System instructing
the Depository (i) to debit
such Book-Entry Security to
the Issuing Agent's partici-
pant account and credit such
Book-Entry Security to the
participant account of the
Selling Agent or the Purchas-
ing Agent, as the case may be,
maintained by the Depository
and (ii) to debit the
settlement account of the
Selling Agent or the Purchas-
ing Agent, as the case may be,
and credit the settlement
account of the Issuing Agent
maintained by the Depository,
in an amount equal to the
price of such Book-Entry
Security less such Agent's
II-21
commission or discount, as
the case may be. Any entry
of such a deliver order
shall be deemed to
constitute a confirmation
by the Trustee and the
Issuing Agent to the
Depository that (i) the
Global Certificate
representing such
Book-Entry Security has
been issued and
authenticated and (ii) the
Issuing Agent is holding
such Global Certificate as
agent of the Depository
pursuant to the Certificate
Agreement.
H. The Selling Agent or the
Purchasing Agent, as the case
may be, will enter an SDFS
deliver instruction through
the Depository's Participant
Terminal System instructing
the Depository (i) to debit
such Book-Entry Security to
the participant account of
such Agent and credit such
Book-Entry Security to the
participant accounts of the
Participants with respect to
such Book-Entry Security
maintained by the Depository
and (ii) to debit the
settlement accounts of such
Participants and credit the
settlement account of such
Agent maintained by the
Depository in an amount equal
to the price of such Book--
Entry Security.
I. Transfers of funds in
accordance with SDFS
deliver orders described in
Settlement Procedures G and
H will be settled in
accordance with SDFS
operating procedures in
effect on the Settlement
Date.
J. The Issuing Agent will credit
to an account of the Company
maintained at the Issuing
II-22
Agent funds available for
immediate use in the amount
transferred to the Issuing
Agent in accordance with
Settlement Procedure G.
K. The Issuing Agent will send a
copy of the Global Certificate
by first-class mail to the
Company together with a
statement setting forth the
principal amount of Global
Certificates representing the
Book-Entry Securities Out-
standing as of the related
Settlement Date after giving
effect to such transaction and
all other offers to purchase
Securities of which the
Company has advised the
Issuing Agent but which have
not yet been settled.
L. The Selling Agent or the
Purchasing Agent, as the case
may be, will confirm the
purchase of such Book-Entry
Security to the purchaser
either by transmitting to the
Participants with respect to
such Book-Entry Security a
confirmation order through the
Depository's Participant
Terminal System or by mailing
a written confirmation to such
purchaser.
M. Notwithstanding the foregoing,
the Selling Agent shall in all
cases take the actions
described under the caption
"Delivery of Confirmation and
Prospectus to Purchaser by
Selling Agent" in Part I of
this Administrative Procedure,
at the time or times specified
under such caption for such
actions.
II-23
Settlement Procedures
Timetable: For orders of Book-Entry Securities
accepted by the Company, Settlement
Procedures "A" through "L" set
forth above shall be completed as
soon as possible but not later than
the respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the
trade date
B 12:00 Noon on the
trade date
C 2:00 p.m. on the
trade date
D 3:00 p.m. on the
Business Day before
Settlement Date
E 9:00 a.m. on
Settlement Date
F 10:00 a.m. on
Settlement Date
G-H 2:00 p.m. on
Settlement Date
I 4:45 p.m. on
Settlement Date
J-L 5:00 p.m. on
Settlement Date
If a sale is to be settled more than
one Business Day after the trade
date, Settlement Procedures A, B,
and C may, if necessary, be
completed at any time prior to the
specified times on the first
Business Day after the trade date.
In connection with a sale which is
to be settled more than one Business
Day after the trade date,
II-24
if the initial interest rate for a
Floating Rate Note is not known at
the time that Settlement Procedure A
is completed, Settlement Procedures
B and C shall be completed as soon
as such rates have been determined,
but no later than 11:00 a.m. and
2:00 p.m., New York City time,
respectively, on the second Business
Day before the Settlement Date.
Settlement Procedure I is subject to
extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the
settlement date.
If settlement of a Book-Entry
Security is rescheduled or
cancelled, the Company will as soon
as practicable give the Trustee
notice to such effect. The Trustee
will deliver to the Depository,
through the Depository's Participant
Terminal System, a cancellation
message (the form of which has been
previously furnished to the Trustee
by the Depository) to such effect by
no later than 2:00 p.m., New York
City time, on the Business Day
immediately preceding the scheduled
Settlement Date (provided the
Issuing Agent received such notice
from the Company by noon on the
business day immediately preceding
the Settlement Date) and in any case
as soon as practicable. A copy of
such message will be routed through
the facilities of the Depository to
the Selling Agent and Standard &
Poor's Corporation.
Failure to Settle: If the Issuing Agent fails to enter
in timely fashion an SDFS deliver
order with respect to any
Book-Entry Security or any portion
of a Global Certificate
representing a Book-Entry Security
pursuant to Settlement Procedure G,
or if the Selling Agent or the
II-25
Purchasing Agent, as the case may
be, fails to enter in timely fashion
an SDFS deliver order with respect
to such Book-Entry Security pursuant
to Settlement Procedure H, the
Issuing Agent may deliver to the
Depository, through the Depository's
Participant Terminal System, as soon
as practicable, a withdrawal message
(the form of which has been
previously furnished to the Issuing
Agent by the Depository) instructing
the Depository to debit such
Book-Entry Security to the
participant account of the Issuing
Agent maintained at the Depository.
A copy of such message will be
routed through the facilities of the
Depository to such Agent. The
Depository will process the
withdrawal message, provided that
such participant account contains
Book-Entry Securities having the
same Fixed Rate Terms, Floating Rate
Terms or Zero Coupon Terms, as the
case may be, having an aggregate
principal amount that is at least
equal to the principal amount to be
debited. If withdrawal messages are
processed with respect to all the
Book-Entry Securities represented by
a particular Global Certificate, the
Issuing Agent will cancel
immediately such Global Certificate,
make appropriate entries in its
records and, unless otherwise
instructed by the Company, destroy
the Global Certificate. The CUSIP
number assigned to such Global
Certificate shall, in accordance
with CUSIP Service Bureau
procedures, be retired and not
reassigned. If withdrawal messages
are processed with respect to only a
portion of the Book-Entry Securities
represented by a particular Global
Certificate, the Issuing Agent will
exchange such Global Certificate for
two Global Certificates
II-26
authenticated by the Trustee, one of
which shall represent the Book-Entry
Securities for which withdrawal
messages are processed and shall be
cancelled by the Trustee and
destroyed immediately after
issuance, and the other of which
shall represent the other Book-Entry
Securities previously represented by
the surrendered Global Certificate
and shall bear the CUSIP number of
the surrendered Global Certificate.
The Company will reimburse such
Agent on an equitable basis for its
loss of the use of funds during any
period when the funds were credited
to the account of the Company in
connection with such attempted
settlement.
If the purchase price for any
Book-Entry Security is not timely
paid to the Participants with
respect to such Security by the
beneficial purchaser thereof or by a
person, including an indirect
participant in the Depository,
acting on behalf of such purchaser
(other than the Purchasing Agent, if
any), such Participants and, in
turn, the Selling Agent or the
Purchasing Agent, as the case may
be, may enter SDFS deliver orders
through the Depository's Participant
Terminal System reversing the orders
entered pursuant to Settlement
Procedures G and H, respectively.
Immediately thereafter, the Issuing
Agent will deliver the withdrawal
message and take the related actions
described in the preceding
paragraph. The Company will
reimburse such Agent on an equitable
basis for its loss of the use of
funds during any period when the
funds were credited to the account
of the Company in connection with
such attempted settlement.
II-27
Notwithstanding the foregoing, upon
any failure to settle with respect
to any Book-Entry Security or any
portion of a Global Certificate
representing a Book-Entry Security,
the Depository may take any actions
in accordance with its SDFS
operating procedures then in effect.
In the event of a failure to settle
with respect to any Book-Entry
Security that was to have been
represented by a Global Certificate
also representing other Book-Entry
Securities, the Issuing Agent will
provide, in accordance with
Settlement Procedures D and E, for
the authentication and issuance of a
Global Certificate representing the
remaining principal amount to have
been represented by such Global
Certificate and will make
appropriate entries in its records.
Issuing and Paying
Agents Not to Risk
Funds: Nothing herein will be deemed to
require the Issuing Agent or the
Paying Agent to risk or expend its
own funds in connection with any
payment to the Company, the Agents,
the Depository or any
Securityholder, it being understood
by all parties that payments made
by the Issuing Agent or the Paying
Agent to any party will be made
only to the extent that funds are
provided to the Issuing Agent or
the Paying Agent, as the case may
be, for such purpose.
II-28
ANNEX III
Accountant's Letter
Pursuant to Section 4(k) and Section 6(e), as the case may be, of the
Distribution Agreement, the accountants shall furnish letters to the effect
that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the Agents;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements
included or incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form 10-Q
and the related published rules and regulations thereunder or are not
in conformity with generally accepted accounting principles applied on
a basis substantially consistent with the basis for the audited
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) above and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) above were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
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(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of the specified date not more than five business days
prior to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net assets or other
items specified by the Agents, or any increases in any items specified
by the Agents, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) above there were any
decreases in consolidated revenues or any material decreases in the
total or per share amounts or consolidated net income or other items
specified by the Agents, or any increases in any items specified by
the Agents, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length
specified by the Agents, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(v) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with
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respect to certain amounts, percentages and financial information specified
by the Agents, which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Agents or in
documents incorporated by reference in the Prospectus specified by the
Agents, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(e) thereof and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) as of the date of the
amendment, supplement, incorporation or the Time of Delivery relating to the
Terms Agreement requiring the delivery of such letter under Section 4(k)
thereof.
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