EXHIBIT 1.1
NIKE, INC.
$300,000,000
MEDIUM-TERM NOTES
Distribution Agreement
----------------------
April 23, 1997
Goldman, Sachs & Co.,
Lehman Brothers Inc.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Salomon Brothers Inc,
c/o Goldman, Sachs & Co.,
555 California Street, Suite 4500,
San Francisco, California 94104.
Ladies and Gentlemen:
NIKE, Inc., an Oregon corporation (the "Company"), proposes to issue and
sell from time to time its Medium-Term Notes Due Nine Months or More From Date
of Issue (the "Securities") in an aggregate initial public offering price up to
$300,000,000 (or the equivalent thereof in foreign currencies or composite
currencies) and agrees with each of you (individually, an "Agent", and
collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation on the part of
the Company to sell any Securities or an obligation of any of the Agents to
purchase Securities as principal.
The Company reserves the right to sell Securities through one or more
additional agents or directly to certain investment banking firms as
underwriters for resale to the public on terms substantially identical to the
terms contained herein. No commission will be payable to the Agents on any
Securities sold through other agents or directly by the Company to underwriters.
The Company has additionally reserved the right to sell Securities to investors
on its own behalf in those
jurisdictions where it is authorized to do so. These provisions shall not limit
Section 4(f) hereof or any similar provision included in any Terms Agreement.
The Securities will be issued under an indenture, dated as of December 13,
1996 (the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"). The Securities shall have the maturity
ranges, interest rates, if any, redemption provisions and other terms set forth
in the Prospectus referred to below as it may be amended or supplemented from
time to time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) A registration statement on Form S-3 (File No. 333-15953) (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement, as amended, and any post-effective
amendment thereto, each in the form heretofore delivered or to be delivered
to such Agent, excluding exhibits to such registration statement, but
including all documents incorporated by reference in the prospectus
included therein, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "Securities
Act"), which became effective upon filing, and other than those documents
referred to above in this Section 1(a), no other document with respect to
the Initial Registration Statement or documents incorporated by reference
therein has heretofore been filed or transmitted for filing with the
Commission (other than the prospectuses filed pursuant to Rule 424(b) of
the rules and regulations of the Commission under the Securities Act, each
in the form heretofore delivered to the Agents); and no stop order
suspending the effectiveness of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Securities Act is hereinafter
called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective but excluding the statement of eligibility of the trustee on Form
T-1, each as amended at the time such part of the registration statement
became effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; the prospectus (including, if
applicable, any prospectus supplement) relating to the Securities, in the
form in which it has most recently been filed, or transmitted for filing,
with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Securities Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus, including any supplement to the Prospectus that sets forth only
the terms of a particular issue of the Securities (a "Pricing Supplement"),
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be, as of the date of such amendment or supplement; any
reference to any
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amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as
amended or supplemented (including by the applicable Pricing Supplement
filed in accordance with Section 4(a) hereof) in relation to Securities to
be sold pursuant to this Agreement, in the form in which it is filed with
the Commission pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Securities 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 were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder;
(c) The Registration Statement and the Prospectus conform in all
material respects to the requirements of the Securities Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission thereunder; the Registration
Statement, as amended, does not 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, and the
Prospectus does not and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of circumstances under which they were made, 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 significant subsidiaries (as
such term is defined in Rule 1-02 of Regulation S-X under the Exchange Act
(each, a "Significant Subsidiary")) 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 in or contemplated by the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any decrease in the capital stock of the Company or any of its Significant
Subsidiaries (other than as required pursuant to any stock repurchase plan
that has been disclosed or incorporated by reference in the Prospectus) or
an increase in the consolidated long-term debt of the Company in excess of
$100 million (excluding Securities issued under the Medium-Term Note
Program established by this Agreement) or any material adverse change, or
any development involving a prospective material adverse change, in the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries (a "Material
Adverse Change"), otherwise than as set forth in or contemplated by the
Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation under the laws of the State of Oregon, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
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(f) The Company has an authorized capitalization as set forth or
incorporated by reference 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 issued and
delivered pursuant to this Agreement and any Terms Agreement, will have
been duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement; the Indenture has been
duly authorized 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 in all material respects to the descriptions
thereof contained in the Prospectus as amended or supplemented to relate to
such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the property or assets of the
Company is subject, (ii) result in any violation of the provisions of the
Articles of Incorporation or By-laws of the Company or (iii) result in the
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties, in each case (i) or (iii) above other than such breaches,
conflicts, violations or defaults which, individually or in the aggregate,
(x) would not have a material adverse effect on the Company and its
subsidiaries taken as a whole and (y) would not affect the validity,
performance or consummation of the transactions contemplated by this
Agreement; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the solicitation of offers to purchase Securities, the issue
and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, any Terms Agreement or the
Indenture, except (x) such as have been, or will have been prior to the
Commencement Date (as defined in Section 3 hereof), obtained under the
Securities Act and the Trust Indenture Act, (y) such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities 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 and (z) such consents,
approvals, authorizations, orders, registrations or qualifications which
(individually or in the aggregate) the failure to make, obtain or comply
with (a) would not have a material adverse effect on the Company and its
subsidiaries taken as a whole and (b) would not affect the validity,
performance or consummation of the transactions contemplated by this
Agreement, any Terms Agreement or the Indenture;
(i) The statements set forth in the Prospectus under the captions
"Description of Debt Securities" and "Description of the Notes", insofar as
they purport to constitute a summary of
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the terms of the Securities, conform in all material respects to the rights
set forth in the instruments defining the same;
(j) Neither the Company nor any of its Significant Subsidiaries is in
violation of its Certificate or Articles of Incorporation, as applicable,
or By-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
may be bound, except for such defaults that would not reasonably be
expected to result in a Material Adverse Change to the Company or such
Significant Subsidiary, as the case may be;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
Significant Subsidiaries is a party or of which any property of the Company
or any of its Significant Subsidiaries is the subject which, if determined
adversely to the Company or any of its Significant Subsidiaries, would
individually or in the aggregate reasonably be expected to result in a
Material Adverse Change to the Company and its subsidiaries taken as a
whole; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(l) The Company is not and, after giving effect to each offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(m) 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;
(n) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the rules and regulations
of the Commission thereunder;
(o) Other than as set forth in the Prospectus, the Company and its
subsidiaries own or have valid, binding, enforceable licenses or other
rights to use any patents, trademarks, trade names, service marks, service
names, copyrights, and other proprietary intellectual property rights
("Intellectual Property") necessary to conduct the business of the Company
and its subsidiaries in the manner in which it has been and is being
conducted, without any conflict with the rights of others, except for such
conflicts as do not and would not reasonably be expected to result in a
Material Adverse Change to the Company and its subsidiaries, taken as a
whole; the information contained or incorporated by reference in the
Registration Statement and Prospectus concerning patents issued to, or
patent applications filed on behalf of, the Company and its subsidiaries is
accurate in all material respects; and, except as described in the
Prospectus, neither the Company nor any of its subsidiaries has received
any notice from any other person of infringement of or conflict with (and
knows of no such infringement of or conflict with) asserted rights of
others with respect to any Intellectual Property or any trade secrets,
proprietary information, know-how, processes and procedures
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owned or used by or licensed to the Company or any of its subsidiaries,
which if determined adversely to the Company or any of its subsidiaries
would, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change to the Company and its subsidiaries, taken as
a whole; and
(p) The Medium-Term Note Program under which the Securities are
issued, as well as the Securities, are rated A1 by Moody's Investors
Service, Inc. and A+ by Standard & Poor's Ratings Service, or such other
rating as specified in the applicable Terms Agreement or that shall have
otherwise been publicly disclosed.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each
of the Agents hereby severally and not jointly agrees, as agent of the
Company, to use its reasonable efforts to solicit and receive offers to
purchase the Securities from the Company upon the terms and conditions set
forth in the Prospectus as amended or supplemented from time to time.
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 perform the
respective duties and obligations specifically provided to be performed by
each of them in the Administrative Procedure. The Company will furnish to
the Trustee a copy of the Administrative Procedure as from time to time in
effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently,
the solicitation of offers to purchase the Securities. As soon as
practicable, but in any event not later than one business day in New York
City, after receipt of notice from the Company, the Agents will suspend
solicitation of offers to purchase Securities from the Company until such
time as the Company has advised the Agents that such solicitation may be
resumed. During such period, the Company shall not be required to comply
with the provisions of Sections 4(h), 4(i), 4(j), 4(k) and 4(l), provided
that no Agent then holds any Securities purchased from the Company as
principal. Upon advising the Agents that such solicitation may be resumed,
however, the Company shall simultaneously provide the documents required to
be delivered by Sections 4(h), 4(i), 4(j), 4(k) and 4(l), and the Agents
shall have no obligation to solicit offers to purchase the Securities until
such documents have been received by the Agents. In addition, any failure
by the Company to comply with its obligations hereunder, including without
limitation its obligations to deliver the documents required by Sections
4(h), 4(i), 4(j), 4(k) and 4(l), shall automatically terminate the Agents'
obligations hereunder, including without limitation its obligations to
solicit offers to purchase the Securities hereunder as agent or to purchase
Securities hereunder as principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, which may be an amount equal to the
following applicable percentage of the principal amount of such Security
sold:
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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%
From 20 years to less than 30 years .750%
30 years and more *
* To be determined at the time of issuance.
(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 Securities as principal, whether pursuant to any Terms Agreement
or otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth; each Terms Agreement
shall specify the principal amount of Securities to be purchased by any
Agent pursuant thereto, the price to be paid to the Company for such
Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the
Securities and the time and date and place of delivery of and payment for
such Securities; and such Terms Agreement shall also specify any
requirements for opinions of counsel, accountants' letters and officers'
certificates pursuant to Section 4 hereof. Each Agent proposes to offer
Securities purchased by it as principal for sale at prevailing market
prices or prices related thereto at the time of sale, which may be equal
to, greater than or less than the price at which such Securities are
purchased by such Agent from the Company.
For each sale of Securities to an Agent as principal that is not made
pursuant to a 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.
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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 Latham & Watkins, 505 Montgomery Street, San Francisco, California
94111 at 8:00 a.m., San Francisco time, on the date of this Agreement (such time
and date being referred to herein as the "Commencement Date"), which time and
date 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.
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (other than through the filing of reports under
the Exchange Act) (A) prior to the Commencement Date which shall be
reasonably disapproved by any Agent promptly after reasonable notice
thereof or (B) after the date of any Terms Agreement or other agreement by
an Agent to purchase Securities as principal and prior to the related Time
of Delivery which shall be reasonably disapproved by any Agent party to
such Terms Agreement or so purchasing as principal promptly after
reasonable notice thereof; (ii) to prepare, with respect to any Securities
to be sold through or to such Agent pursuant to this Agreement, a Pricing
Supplement with respect to such Securities in a form previously approved by
such Agent and to file such Pricing Supplement pursuant to Rule 424(b)(3)
under the Securities Act not later than the close of business of the
Commission on the fifth business day after the date on which such Pricing
Supplement is first used; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than through the filing of
reports under the Exchange Act and other than any Pricing Supplement, at
any time prior to having afforded each Agent a reasonable opportunity to
review and comment thereon; (iv) to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Securities, and during such
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 any Pricing Supplement
that relates to Securities not purchased through or by such Agent) has been
filed with the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the initiation or,
to the best knowledge of the Company, 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 reasonable best efforts to obtain its withdrawal;
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(b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as such Agent may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution or sale of the Securities; provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is filed
with the Commission pursuant to Rule 424 under the Securities 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, 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 Securities Act, the Exchange Act or the Trust
Indenture Act, to notify such Agent and request such Agent, in its capacity
as agent of the Company, to suspend solicitation of offers to purchase
Securities from the Company (and, if so notified, such Agent shall cease
such solicitations as soon as practicable, but in any event not later than
one business day later); and if the Company shall decide to amend or
supplement the Registration Statement or the Prospectus as then amended or
supplemented, to so advise such Agent promptly by telephone (with
confirmation in writing) and to prepare and cause to be filed promptly with
the Commission an amendment or supplement to the Registration Statement or
the Prospectus as then amended or supplemented that will correct such
statement or omission or effect such compliance; provided, however, that if
during such same period such Agent continues to own Securities purchased
from the Company by such Agent as principal or such Agent is otherwise
required to deliver a prospectus in respect of transactions in the
Securities, the Company shall promptly prepare and file with the Commission
such an amendment or supplement;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earning statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities 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 such
Agent copies of all reports or other communications (financial or other)
furnished to stockholders, and deliver to such Agent (i) 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 promptly after such reports and financial statements are
so furnished or filed; 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
9
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(f) That during the period beginning from the date of any Terms
Agreement with such Agent or other agreement by such Agent to purchase
Securities as principal and continuing to and including the related Time of
Delivery or, if such Agent has notified the Company in writing prior to
such Time of Delivery that the trading restrictions for the Securities
purchased under such agreement have not terminated, such later date as such
Agent shall notify the Company in writing of the termination of such
trading restrictions, not to 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, without the prior written consent of such Agent;
(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 reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than by
a Pricing Supplement), each time a report on Form 10-K filed by the Company
under the Exchange Act is incorporated by reference into the Prospectus,
and each time the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of an opinion or opinions by Sullivan & Cromwell, counsel to the
Agents, as a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish to
such Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time
a report on Form 10-Q or a report on Form 10-K filed by the Company under
the Exchange Act is incorporated by reference into the Prospectus and each
time the Company sells Securities to such Agent as principal pursuant to a
Terms Agreement and such Terms Agreement specifies the delivery of an
opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or
cause to be furnished forthwith to such Agent a written opinion of Paul J.
Kelly, Jr., General Counsel for the Company, or other counsel for the
Company satisfactory to such Agent, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as the
case may be, in form satisfactory to such Agent, to the effect that such
Agent may rely on the opinion of such counsel referred to in Section 6(d)
hereof which was last furnished to such Agent to the same extent as though
it were dated the date of such letter authorizing reliance (except that the
statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date) or, in lieu of such opinion, an opinion of the same tenor as the
opinion of such counsel referred to in Section 6(d) hereof
10
but modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; provided, that if on the date any
such opinion is required to be delivered under this Section 4(i) an opinion
of other counsel to the Company is not required to be delivered under
Section 4(j) of this Agreement, the opinion to be delivered under this
Section 4(i) shall be of the same tenor as the opinions referred to in
Section 6(d) and in paragraphs (v) and (vi) and the paragraph of text
following paragraph (vi) of Section 6(c) hereof;
(j) That each time a report on Form 10-K filed by the Company under
the Exchange Act is incorporated by reference into the Prospectus, and each
time the Company sells Securities to such Agent as principal pursuant to a
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 a written opinion of Latham &
Watkins or other counsel for the Company satisfactory to such Agent, dated
the date of such incorporation, in form satisfactory to such Agent, to the
effect that such Agent may rely on the opinion of such counsel referred to
in Section 6(c) hereof which was last furnished to such Agent to the same
extent as though it were dated the date of such letter authorizing reliance
(except that the statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such opinion, an opinion of the
same tenor as the opinion of such counsel referred to in Section 6(c)
hereof but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a report on Form 10-Q or a
report on Form 10-K filed by the Company under the Exchange Act is
incorporated by reference into the Prospectus, in either case to set forth
financial information included in or derived from the Company's
consolidated financial statements or accounting records, and each time the
Company sells Securities to such Agent as principal pursuant to a 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 certified the financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement forthwith to furnish such Agent a letter, dated the
date of such amendment, supplement, incorporation or Time of Delivery
relating to such sale, as the case may be, 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), each time
a document filed under the Securities Act or the Exchange Act is
incorporated by reference into the Prospectus 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
11
purchase of Securities pursuant to such Terms Agreement, the Company shall
furnish or cause to be furnished forthwith to such Agent a certificate,
dated the date of such supplement, amendment, incorporation or Time of
Delivery relating to such sale, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such
Agent, to the effect that the statements contained in the certificates
referred to in Section 6(j) hereof which was 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(j) 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 Securities Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus, the Prospectus and any Pricing Supplements and all other
amendments and supplements thereto and the mailing and delivering of copies
thereof to such Agent; (ii) the fees, disbursements and expenses of counsel for
the Agents in connection with the establishment of the program contemplated
hereby, any opinions to be rendered by such counsel hereunder and under any
Terms Agreement and the transactions contemplated hereunder and under any Terms
Agreement; (iii) the cost of printing, producing or reproducing this Agreement,
any Terms Agreement, the Indenture, any Blue Sky survey, closing documents 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 any reasonable fees and disbursements in
connection with such qualification and in connection with any Blue Sky surveys;
(v) any fees charged by securities rating services for rating the Securities;
(vi) the cost of preparing the Securities; (vii) the fees and expenses of any
Trustee and any agent of any 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; (viii) any advertising
expenses connected with the solicitation of offers to purchase and the sale of
Securities so long as such advertising expenses have been approved in writing by
the Company; and (ix) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section. Except as provided in Sections 7 and 8 hereof, each Agent shall
pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities, 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
sold through an Agent, as Agent, to purchase and pay for Securities as a result
of any such accepted offer shall in each case be subject to the condition that
all representations and warranties and other statements of the Company herein
(and, in the case of an obligation of an Agent under a Terms Agreement, in or
incorporated by reference in such Terms Agreement) are true and correct at and
as of the Commencement Date and any applicable date referred to in Section 4(l)
hereof that is prior to such Solicitation Time or Time of Delivery, as the case
may be, and at and as of such Solicitation Time or Time of Delivery, as the case
may be, the condition that prior to such Solicitation Time or Time of Delivery,
as the case may be, the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the Pricing Supplement) with respect
to such Securities shall have been filed with the Commission
12
pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Securities Act within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act and in
accordance with Section 4(a) hereof; (ii) no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or to the best of the
Company's knowledge threatened by the Commission; and (iii) all requests
for additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of such Agent;
(b) Sullivan & Cromwell, counsel to the Agents, shall have furnished
to such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to the incorporation of the Company, the Indenture, the
Securities, the Registration Statement, the Prospectus as amended or
supplemented and such 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) Latham & Watkins, counsel for the Company, shall have furnished
to such Agent their written opinion, 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 is the legally valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms.
(ii) The Securities, in the forms certified by the Company as
of the date of such opinion, when duly completed, executed and issued
by the Company in accordance with the terms of the Indenture and the
officers' certificate establishing the terms of such Securities and
authenticated and delivered by the Trustee in accordance with the
terms of the Indenture and this Agreement against payment of the
consideration therefor, will be legally valid and binding obligations
of the Company, enforceable against the Company in accordance with
their terms.
(iii) The Indenture has been duly qualified under the Trust
Indenture Act.
(iv) The issuance and sale of the Securities by the Company
pursuant to this Agreement will not result in the violation by the
Company of any federal or New York statute, rule or regulation known
to such counsel to be applicable to the Company (other than federal or
New York securities laws).
(v) The Registration Statement and the Prospectus (excluding
the documents incorporated by reference therein) comply as to form in
all material respects with the requirements for registration
statements on Form S-3 under the Securities Act, the Trust Indenture
Act and the respective rules and regulations of the Commission
thereunder; it being understood, however, that such counsel need
express no opinion with respect
13
to the financial statements, schedules and other financial data
included or incorporated by reference in the Registration Statement or
the Prospectus or with respect to the Form T-1. In passing upon the
compliance as to form of the Registration Statement and the
Prospectus, such counsel may assume that the statements made and
incorporated by reference therein are correct and complete.
(vi) The statements set forth in the Prospectus under the
headings "Description of Debt Securities" and "Description of the
Notes", insofar as such statements constitute a summary of legal
matters, are accurate in all material respects.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
and your representatives, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and,
although such counsel did not participate in the preparation of the
documents incorporated by reference into the Prospectus (the
"Incorporated Documents"), and need not pass upon, and need not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus,
except for those referred to in the opinion in subsection (vi) of this
Section 6(c), and need not have made any independent check or
verification thereof, during the course of such participation (relying
as to materiality to the extent such counsel deemed appropriate upon
the statements of officers and other representatives of the Company),
no facts came to such counsel's attention that caused such counsel to
believe that the Registration Statement, at the time it became
effective, 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 the Prospectus, as
of its date and as of the date of such opinion contained or contains
an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; it
being understood that such counsel need express no belief with respect
to the financial statements, schedules and other financial data
included in the Registration Statement or the Prospectus or
incorporated therein or with respect to the Form T-1.
Such counsel shall also be permitted to state that the opinions
rendered in paragraphs (i) and (ii) relating to the enforceability of
the Securities and the Indenture are subject to the following
exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors; (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or
law, and the discretion of the court before which any proceeding
therefor may be brought; (iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for
the indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to
public policy; (iv) such counsel need express no opinion concerning
the enforceability of the waiver of rights or defenses contained in
Section 4.4 of the Indenture; and (v) such counsel need express no
opinion with respect to whether acceleration of the Securities may
affect the collectibility of that portion of the stated principal
amount thereof which might be determined to constitute unearned
interest thereon. Further, the enforcement of the Securities and the
Indenture may be limited by (a) requirements that a claim with respect
to any Securities denominated other than in United States dollars (or
a foreign currency or composite currency judgment in respect of such
claim) be converted into United States
14
dollars at a rate of exchange prevailing on the date determined
pursuant to applicable law or (b) governmental authority to limit,
delay or prohibit the making of payments in foreign currencies or
currency units outside of the United States.
Such counsel shall also be permitted to state that such counsel has
assumed for purposes of the opinion that (i) the Company has been duly
incorporated and is validly existing as a corporation under the laws of the
State of Oregon, and has the corporate power and authority to consummate
the transactions contemplated hereunder; (ii) the Securities have been duly
authorized by all necessary corporate action by the Company; (iii) the
Indenture has been duly authorized by all necessary corporate action by the
Company and has been duly executed and delivered by the Company; (iv) the
Trustee is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization; (v) the Trustee is duly qualified
to engage in the activities contemplated by the Indenture; (vi) the
Indenture has been duly authorized, executed and delivered by the Trustee
and constitutes the legally valid, binding and enforceable obligation of
the Trustee enforceable against the Trustee in accordance with its terms;
(vii) the Trustee is in compliance, generally and with respect to acting as
a trustee under the Indenture, with all applicable laws and regulations;
(viii) the Trustee has the requisite organizational and legal power and
authority to perform its obligations under the Indenture; and (ix) the
aggregate principal amount of Securities that may be validly issued will be
reduced dollar for dollar for any other debt securities issued and sold
under the Registration Statement after the date hereof.
(d) Paul J. Kelly, Jr., General Counsel to the Company, shall have
furnished to the Representatives his written opinion, dated the
Commencement Date and each applicable date referred to in Section 4(i)
hereof that is on or prior to such Solicitation Time or Time of Delivery,
as the case may be, in form and substance satisfactory to such Agent, to
the effect that:
(i) The Company has been duly incorporated and is validly
existing under the laws of the State of Oregon, with corporate power
and authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the
Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented;
(iii) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened to which the
Company is a party or of which any property of the Company is the
subject, required to be described in the Prospectus, which are not
described as required;
(iv) This Agreement and the Indenture have been duly
authorized, executed and delivered by the Company;
(v) The Securities, in the forms certified by the Company, as
of the date of such opinion, have been duly authorized by the Company,
provided, however, that such counsel may assume that the aggregate
principal amount of Securities that may be validly issued will be
reduced dollar for dollar for any other debt securities issued and
sold under the Registration Statement after the date hereof;
(vi) The issuance and sale of the Securities by the Company
pursuant to this Agreement in the forms certified by the Company as of
the date of such opinion and the performance by the Company of its
obligations under the Securities in such forms and the Indenture will
not result in the violation by the Company of its Articles of
Incorporation or Bylaws or any federal or Oregon statute, rule or
regulation (other than federal or state
15
securities laws) known to such counsel to be applicable to the Company
or any order known to such counsel of any court or governmental agency
or body or in the breach of or a default under any material indenture,
note, loan, agreement, mortgage, deed of trust or other written
agreement creating, evidencing or securing indebtedness of the Company
for borrowed money or any material lease to which the Company is a
party, other than any such violations, breaches or defaults which
would not have a material adverse effect on the Company and its
subsidiaries taken as a whole and would not adversely affect the
validity of the Securities.
(vii) To the best of such counsel's knowledge, no consent,
approval, authorization or order of, or filing with, any Oregon court
or governmental agency or body is required for the solicitation of
offers to purchase Securities or the consummation of the issuance and
sale of the Securities by the Company pursuant to this Agreement and
the performance by the Company of its obligations under the Securities
and the Indenture, except such as may be required under state
securities 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.
(viii) The Company is not an "investment company", as such term
is defined in the Investment Company Act.
(ix) The Incorporated Documents, when they were filed with the
Commission, appeared on their face to comply as to form in all
material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder; it being
understood, however, that such counsel need not express any opinion
with respect to the financial statements, schedules and other
financial data included or incorporated by reference in the
Incorporated Documents. In passing upon the compliance as to form of
the Incorporated Documents, such counsel may assume that the
statements made and incorporated by reference therein are correct and
complete.
No facts came to the attention of such counsel that caused such
counsel to believe that any of the Incorporated Documents, when they
were so filed, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when the Incorporated Documents were so filed, not
misleading; it being understood that such counsel need express no
opinion with respect to the financial statements, schedules and other
financial data included or incorporated by reference in the
Incorporated Documents.
(x) To the best of such counsel's knowledge, there are no
contracts or documents of a character required to be described in the
Registration Statement or Prospectus (or required to be filed under
the Exchange Act, if upon such filing they would be incorporated by
reference therein) or to be filed as exhibits to the Registration
Statement that are not described and filed as required.
(e) Not later than 8:00 a.m., San Francisco 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 certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have
furnished to such Agent a letter, dated the Commencement Date or such
applicable date, as the case may be, in form and substance satisfactory to
such Agent, to the effect set forth in Annex III hereto;
16
(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 prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Settlement Date or Time of
Delivery any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Settlement Date or Time of
Delivery and (ii) since the respective dates as of which information is
given in the Prospectus as amended or supplemented prior to the date of the
Pricing Supplement relating to the Securities to be delivered at the
relevant Settlement Date or Time of Delivery there shall not have been any
decrease in the capital stock of the Company or any of its Significant
Subsidiaries (other than as required pursuant to any stock repurchase plan
that has been disclosed or incorporated by reference in the Prospectus) or
an increase in the consolidated long-term debt of the Company in excess of
$100 million (excluding Securities issued under the Medium-Term Note
Program established by this Agreement) or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
in or contemplated by the Prospectus as amended or supplemented prior to
the date of the Pricing Supplement relating to the Securities to be
delivered at the relevant Settlement Date or Time of Delivery, as the case
may be, the effect of which, in any such case described in Clause (i) or
(ii), is in the judgment of such Agent so material and adverse as to make
it impracticable or inadvisable to proceed with the solicitation by such
Agent of offers to purchase Securities from the Company or the purchase by
such Agent of Securities from the Company as principal, as the case may be,
on the terms and in the manner contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Settlement Date or Time of
Delivery;
(g) On or after the date hereof (i) no downgrading shall have
occurred 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
Securities Act, and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by any Federal, New York State or Oregon State authorities; or
(iv) the outbreak or escalation of hostilities involving the United States
or the declaration by the United States of a national emergency or war, if
the effect of any such event specified in this Clause (iv) in the judgment
of such Agent makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase Securities or the purchase of the
Securities from the Company as principal pursuant to the applicable Terms
Agreement or otherwise, as the case may be, on the terms and in the manner
contemplated in the Prospectus;
(i) With respect to any Security denominated in a currency other than
the U.S. dollar, more than one currency or a composite currency or any
Security the principal or interest of which is indexed to such currency,
currencies or composite currency, there shall not have occurred a
suspension or material limitation in foreign exchange trading in such
currency,
17
currencies or composite currency by a major international bank, a general
moratorium on commercial banking activities in the country or countries
issuing such currency, currencies or composite currency, the outbreak or
escalation of hostilities involving, the occurrence of any material adverse
change in the existing financial, political or economic conditions of, or
the declaration of war or a national emergency by, the country or countries
issuing such currency, currencies or composite currency or the imposition
or proposal of exchange controls by any governmental authority in the
country or countries issuing such currency, currencies or composite
currency; and
(j) 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 Securities 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 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 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 in the Prospectus as amended or supplemented relating to such
Securities; and provided, further, that the Company shall not be liable to
any Agent under the indemnity agreement in this subsection (a) with respect
to any Preliminary Prospectus to the extent that any such loss, claim,
damage or liability of such Agent results from the fact that such Agent
sold Securities to a person as to whom it shall be established that 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 Securities Act if the Company has previously furnished
copies thereof in sufficient quantity 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 identified in writing prior to the date of the applicable Terms
Agreement to such Agent and corrected in the Prospectus (excluding
documents incorporated by reference) or in the Prospectus as then amended
or supplemented (excluding documents incorporated by
18
reference) and such correction would have cured such untrue statement or
omission of a material fact giving rise to such loss, claim, damage or
liability.
(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 Securities 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 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 as amended or
supplemented or any other prospectus relating to the Securities, or any
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by such Agent expressly for
use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
19
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 Securities (before
deducting expenses) received by the Company bear to the total commissions
or discounts received by such Agent in respect thereof. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading relates to
information supplied by the Company on the one hand or by any Agent on the
other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Company and each Agent agree that it 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 Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The obligations of each of the
Agents under this subsection (d) to contribute are several in proportion to
the respective purchases made by or through it to which such loss, claim,
damage or liability (or action in respect thereof) relates and are not
joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Agent within the meaning of the Securities 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
Securities Act.
8. (a) 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 performance by each purchaser whose offer
to purchase Securities from the Company was solicited by such Agent and has
been accepted
20
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.
(b) If the Company shall default on its obligation to deliver
Securities to a purchaser whose offer has been solicited by an Agent on an
agency basis and accepted by the Company, the Company shall (i) hold such
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 such Agent 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 such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 9 and 10
hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Facsimile Transmission No. (212) 363-7609,
Attention: Credit Department, if to Lehman Brothers Inc. shall be sufficient in
all respects when delivered or sent by facsimile transmission or registered mail
to 3 World Financial Center, 12th Floor, New York, New York 10285-1200,
Facsimile Transmission No. (212) 528-1718, Attention: Medium-Term Note
Department, if to Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to World Financial Center, North Tower, New York, New York
10281, Facsimile Transmission No. (212) 449-2234, Attention: Product
Management - MTN, if to Salomon Brothers Inc shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered mail to
Seven World Trade Center, New York, New York 10048, Facsimile Transmission No.
(212) 783-2274, Attention: Martha Bailey, and if to the Company shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to One Bowerman Drive, Beaverton, Oregon 97005, Facsimile
Transmission No. (503) 671-6300, Attention: Chief Financial Officer, with a copy
to Gregory K. Miller, Latham & Watkins, 505 Montgomery Street, Suite 1900, San
Francisco, California 94111 (which copy shall not constitute notice).
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 Sections 7, 8 and 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
21
purchaser of any of the Securities through or from any Agent hereunder shall be
deemed a successor or assign by reason merely of such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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 an original, but all of such respective counterparts shall
together constitute one and the same instrument.
22
If the foregoing is in accordance with your understanding, please sign and
return to us seven 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,
NIKE, Inc.
By:................................
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
................................
(Goldman, Sachs & Co.)
Lehman Brothers Inc.
By: .........................
Name:
Title:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: .........................
Name:
Title:
Salomon Brothers Inc
By: .........................
Name:
Title:
23
ANNEX I
NIKE, INC.
[TITLE OF SECURITY]
TERMS AGREEMENT
---------------
.............., 19..
[GOLDMAN, SACHS & CO.,
555 CALIFORNIA STREET, SUITE 4500,
SAN FRANCISCO, CALIFORNIA 94104.]
[LEHMAN BROTHERS INC.,
WORLD FINANCIAL CENTER,
200 VESEY STREET,
NEW YORK, NEW YORK 10235]
[MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
101 CALIFORNIA STREET, SUITE 1200,
SAN FRANCISCO, CALIFORNIA 94111]
[SALOMON BROTHERS INC,
SEVEN WORLD TRADE CENTER,
NEW YORK, NEW YORK 10048]
Ladies and Gentlemen:
NIKE, Inc. (the "Company") proposes, subject to the terms and conditions
stated herein and in the Distribution Agreement, dated April 23, 1997 (the
"Distribution Agreement"), between the Company on the one hand and Goldman,
Sachs & Co., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc (the "Agents") on the other, to issue and
sell to [GOLDMAN, SACHS & CO.] [LEHMAN BROTHERS INC.] [MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED] [SALOMON BROTHERS INC] the securities specified in
the Schedule hereto (the "Purchased Securities"). Each of the provisions of the
Distribution Agreement not specifically related to the solicitation by the
Agents, as agents of the Company, of offers to purchase Securities is
incorporated herein by reference in its entirety, and shall be deemed to be part
of this Terms Agreement to the same extent as if such provisions had been set
forth in full herein. Nothing contained herein or in the Distribution Agreement
shall make any party hereto an agent of the Company or make such party subject
to the provisions therein relating to the solicitation of offers to purchase
Securities from the Company, solely by virtue of its execution of this Terms
Agreement. Each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Terms Agreement,
except that each representation and warranty in Section 1 of the Distribution
Agreement which makes reference to the Prospectus shall be deemed to be a
I-1
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.] [LEHMAN BROTHERS INC.] [MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED] [SALOMON BROTHERS INC] and [GOLDMAN, SACHS
& CO.] [LEHMAN BROTHERS INC.] [MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED] [SALOMON BROTHERS INC] agree[S] [,SEVERALLY AND NOT JOINTLY,] 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.
I-2
If the foregoing is in accordance with your understanding, please sign and
return to us [seven] 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.
NIKE, Inc.
By: ...............................
Name:
Title:
Accepted:
[............................
(GOLDMAN, SACHS & CO.)]
[LEHMAN BROTHERS INC.
BY: .........................
NAME:
TITLE: ]
[MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BY: .........................
NAME:
TITLE: ]
[SALOMON BROTHERS INC
BY: .........................
NAME:
TITLE: ]
I-3
SCHEDULE TO ANNEX I
Title of Purchased Securities:
[ %] Medium-Term Notes[, SERIES ....]
PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE: [INTEREST RATE ____%] STATED MATURITY DATE:
INTEREST PAYMENT DATE(S) DEFAULT RATE: % RECORD DATE(S):
[_] March 1 and September 1 [_] February 15 and August
15
[_] Other: [_] Other:
REDEMPTION COMMENCEMENT INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE
REDUCTION: %
OPTIONAL REPAYMENT [_] CHECK IF AN ORIGINAL
DATE(S): ISSUE DISCOUNT NOTE
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION: EXCHANGE RATE
[_] United States dollars [_] $1,000 and integral AGENT (if other than The
First [_] Other: multiples thereof National Bank of Chicago):
[_] Other:
ADDENDUM ATTACHED OTHER/ADDITIONAL PROVISIONS:
[_] Yes
[_] No
MINIMUM INTEREST RATE: MAXIMUM INTEREST RATE: INITIAL INTEREST RESET
DATE:
INTEREST RESET PERIOD: INTEREST DETERMINATION DATE: INITIAL INTEREST RATE:
INTEREST RESET DATE(S):
SPREAD (plus or minus): SPREAD MULTIPLIER: CALCULATION AGENT (if
other than The First
National Bank of
Chicago):
INTEREST CATEGORY: DAY COUNT CONVENTION:
[_] Regular Floating Rate Note [_] Actual/360 for the period
[_] Floating Rate/Fixed Rate Note from to
Fixed Rate Commencement Date: [_] Actual/Actual for the period
Fixed Interest Rate: % from to
[_] Inverse Floating Rate Note [_] 30/360 for the period
Fixed Interest Rate: % from to
I-4
INTEREST RATE BASIS OR BASES:
[_] CD Rate
[_] Prime Rate
[_] Federal Funds Rate
[_] Commercial Paper Rate
[_] LIBOR:
Designated LIBOR Page
[_] Reuters Page:
[_] Telerate Page:
Index Currency:
[_] Treasury Rate
[_] CMT Rate
[_] Designated CMT Telerate Page:
[_] Designated CMT Maturity Index:
[_] Other: ]
Method of and Specified Funds for Payment of Purchase Price:
By wire transfer to a bank account specified by the Company in immediately
available funds
Time of Delivery:
Closing Location for Delivery of Securities:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) THE OPINION OR OPINIONS OF COUNSEL TO THE AGENTS REFERRED TO IN
SECTION 4(h).]
[(2) THE OPINION OF COUNSEL TO THE COMPANY REFERRED TO IN SECTION 4(i).]
[(3) THE OPINION OF COUNSEL TO THE COMPANY REFERRED TO IN SECTION 4(j).]
[(4) THE ACCOUNTANTS' LETTER REFERRED TO IN SECTION 4(k).]
[(5) THE OFFICERS' CERTIFICATE REFERRED TO IN SECTION 4(l).]
Other Provisions (including Syndicate Provisions, if applicable):
[INSERT IF MULTIPLE AGENTS -- [1.] (a) IF ANY AGENT SHALL DEFAULT IN
ITS OBLIGATION TO PURCHASE THE SECURITIES WHICH IT HAS AGREED TO PURCHASE
PURSUANT TO THIS TERMS AGREEMENT, THE OTHER AGENTS PARTIES HERETO MAY IN
THEIR DISCRETION ARRANGE FOR THEMSELVES OR ANOTHER PARTY OR OTHER PARTIES
TO PURCHASE SUCH SECURITIES ON THE TERMS CONTAINED HEREIN AND IN THIS TERMS
AGREEMENT. IF WITHIN THIRTY-SIX HOURS AFTER SUCH DEFAULT BY ANY AGENT SUCH
OTHER AGENTS DO NOT ARRANGE FOR THE PURCHASE OF SUCH SECURITIES, THEN THE
COMPANY SHALL BE ENTITLED TO A FURTHER PERIOD OF THIRTY-SIX HOURS WITHIN
WHICH TO PROCURE ANOTHER PARTY OR OTHER PARTIES SATISFACTORY TO SUCH AGENTS
TO PURCHASE SUCH SECURITIES ON SUCH TERMS. IN THE EVENT THAT, WITHIN THE
RESPECTIVE PRESCRIBED PERIOD, SUCH AGENTS NOTIFY THE COMPANY THAT THEY HAVE
SO ARRANGED FOR THE PURCHASE OF SUCH SECURITIES, OR THE COMPANY NOTIFIES
SUCH AGENTS THAT IT HAS SO ARRANGED FOR THE PURCHASE OF SUCH SECURITIES,
THE AGENTS OR THE COMPANY SHALL HAVE THE RIGHT TO POSTPONE THE TIME OF
DELIVERY FOR SUCH SECURITIES FOR A PERIOD OF NOT MORE THAN SEVEN DAYS, IN
ORDER TO EFFECT WHATEVER CHANGES MAY THEREBY BE MADE NECESSARY IN THE
REGISTRATION STATEMENT OR THE PROSPECTUS AS AMENDED OR SUPPLEMENTED, OR IN
ANY OTHER DOCUMENTS OR ARRANGEMENTS, AND THE COMPANY AGREES TO FILE
PROMPTLY ANY AMENDMENTS OR SUPPLEMENTS TO THE
I-5
REGISTRATION STATEMENT OR THE PROSPECTUS WHICH IN THE OPINION OF THE AGENTS
MAY THEREBY BE MADE NECESSARY. THE TERM "AGENT" AS USED IN THIS TERMS
AGREEMENT SHALL INCLUDE ANY PERSON SUBSTITUTED UNDER THIS SECTION WITH LIKE
EFFECT AS IF SUCH PERSON HAD ORIGINALLY BEEN A PARTY TO THIS TERMS
AGREEMENT.
(b) IF, AFTER GIVING EFFECT TO ANY ARRANGEMENTS FOR THE PURCHASE OF
THE SECURITIES OF A DEFAULTING AGENT OR AGENTS AS PROVIDED IN SUBSECTION
(a) ABOVE, THE AGGREGATE PRINCIPAL AMOUNT OF SUCH SECURITIES WHICH REMAINS
UNPURCHASED DOES NOT EXCEED ONE-ELEVENTH OF THE AGGREGATE PRINCIPAL AMOUNT
OF THE PURCHASED SECURITIES, THEN THE COMPANY SHALL HAVE THE RIGHT TO
REQUIRE EACH NON-DEFAULTING AGENT, IF ANY, TO PURCHASE THE PRINCIPAL AMOUNT
OF SECURITIES WHICH SUCH AGENT AGREED TO PURCHASE UNDER THIS TERMS
AGREEMENT AND, IN ADDITION, TO REQUIRE EACH NON-DEFAULTING AGENT HEREUNDER
TO PURCHASE ITS PRO RATA SHARE (BASED ON THE PRINCIPAL AMOUNT OF PURCHASED
SECURITIES WHICH SUCH AGENT AGREED TO PURCHASE UNDER THIS TERMS AGREEMENT)
OF THE PURCHASED SECURITIES OF SUCH DEFAULTING AGENT OR AGENTS FOR WHICH
SUCH ARRANGEMENTS HAVE NOT BEEN MADE; BUT NOTHING HEREIN SHALL RELIEVE A
DEFAULTING AGENT FROM LIABILITY FOR ITS DEFAULT.
(c) IF, AFTER GIVING EFFECT TO ANY ARRANGEMENTS FOR THE PURCHASE OF
THE SECURITIES OF A DEFAULTING AGENT OR AGENTS AS PROVIDED IN SUBSECTION
(a) ABOVE, THE AGGREGATE PRINCIPAL AMOUNT OF PURCHASED SECURITIES WHICH
REMAINS UNPURCHASED EXCEEDS ONE-ELEVENTH OF THE AGGREGATE PRINCIPAL AMOUNT
OF SUCH PURCHASED SECURITIES, AS REFERRED TO IN SUBSECTION (b) ABOVE, OR IF
THE COMPANY SHALL NOT EXERCISE THE RIGHT DESCRIBED IN SUBSECTION (b) ABOVE
TO REQUIRE NON-DEFAULTING AGENTS TO PURCHASE SECURITIES OF A DEFAULTING
AGENT OR AGENTS, THEN THIS TERMS AGREEMENT SHALL THEREUPON TERMINATE,
WITHOUT LIABILITY ON THE PART OF ANY NON-DEFAULTING AGENT OR THE COMPANY,
EXCEPT FOR THE EXPENSES TO BE BORNE BY THE COMPANY AND THE AGENTS AS
PROVIDED IN SECTION 5 OF THE DISTRIBUTION AGREEMENT AND THE INDEMNITY AND
CONTRIBUTION AGREEMENTS IN SECTION 7 THEREOF; BUT NOTHING HEREIN SHALL
RELIEVE A DEFAULTING AGENT FROM LIABILITY FOR ITS DEFAULT.]
I-6
ANNEX II
NIKE, INC.
ADMINISTRATIVE PROCEDURE
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated April 23, 1997 (the "Distribution Agreement"),
between NIKE, Inc. (the "Company") and Goldman, Sachs & Co., Lehman Brothers
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Brothers
Inc (together, the "Agents"), to which this Administrative Procedure is attached
as Annex II. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented or the Indenture.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the Administrative
Procedure set forth in Part I hereof, and Certificated Securities will be issued
in accordance with the Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- ------------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, and a Medium-
Term Note Certificate Agreement between the Trustee and the Depositary (the
"Certificate Agreement"), and its obligations as a participant in the
Depositary, including the Depositary's Same-Day Funds Settlement System
("SDFS").
II-1
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the case
may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) Original Issue Date;
(3) If a Fixed Rate Book-Entry Security, the interest rate;
(4) Stated Maturity;
(5) Interest Payment Date(s);
(6) Default Rate;
(7) Record Date(s);
(8) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Percentage, and
(iii) Annual Redemption Percentage Reduction;
(9) Optional Repayment Dates, if any;
(10) If such Securities are to be issued as Original Issue Discount
Securities, the Issue Price;
(11) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the Exchange Rate Agent (it being understood that
currently the Depositary accepts deposits of Global Securities
denominated in U.S. dollars only);
(12) Authorized Denominations;
II-2
(13) If a Floating Rate Book-Entry Security, such of the following as
are applicable:
(i) Minimum Interest Rate,
(ii) Maximum Interest Rate,
(iii) Initial Interest Reset Date,
(iv) Interest Reset Period,
(v) Interest Determination Date,
(vi) Interest Reset Date(s),
(vii) Initial Interest Rate,
(viii) Spread and/or Spread Multiplier,
(ix) Calculation Agent,
(x) Interest Category, indicating whether such Securities are:
(a) Regular Floating Rate Securities,
(b) Floating Rate/Fixed Rate Securities (in which case
the Fixed Rate Commencement Date and the Fixed
Interest Rate shall be specified, or
(c) Inverse Floating Rate Securities (in which case the
Fixed Interest Rate shall be specified);
(xi) Day Count Convention, indicating one of the following
(including the applicable period):
(a) Actual/360,
(b) Actual/Actual, or
(c) 30/360;
(xii) Interest Rate Basis or Bases, which may include:
(a) CD Rate,
(b) Prime Rate,
(c) Federal Funds Rate,
(d) Commercial Paper Rate,
(e) LIBOR, in which case either Reuters Page or Telerate
Page shall be indicated, as well as the Index
Currency,
(f) Treasury Rate,
(g) CMT Rate, in which case the Designated CMT Telerate
Page or the Designated CMT Maturity Index shall be
indicated, or
(h) Other;
(14) Name, address and taxpayer identification number of the
registered owner(s);
(15) Denomination of certificates to be delivered at settlement;
(16) Selling Agent or Purchasing Agent.
(17) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
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(18) Net Proceeds to the Company.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously delivered to the Trustee by the Company
representing such Book-Entry Security and then advise the Company and the
Selling Agent or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
(14) The applicable Sale Information;
(15) CUSIP number of the Global Security representing such Book-Entry
Security;
(16) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(17) Number of the participant account maintained by the Depositary
on behalf of the Selling Agent or Purchasing Agent, as the case
may be;
(18) The interest payment period; and
(19) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for
the Depositary's purposes (which in the case of Floating Rate
Securities which reset weekly shall be the date five calendar
days immediately preceding the applicable Interest Payment Date
and in the case of all other Book-Entry Securities shall be the
Regular Record Date, as defined in the Security) and, if
calculable at that time, the amount of interest payable on such
Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such Book-
Entry Security to the Trustee's participant account and credit such Book-Entry
Security to such Agent's participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Book-Entry Security less such Agent's commission.
The entry of such a deliver order shall constitute a representation and warranty
by the Trustee to the Depositary that (a) the Global Security representing such
Book-Entry Security has been issued and authenticated and (b) the Trustee is
holding such Global Security pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such Book-
Entry Security to such Agent's participant account and credit such Book-Entry
Security to the participant accounts of the Participants with respect to such
Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
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H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
such account as the Company may have previously specified to the Trustee, funds
available for immediate use in the amount transferred to the Trustee in
accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it will
prepare a Pricing Supplement reflecting the terms of such Book-Entry Security
and arrange to have delivered to the Selling Agent or Purchasing Agent, as the
case may be, at least ten copies of such Pricing Supplement, not later than
10:00 a.m., New York City time, on the Business Day following the Trade Date (as
defined below), or if the Company and the purchaser agree to settlement on the
Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have the
Pricing Supplement filed with the Commission not later than the close of
business of the Commission on the fifth Business Day following the date on which
such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment for a
Book-Entry Security and the authentication and issuance of the Global Security
representing such Book-Entry Security shall constitute "settlement" with respect
to such Book-Entry Security. All orders of Book-Entry Securities solicited by a
Selling Agent or made by a Purchasing Agent and accepted by the Company on a
particular date (the "Trade Date") will be settled on a date (the "Settlement
Date") which is the third Business Day after the Trade Date pursuant to the
"Settlement Procedure Timetable" set forth below, unless the Company and the
purchaser agree to settlement on another Business Day which shall be no earlier
than the next Business Day after the Trade Date.
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Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE TIME
- ---------- ----
A 10:00 a.m. on the Business Day following the Trade Date
B 12:00 noon on the second Business Day immediately preceding
the Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding
the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a Book-
Entry Security pursuant to Settlement Procedure "F", the Trustee may deliver to
the Depositary, through the Depositary's Participant Terminal System, as soon as
practicable a withdrawal message instructing the Depositary to debit such Book-
Entry Security to the Trustee's participant account, provided that the Trustee's
participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent
II-6
the remaining Book-Entry Securities previously represented by the surrendered
Global Security and shall bear the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry Security is not timely paid to the
participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall
have occurred for any reason other than default by the applicable Agent to
perform its obligations hereunder or under the Distribution Agreement, the
Company will reimburse such Agent on an equitable basis for the loss of its use
of funds during the period when the funds were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Security, the Depositary may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Securities to have
been represented by a Global Security, the Trustee will provide, in accordance
with Settlement Procedure "D", for the authentication and issuance of a Global
Security representing the other Book-Entry Securities to have been represented
by such Global Security and will make appropriate entries in its records. The
Company will, from time to time, furnish the Trustee with a sufficient quantity
of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
- --------------------------------------------------------------
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an
offer to purchase Certificated Securities. If the Company accepts an
offer to purchase Certificated Securities, it will confirm such
acceptance in writing to the Selling Agent or Purchasing Agent, as the case may
be, and the Trustee.
II-7
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(20) Principal Amount of Certificated Securities to be purchased;
(21) Original Issue Date;
(22) If a Fixed Rate Certificated Security, the interest rate;
(23) Stated Maturity;
(24) Interest Payment Date(s);
(25) Default Rate;
(26) Record Date(s);
(27) If a redeemable Certificated Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Percentage, and
(iii) Annual Redemption Percentage Reduction;
(28) Optional Repayment Dates, if any;
(29) If such Securities are to be issued as Original Issue Discount
Securities, the Issue Price;
(30) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the Exchange Rate Agent (it being understood that currently
the Depositary accepts deposits of Global Securities denominated in
U.S. dollars only);
(31) Authorized Denominations;
(32) If a Floating Rate Certificated Security, such of the following as are
applicable:
(i) Minimum Interest Rate,
(ii) Maximum Interest Rate,
(iii) Initial Interest Reset Date,
(iv) Interest Reset Period,
(v) Interest Determination Date,
(vi) Interest Reset Date(s),
(vii) Initial Interest Rate,
(viii) Spread and/or Spread Multiplier,
(ix) Calculation Agent,
(x) Interest Category, indicating whether such Securities are:
(a) Regular Floating Rate Securities,
(b) Floating Rate/Fixed Rate Securities (in which case the
Fixed Rate Commencement Date and the Fixed Interest Rate
shall be specified) or
II-8
(c) Inverse Floating Rate Securities (in which case the Fixed
Interest Rate shall be specified);
(xi) Day Count Convention, indicating one of the following
(including the applicable period):
(a) Actual/360,
(b) Actual/Actual, or
(c) 30/360;
(xii) Interest Rate Basis or Bases, which may include:
(a) CD Rate,
(b) Prime Rate,
(c) Federal Funds Rate,
(d) Commercial Paper Rate,
(e) LIBOR, in which case either Reuters Page or Telerate Page
shall be indicated, as well as the Index Currency,
(f) Treasury Rate,
(g) CMT Rate, in which case the Designated CMT Telerate Page
or the Designated CMT Maturity Index shall be indicated,
or
(h) Other;
(14) Name, address and taxpayer identification number of the registered
owner(s);
(15) Denomination of certificates to be delivered at settlement;
(16) Selling Agent or Purchasing Agent.
(17) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(18) Net Proceeds to the Company.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security,
it will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 10:00 a.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have the Pricing Supplement filed with the
Commission not later than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated Security
a written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Certificated Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Certificated Security.
II-9
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or made
by a Purchasing Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which is the third Business Day after the date of acceptance
of such offer, unless the Company and the purchaser agree to settlement (a) on
another Business Day after the acceptance of such offer or (b) with respect to
an offer accepted by the Company prior to 10:00 a.m., New York City time, on the
date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated Securities
no later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 3:00 p.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Selling Agent's commission; provided that the
Selling Agent reserves the right to withhold payment for which it has not
received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent, the
Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Certificated Securities to the Purchasing Agent against delivery of payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to the
Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
II-10
The Trustee will cancel the Certificated Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Certificated Security.
II-11