Exhibit 1
DONALDSON, LUFKIN & JENRETTE, INC.
$3,134,800,000
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
March 15, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 Park Avenue
New York, New York 10172
DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL
99 Bishopsgate
London, EC2M3YF
England
Ladies and Gentlemen:
Donaldson, Lufkin & Jenrette, Inc., a Delaware corporation (the
"Company"), confirms its agreement with you with respect to the issue and sale
from time to time by the Company of its Medium-Term Notes due from nine months
or more from date of issue (the "Notes") at an aggregate initial offering price
of up to $3,134,800,000 (or the equivalent thereof in one or more foreign
currencies or currency units), which amount may be subject to reduction as a
result of the sale of other debt securities, preferred stock or warrants issued
by the Company after the date hereof, whether within or without the United
States ("Other Securities") pursuant to the registration statement referred to
below, and agrees with you (each an "Agent", and together with any additional
agents appointed from time to time pursuant to Section 13, the "Agents") as set
forth in this Agreement. The Notes will be issued under an indenture dated as
of June 8, 1998 (the "Indenture") between the Company and The Chase Manhattan
Bank, as
Trustee (the "Trustee"). The Notes shall have the maturities, interest rates,
redemption provisions, if any, and other terms set forth in the Prospectus
referred to below as it may be amended or supplemented from time to time. The
Notes will be issued, and the terms and rights thereof established, from time
to time by the Company in accordance with the Indenture.
On the basis of the representations and warranties herein contained,
but subject to the terms and conditions stated herein, including the right of
the Company to appoint additional Agents from time to time pursuant to Section
13 of this Agreement, and to the reservation by the Company of the right (A) to
sell Notes directly to investors (other than broker-dealers) in those
jurisdictions in which the Company is so permitted and (B) to accept (but not
solicit) offers to purchase Notes from time to time through one or more
purchasers on substantially the terms set forth in Exhibit C hereto, provided
that the Company shall provide the Agents with written notice of each such
acceptance within two business days thereof, the Company hereby (i) appoints
the Agents as the exclusive agents of the Company for the purpose of soliciting
and receiving offers to purchase Notes from the Company by others pursuant to
Section 2(a) hereof and (ii) agrees that, except as otherwise contemplated
herein, whenever it determines to sell Notes directly to any Agent as
principal, it will enter into (1) a separate agreement, substantially in the
form of Exhibit A hereto, or (2) an oral agreement confirmed in writing by the
Company, relating to such sale in accordance with Section 2(b) hereof. In
connection with the Company's reservation pursuant to clause (B) above, it is
understood that the Company may respond to inquiries and requests for
information from any such agents or dealers.
The Company has prepared and filed a registration statement on Form
S-3 (No. 333-30928) in respect of the Notes with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"). The Company also
has filed with, or proposes to file with, the Commission pursuant to Rule 424
under the Securities Act supplements to the prospectus included in the
Registration Statement that will describe certain terms of the Notes. The
Registration Statement, including the exhibits thereto, as amended to the
Commencement Date (as hereinafter defined) is hereinafter referred to as the
"Registration Statement" and the prospectus in the form in which it appears in
the Registration Statement is hereinafter referred to as the "Basic
Prospectus". The Basic Prospectus as supplemented by the prospectus supplement
or supplements (each a "Prospectus Supplement") specifically relating to the
Notes in the form filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 under the Securities Act is hereinafter referred to as the
"Prospectus". Any reference in this Agreement to the Registration Statement,
the Basic Prospectus or the
2
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Securities Act
which were filed under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Exchange
Act") on or before the date of this Agreement or the date of the Basic
Prospectus, any preliminary prospectus or the Prospectus, as the case may be;
and any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any preliminary prospectus or the
Prospectus, including any supplement to the Prospectus that sets forth only the
terms of a particular issue of the Notes (a "Pricing Supplement"), shall be
deemed to refer to and include any documents filed under the Exchange Act after
the date of this Agreement, or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be, which are deemed
to be incorporated by reference therein.
1. Representations. The Company represents and warrants to, and agrees
with, each Agent as of the Commencement Date, as of each date on which the
Company accepts an offer to purchase Notes (including any purchase by an Agent
as principal pursuant to a Terms Agreement), as of each date the Company issues
and sells Notes and as of each date the Registration Statement or the Basic
Prospectus is amended or supplemented, as follows (it being understood that
such representations and warranties shall be deemed to relate to the
Registration Statement, the Basic Prospectus and the Prospectus, each as
amended or supplemented to each such date):
(a) The Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company, threatened by the Commission; and the Registration Statement
and Prospectus comply and, as amended or supplemented, if applicable, will
comply, in all material respects with the Securities Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"); each part
of the Registration Statement filed with the Commission pursuant to the
Securities Act, when such part became effective, did not contain, and each
such part, as amended or supplemented, if applicable, will not contain,
any 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 did not, as of the date of the
Prospectus and any amendment or supplement thereto, contain any
3
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and the Prospectus, as amended or supplemented at such date,
if applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
except that the foregoing representations and warranties shall not apply
to (i) that part of the Registration Statement which constitutes the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee, and (ii) statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Agent furnished to the Company
in writing by such Agent expressly for use therein.
(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 none of such documents, when
they were filed with the Commission, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are filed
with the Commission will conform in all material respects to the
requirements of the Exchange Act, as applicable, 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 the
circumstances under which they were made, not misleading.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
material adverse change, or any development known by the Company (after
diligent inquiry) involving a prospective material adverse change, in or
affecting the business, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth, incorporated by reference or
contemplated in the Prospectus; and except as set forth, incorporated by
reference or contemplated in the Prospectus neither the Company nor any of
its subsidiaries has entered into any transaction or agreement (whether
4
or not in the ordinary course of business) material to the Company and its
subsidiaries taken as a whole.
(d) The Company and each of its "significant subsidiaries" as such
term is defined in Rule 1-02 of Regulation S-X under the Securities Act
(collectively, the "Subsidiaries") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation and has the corporate power and
authority to carry on business as it is currently being conducted and to
own, lease and operate its properties, all as described in the Prospectus,
and each is duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have
a material adverse effect on the Company and its Subsidiaries, taken as a
whole.
(e) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Subsidiaries have been duly authorized
and validly issued and are fully paid and non- assessable, and are owned
by the Company, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
(f) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof in accordance with
this Agreement and any applicable Terms Agreement, will be entitled to the
benefits of the Indenture, and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability.
(g) This Agreement and any applicable Terms Agreement has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company enforceable in accordance with its terms
(except as rights to indemnity and contribution hereunder may be limited
by applicable law).
5
(h) The Indenture has been duly qualified under the Trust Indenture
Act, and has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company, enforceable in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(i) The Notes will conform to the description thereof contained in
the Prospectus as amended or supplemented, if applicable, in connection
with the issuance of Notes.
(j) Neither the Company nor any of its Subsidiaries is in violation
of its respective certificate of incorporation or bylaws or in default in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct of the
business of the Company and its Subsidiaries, taken as a whole, to which
the Company or any of its Subsidiaries is a party or by which it or any of
its Subsidiaries or their respective property is bound.
(k) The execution, delivery and performance of this Agreement, the
Notes, the Indenture and any applicable Terms Agreement, and compliance by
the Company with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will not
require any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body (except
as such may be required under the Securities Act or state securities or
Blue Sky laws) and will not conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the certificate of
incorporation or bylaws of the Company or any of its Subsidiaries or any
agreement, indenture or other instrument to which it or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries or their
property is bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company any of
its Subsidiaries or their respective properties.
(l) Except as otherwise set forth or incorporated by reference in the
Prospectus, there are no material legal or
6
governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any of their respective property is
the subject, and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated. No contract or document of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement is
not so described, filed or incorporated by reference as required.
(m) Neither the Company nor any of its Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which in
each case might result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company and
its Subsidiaries, taken as a whole.
(n) The Company and each of its Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct its business; the Company and
each of its Subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit; and, except as described or
incorporated by reference in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company and its
Subsidiaries, taken as a whole.
(o) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of
7
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material adverse
effect on the Company and its Subsidiaries, taken as a whole.
(p) Except as otherwise set forth or incorporated by reference in the
Prospectus or such as are not material to the business, prospects,
financial condition or results of operation of the Company and its
Subsidiaries, taken as a whole, the Company and each of its Subsidiaries
has good and marketable title, free and clear of all liens, claims,
encumbrances and restrictions except liens for taxes not yet due and
payable, to all property and assets described in the Registration
Statement as being owned by it. All leases to which the Company or any of
its Subsidiaries is a party are valid and binding and no default has
occurred or is continuing thereunder, which might result in any material
adverse change in the business, prospects, financial condition or results
of operation of the Company and its Subsidiaries, taken as a whole, and
the Company and its Subsidiaries enjoy peaceful and undisturbed possession
under all such leases to which any of them is a party as lessee with such
exceptions as do not materially interfere with the use made by the Company
or such Subsidiary.
(q) The Company and each of its Subsidiaries maintains reasonably
adequate insurance.
(r) KPMG LLP are independent public accountants with respect to the
Company as required by the Securities Act.
(s) The financial statements, together with related schedules and
notes forming part of or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto),
present fairly the consolidated financial position, results of operations
and changes in financial position of the Company and its subsidiaries on
the basis stated or incorporated by reference in the Registration
Statement at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved,
8
except as disclosed therein; and the other financial and statistical
information and data set forth or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) is, in all material respects, accurately presented and prepared
on a basis consistent with such financial statements and the books and
records of the Company and its subsidiaries.
(t) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(u) Except as described in the Prospectus, no holder of any security
of the Company has any right to require registration of shares of common
stock or any other security of the Company.
(v) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) or is exempt therefrom.
(w) The Company and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due pursuant to such returns or pursuant to any assessment
received by the Company or any of its subsidiaries have been paid, other
than those being contested in good faith and for which adequate reserves
have been provided.
2. Solicitations by Agents of Offers to Purchase; Purchases by Agent
as Principal. (a) On the basis of the representations and warranties herein
contained,
9
but 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 offers to purchase the Notes from the Company
upon the terms and conditions set forth herein and in the Prospectus as amended
or supplemented from time to time.
So long as this Agreement shall remain in effect with respect to any
Agent, and subject to Section 13 of this Agreement and the reservations set
forth in clauses (A) and (B) of the second paragraph of this Agreement, the
Company shall not, without the consent of such Agent, solicit or accept offers
to purchase, or sell, Notes or any other debt securities with a maturity at the
time of original issuance of nine months or more except pursuant to this
Agreement and any Terms Agreement, or except pursuant to a private placement
not constituting a public offering under the Securities Act or except in
connection with a firm commitment underwriting pursuant to an underwriting
agreement that does not provide for a continuous offering of medium-term debt
securities.
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 Notes. Upon receipt of at least one business
day's prior notice from the Company, each Agent will suspend solicitation of
offers to purchase Notes from the Company until such time as the Company has
advised such Agent or Agents that such solicitation may be resumed. During the
period of time that such solicitation is suspended, the Company shall not be
required to deliver any opinions, letters or certificates in accordance with
Sections 4(i), 4(j) and 4(k); provided that if the Registration Statement or
Prospectus is amended or supplemented during the period of suspension (other
than by an amendment or supplement providing solely for a change in the
interest rates, redemption provisions, amortization schedules or maturities
offered for the Notes or for a change that the Agents deem to be immaterial),
no Agent shall be required to resume soliciting offers to purchase Notes until
the Company has delivered such opinions, letters and certificates as such Agent
may reasonably request.
The Company agrees to pay each Agent, as consideration for the sale of
each Note resulting from a solicitation made or an offer to purchase received
by such Agent, a commission in the form of a discount from the purchase price
of such Note in an amount equal to the following applicable percentage of the
principal amount of such Note sold:
10
Commission
(percentage of
aggregate
principal amount
Maturities of Notes Sold of Notes 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......... .625%
From 10 years to less than 12 years........ .650%
From 12 years to less than 15 years........ .675%
From 15 years to less than 20 years........ .750%
From 20 years to and including 30 years.... .875%
The Agents are authorized to solicit offers to purchase Notes only in
the principal amount of $1,000 (or, if Notes are denominated in currencies,
currency units or composite currencies other than U.S. dollars, such other
minimum denomination specified in the applicable Pricing Supplement) or any
amount in excess thereof which is an integral multiple of $1,000 (or, if Notes
are denominated in currencies or currency units other than U.S. dollars,
integrals in excess of the minimum denomination specified in the applicable
Pricing Supplement). Each Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by such Agent as agent that in
its judgment should be considered by the Company. The Company shall have the
sole right to accept offers to purchase the Notes and may reject any such offer
in whole or in part. Each Agent shall have the right, in its sole discretion,
to reject any offer to purchase Notes, as a whole or in part, that it
reasonably considers to be unacceptable and any such rejection shall not be
deemed a breach of its agreements herein contained. The procedural details
relating to the issue and delivery of Notes sold by an Agent as agent and the
payment therefor are set forth in the Administrative Procedures (as hereinafter
defined).
(b) Each sale of Notes by the Company directly to any of you as
principal for resale to others shall be made in accordance with the terms of
this Agreement and (unless any such Agent shall otherwise agree) a Terms
Agreement which will provide for the sale and purchase of such Notes. For the
purposes of this Agreement, the term "Purchaser" shall refer to an Agent acting
as principal hereunder and not as agent for the Company, and the terms "Agent",
"Agents" and "you" shall refer to each of you acting in both such capacities or
in either such capacity, as the context requires. Each Terms Agreement may also
specify certain provisions relating to the reoffering of such Notes by such
Purchaser. The
11
commitment of any Purchaser to purchase Notes 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 and in the
applicable Terms Agreement set forth. Each Terms Agreement shall specify the
principal amount of Notes to be purchased by such Purchaser pursuant thereto,
the price to be paid to the Company for such Notes, the maturity date of such
Notes, the interest rate or interest rate basis, if any, applicable to such
Notes, any other terms of such Notes, the time and date and place of delivery
of and payment for such Notes (the time and date of any and each such delivery
and payment, the "Time of Delivery"), any provisions relating to rights of, and
default by, underwriters acting together with such Purchaser in the reoffering
of Notes, and shall also specify any modification of the requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant
to Section 4 hereof. Unless otherwise specified in a Terms Agreement, the
procedural details relating to the issue and delivery of Notes purchased by a
Purchaser and the payment therefor shall be as set forth in the Administrative
Procedures.
(c) The Company acknowledges that the obligations of the Agents are
several and not joint and, subject to the provisions of this Section 2, each
Agent shall have complete discretion as to the manner in which it solicits
purchasers for the Notes and as to the identity thereof.
(d) The Agents and the Company agree to perform their respective
duties and obligations specifically provided to be performed in the Medium-Term
Notes Administrative Procedures (the "Administrative Procedures") attached
hereto as Exhibit B, as the same may be amended from time to time. The
Administrative Procedures may be amended only by written agreement of the
Company and the Agents.
(e) The Company agrees to notify each Agent of sales by the Company of
Other Securities.
3. Commencement Date. The documents required to be delivered pursuant
to Section 6 hereof on the Commencement Date shall be delivered to the Agents
at the offices of Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park
Avenue, New York, New York 10172, at 11:00 a.m., New York City time, on the
date of this Agreement, which date and time of such delivery may be postponed
by agreement between the Agents and the Company but in no event shall be later
than the day prior to the date on which solicitation of offers to purchase
Notes is commenced or the first date on which the Company accepts an offer by
any Agent to purchase Notes as principal (such time and date being referred to
herein as the "Commencement Date").
12
4. Covenants of the Company. The Company covenants and agrees with
each Agent:
(a)(i) To make no amendment or supplement to the Registration
Statement or the Prospectus prior to the termination of the offering of
the Notes pursuant to this Agreement or any Terms Agreement which shall be
disapproved by any Agent after reasonable opportunity to comment thereon,
provided, however, that the foregoing shall not apply to any of the
Company's periodic filings with the Commission described in subsection
(iii) below, copies of which filings the Company will cause to be
delivered to the Agents promptly after their transmission to the
Commission for filing; (ii) subject to the foregoing clause (i), promptly
to cause each Prospectus Supplement to be filed with or transmitted for
filing to the Commission in accordance with Rule 424(b) under the
Securities Act and to prepare, with respect to any Notes to be sold
through or to such Agent pursuant to this Agreement, a Pricing Supplement
with respect to such Notes in a form previously approved by such Agent and
to file such Pricing Supplement in accordance with Rule 424(b) under the
Securities Act; and (iii) promptly to file 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 Notes. The Company will
promptly advise each Agent (i) of the filing of any amendment or
supplement to the Basic Prospectus or any amendment to the Registration
Statement and of the effectiveness of any such amendment to the
Registration Statement, (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
order preventing or suspending the use of any Prospectus relating to the
Notes or the initiation or threatening of any proceeding for that purpose,
or of any request by the Commission for any amendment or supplement of the
Registration Statement or Prospectus or for additional information; and
(iii) of the receipt by the Company of any notification with respect to
any suspension of the qualification of the Notes for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose. The Company agrees to use its best efforts to prevent
the issuance of any such stop order or of any such order preventing or
suspending the use of any such prospectus or of any notification
suspending any such qualification and, if issued, to use promptly its best
efforts to
13
obtain withdrawal thereof as soon as possible. If the Basic Prospectus is
amended or supplemented as a result of the filing under the Exchange Act
of any document incorporated by reference in the Prospectus, no Agent
shall be obligated to solicit offers to purchase Notes so long as it is
not reasonably satisfied with such document.
(b) To endeavor to qualify the Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Agents shall
reasonably request and to continue such qualification in effect so long as
reasonably required in connection with the distribution of the Notes and
to pay all fees and expenses (including fees and disbursements of counsel
to the Agents) reasonably incurred in connection with such qualification
and in connection with the determination of the eligibility of the Notes
for investment under the laws of such jurisdictions as such Agent may
designate; provided that the Company shall not be required to file a
general consent to service of process in any jurisdiction or to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified.
(c) To furnish each Agent and counsel to the Agents, at the expense
of the Company, a signed copy of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits and
documents incorporated by reference therein and, during the period
mentioned in paragraph (d) below, to furnish each Agent as many copies of
the Prospectus (including all amendments and supplements thereto) and
documents incorporated by reference therein as such Agent may reasonably
request.
(d) If at any time when a Prospectus relating to the Notes is
required to be delivered under the Securities Act, any event shall occur
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 when such Prospectus is delivered to a
purchaser, not misleading, or, if in the opinion of the Agents or the
Company, it is necessary at any time to amend or supplement the Prospectus
to comply with law, to immediately notify the Agents by telephone (with
confirmation in writing) and request each Agent (i) in its capacity as
agent of the Company, to suspend solicitation of offers to purchase Notes
from the Company; and (ii) to cease sales of any Notes such Agent may
14
then own as principal (and, if so notified in either case, such Agent
shall immediately cease such solicitations or sales and cease using the
Prospectus as soon as practicable, but in any event not later than one
business day later). If the Company shall decide to amend or supplement
the Registration Statement or the Prospectus, as then amended or
supplemented, it shall so advise each Agent promptly by telephone (with
confirmation in writing) and, at its expense, shall 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 and
will supply such amended or supplemented Prospectus to the Agents in such
quantities as they may reasonably request. If any such amendment or
supplement and any documents, opinions, letters and certificates furnished
to the Agents pursuant to Sections 4(e), 4(i), 4(j) and 4(k) in connection
with the preparation and filing of such amendment or supplement are
satisfactory in all respects to the Agents, upon the filing with the
Commission of such amendment or supplement to the Prospectus or upon the
effectiveness of an amendment to the Registration Statement, the Agents
will resume the solicitation of offers to purchase Notes hereunder.
Notwithstanding any other provision of this Section 4(d), until the
distribution of any Notes any Agent may own as principal has been
completed or in the event such Agent, in the opinion of its counsel, is
otherwise required to deliver a Prospectus in respect of a transaction in
the Notes, if any event described in this Section 4(d) occurs the Company
will, at its own expense, promptly prepare and file with the Commission an
amendment or supplement, satisfactory in all respects to such Agent, that
will correct such statement or omission or effect such compliance, will
supply such amended or supplemented Prospectus to such Agent in such
quantities as such Agent may reasonably request and shall furnish to such
Agent pursuant to Sections 4(e), 4(i), 4(j) and 4(k) such documents,
certificates, opinions and letters as it may request in connection with
the preparation and filing of such amendment or supplement.
(e) To furnish to the Agents during the term of this Agreement such
relevant documents and certificates of officers of the Company relating to
the business, operations and affairs of the Company, the Registration
Statement, the Basic Prospectus, any amendments or supplements thereto,
the Indenture, the Notes, this Agreement, the Administrative Procedures,
any applicable Terms
15
Agreement and the performance by the Company of its obligations hereunder
or thereunder as the Agents may from time to time reasonably request and
shall notify the Agents promptly in writing of any downgrading, or on its
receipt of any notice of (i) any intended or potential downgrading or (ii)
any review or possible change that does not indicate an improvement in the
rating accorded any of securities of, or guaranteed by, the Company by any
"nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act.
(f) To make generally available to its security holders and to such
Agent as soon as practicable earnings statements which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the
Commission promulgated thereunder covering periods of at least twelve
months beginning in each case with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158) of the
Registration Statement with respect to each sale of Notes.
(g) So long as any Notes are outstanding, to furnish to such Agent
copies of all reports or other communications (financial or other)
furnished to holders of Notes and 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.
(h) That, from the date of any applicable Terms Agreement with such
Agent or other agreement by such Agent to purchase Notes as principal and
continuing to and including the business day following the related Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of any
debt securities of or guaranteed by the Company which are substantially
similar to the Notes, without the prior written consent of such Agent.
(i) That each time that (i) the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment or
supplement providing solely for the specification of or a change in the
interest rates, redemption provisions, amortization schedules or
maturities offered on the Notes or for a change the Agents deem to be
immaterial), the Company shall furnish or cause to be furnished forthwith
to the Agents the written opinions of Michael A. Boyd, the General Counsel
of the
16
Company, or other counsel for the Company satisfactory to such Agent, each
dated the date of such amendment or supplement, in form satisfactory to
the Agents, of the same tenor as the opinion referred to in Section 6(b)
hereof but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the date of such opinion; or, in
lieu of such opinion, counsel last furnishing such an opinion, may furnish
to the Agents a letter to the effect that such Agents may rely on the
opinion of such counsel which was last furnished to such Agents to the
same extent as though it were dated the date of such letter (except that
the statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented to
date of delivery of such letter).
(j) That each time that the Registration Statement or the Prospectus
is amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Registration Statement or the Prospectus, the Company
shall cause its independent public accountants, forthwith to furnish each
Agent a letter, dated the date of the effectiveness of such amendment or
the date of filing of such supplement, in form satisfactory to such Agent,
of the same tenor as the letter referred to in Section 6(d) with such
changes as may be necessary to reflect the amended and supplemental
financial information included or incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented to
the date of such letter, provided that if the Registration Statement or
the Prospectus is amended or supplemented solely to include or incorporate
by reference financial information as of and for a fiscal quarter, such
independent public accountants may limit the scope of such letter, which
shall be satisfactory in form to each Agent, to the unaudited financial
statements and the related "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in such amendment
or supplement, unless any other information included or incorporated by
reference therein of an accounting, financial or statistical nature is of
such a nature that, in the reasonable judgment of any Agent, such letter
should cover such other information; provided further that, if during the
period from the date hereof to and including October 15, 2000, no purchase
of Notes by a Purchaser pursuant to a Terms Agreement shall have taken
place, then the obligation of the Company's certified public accountants
to furnish such letters pursuant to this
17
paragraph (j) shall be suspended. Thereafter, upon the purchase of any
Notes by a Purchaser pursuant to a Terms Agreement, the Company's
certified public accountants shall furnish such letter as would most
recently have been issued pursuant to this paragraph (j) if no suspension
had occurred, and such accountants' obligations under this paragraph (i)
shall resume.
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by an amendment or supplement
providing solely for a change in the interest rates, redemption
provisions, amortization schedules or maturities offered on the Notes or
for a change the Agents deem to be immaterial), the Company shall furnish
or cause to be furnished forthwith to the Agents a certificate signed by
an executive officer of the Company, dated the date of such amendment or
supplement in form satisfactory to the Agents, of the same tenor as the
certificates referred to in Section 6(e) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
the date of delivery of such certificate or to the effect that the
statements contained in the certificate referred to in Section 6(e) 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 or supplemented to such date).
5. Costs and Expenses. The Company covenants and agrees with each
Agent that the Company will, whether or not any sale of Notes is consummated,
pay all costs and expenses incident to the performance of its obligations
hereunder and under any applicable Terms Agreement, including without limiting
the generality of the foregoing, all costs and expenses: (i) incident to the
preparation, issuance, execution, authentication and delivery of the Notes,
including any expenses of the Trustee, (ii) incident to the preparation,
printing and filing under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in each case all exhibits,
amendments and supplements thereto), (iii) incurred in connection with the
registration or qualification and determination of eligibility for investment
of the Notes under the laws of such jurisdictions as the Agents (or in
connection with any Terms Agreement, the applicable Agent) may designate
(including fees of counsel for the Agents (or such Agent) and their
disbursements), (iv) in connection with the listing of the Notes on any stock
exchange, (v) related to any filing with National Association of Securities
Dealers, Inc., (vi) in connection with the printing (including word processing
and duplication costs) and delivery of this Agreement,
18
the Indenture, any Blue Sky Memoranda and any Legal Investment Survey and the
furnishing to the Agents and dealers of copies of the Registration Statement
and the Prospectus, including mailing and shipping, as herein provided, (vii)
payable to rating agencies in connection with the rating of the Notes, (viii)
the fees and disbursements of counsel for the Agents incurred in connection
with the offering and sale of the Notes, including any opinions to be rendered
by such counsel hereunder and (ix) any advertising and out-of-pocket expenses
incurred by the Agents.
6. Conditions. The obligation of any Agent, as agent of the Company,
at any time ("Solicitation Time") to solicit offers to purchase the Notes, the
obligation of any Purchaser to purchase Notes pursuant to any Terms Agreement,
and the obligation of any other purchaser to purchase Notes shall in each case
be subject (1) to the condition that all representations and warranties of the
Company herein and all statements of officers of the Company made in any
certificate furnished pursuant to the provisions hereof are true and correct
(i) in the case of an Agent's obligation to solicit offers to purchase Notes,
at and as of such Solicitation Time and (ii) in the case of any Purchaser's or
any other purchaser's obligation to purchase Notes, at and as of the time the
Company accepts the offer to purchase such Notes and, as the case may be, at
and as of the related Time of Delivery or time of purchase; (2) to the
condition that at or prior to such Solicitation Time, time of acceptance, Time
of Delivery or time of purchase, as the case may be, the Company shall have
complied with all its agreements and all conditions on its part to be performed
or satisfied hereunder; and (3) to the following additional conditions when and
as specified (it being understood that under no circumstance shall any Agent
have any duty or obligation to exercise discretionary judgment on behalf of the
Company or any purchaser in respect of the fulfillment of any such condition):
(a) Prior to such Solicitation Time or corresponding Time of Delivery
or time of purchase, as the case may be:
(i) the Prospectus as amended or supplemented (including, if
applicable, the Pricing Supplement) with respect to such Notes
shall have been filed with the Commission pursuant to Rule
424(b) under the Securities Act within the applicable time
period prescribed for such filing by the rules and regulations
under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been
19
commenced or shall be pending before or contemplated by the
Commission;
(ii) there shall not have been any downgrading, nor shall any
notice have been given of any intended or potential downgrading
or any review or possible change that does not indicate the
direction of the possible change, in the rating accorded any of
the Company's securities by any "nationally recognized
statistical rating organization", as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act subsequent
to the date hereof;
(iii) there shall not have been any change, or any development
involving a prospective adverse change, in the capital stock or
in the long-term debt of the Company or any of its Subsidiaries
from that set forth or incorporated by reference in the
Registration Statement and Prospectus which would, in the
opinion of the Agents, materially impair the investment quality
of the Notes;
(iv) the Company and its Subsidiaries shall have no liability or
obligation, direct or contingent, which is material to the
Company and its Subsidiaries, taken as a whole, other than those
reflected or incorporated by reference in the Registration
Statement and the Prospectus;
(v) there shall not have been any adverse change or development
involving a prospective adverse change, in the condition,
financial or otherwise, of the Company or any of its
Subsidiaries or the earnings, affairs, or business prospects of
the Company or any of its Subsidiaries, whether or not arising
in the ordinary course of business, which would, in the opinion
of the Agents, materially impair the investment quality of the
Notes; and
(vi) there shall not have been any (A) outbreak or escalation of
hostilities or other national or international calamity or
crisis or change in economic conditions or in the financial
markets of
20
the United States or elsewhere that, in the judgment of the
applicable Agent, is material and adverse and would, in the
judgment of the applicable Agent, make it impracticable to
market the Notes on the terms and in the manner contemplated in
the Prospectus, (B) suspension or material limitation of trading
in securities on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market System or limitation on
prices for securities on any such exchange or National Market
System, (C) enactment, publication, decree or other promulgation
of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in the opinion
of the Agents materially and adversely affects, or will
materially and adversely affect, the business or operations of
the Company or any Subsidiary, (D) declaration of a banking
moratorium by either federal or New York State authorities or
(E) taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal
affairs which in the opinion of the Agents has a material
adverse effect on the financial markets in the United States.
(b) On the Commencement Date, and in the case of a purchase of Notes
by a Purchaser pursuant to a Terms Agreement or otherwise, if called for
by the applicable Terms Agreement or other agreement, at the corresponding
Time of Delivery, Michael A. Boyd, General Counsel of the Company, or such
other counsel acceptable to the Agents, shall have furnished to the Agents
or the Purchaser, as the case may be, his written opinion, dated the
Commencement Date or Time of Delivery, as the case may be, in form and
substance satisfactory to such Agents or such Purchaser, as the case may
be, to the effect that:
(i) the Company and each of the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority required to carry on its
business as described in the Prospectus and to own, lease and
operate its properties;
21
(ii) each of the Company and the Subsidiaries is duly qualified
and is in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) all the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar
rights;
(iv) all of the outstanding shares of capital stock of, or other
ownership interests in, each of the Subsidiaries have been duly
and validly authorized and issued, are fully paid and
non-assessable and are owned by the Company, free and clear of
any security interest, claim, lien, encumbrance or adverse
interest of any nature;
(v) the statements (A) incorporated by reference in the
Prospectus from Item 3 of the Company's Annual Report on Form
10-K for the year ended December 31, 1998 and (B) incorporated
in the Prospectus from Item 1 of Part II of the Company's
Quarterly Reports on Form 10-Q filed since such Annual Report,
insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal
matters, documents and proceedings;
(vi) to the best of such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is or could be a party or to
which any of their respective property is or could be subject
that are required to be described in the Registration Statement
or the Prospectus and are not so described or incorporated by
reference, or any
22
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or are required to be filed as an exhibit to the
Registration Statement that are not so described or filed or
incorporated by reference as required;
(vii) to the best of such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in violation of its
respective certificate of incorporation or by-laws except for
such violations that would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole, and, neither
the Company nor any of its Subsidiaries is in default in the
performance of any obligation, agreement, covenant or condition
contained in any bond, debenture, indenture, loan agreement,
mortgage, lease or any other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole,
to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or their respective
property is bound;
(viii) neither the Company nor any of the Subsidiaries has
violated any Environmental Law or any provisions of the Employee
Retirement Income Security Act of 1974, as amended, or the rules
and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a
material adverse effect on the business, prospects, financial
condition or results of operation of the Company and its
subsidiaries, taken as a whole;
(ix) each of the Company and the Subsidiaries has such
Authorizations of, and has made all filings with and notices to,
all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including,
without limitation, under any applicable Environmental Laws, as
are necessary to own, lease, license and operate its respective
properties and to conduct its
22
business, except where the failure to have any such
Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on
the business, prospects, financial condition or results of
operations of the Company and its Subsidiaries, taken as a
whole; each such Authorization is valid and in full force and
effect and each of the Company and its Subsidiaries is in
compliance with all the terms and conditions thereof and with
the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event
has occurred (including, without limitation, the receipt of any
notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results
or, after notice or lapse of time or both, would result in any
other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions
that are materially burdensome to the Company and its
subsidiaries, taken as a whole; except where such failure to be
valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole;
(x) the execution, delivery and performance by the Company of
this Agreement, any applicable Terms Agreement, the Indenture
and the Notes and compliance by the Company with all the
provisions hereof and thereof will not conflict with or
constitute a breach of any of the terms or provisions of, or a
default under, the certificate of incorporation or by-laws of
the Company or any of its Subsidiaries or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of
23
its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or their respective property is bound, except
for any such conflict, breach or default which would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole, or violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over the
Company, any of its Subsidiaries or their respective property;
(xi) to the best of such counsel's knowledge, all leases to
which the Company or any of its Subsidiaries is a party are
valid and binding and no default has occurred or is continuing
thereunder which might result in any material adverse change in
the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole,
and the Company and its Subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which any of
them is a party as lessee with such exceptions as do not
materially interfere with the use made by the Company or such
Subsidiary;
(xii) each document incorporated by reference in the
Registration Statement and the Prospectus (except for the
financial statements included therein as to which no opinion
need be expressed) complied as to form when filed with the
Commission in all material respects with the Securities Exchange
Act of 1934, as amended.
(xiii) (1) the Registration Statement and the Prospectus (except
for the financial statements, including the notes thereto, and
supporting schedules and other financial, statistical and
accounting data contained or incorporated by reference therein
and the statements of eligibility of the Trustees on Form T-1,
as to which no opinion need be expressed) comply as to form in
all material respects with the requirements of the Securities
Act and the rules and regulations of the Commission
25
thereunder; and (2) nothing has come to the attention of such
counsel that would lead such counsel to believe that (except for
the financial statements, including the notes thereto, and
supporting schedules and other financial, statistical and
accounting data contained or incorporated by reference therein
and the statements of eligibility of the Trustees on Form T-1 as
to which no belief need be expressed) (x) any part of the
Registration Statement when such part became effective or on the
date of this Agreement contained any 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 (y) the Prospectus on the date hereof contains any
untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that the opinion and belief set
forth in clauses (1) and (2) above shall be deemed not to cover
information concerning an offering of particular Notes to the
extent such information will be set forth in a supplement to the
Prospectus.
The opinion described in Section 6 (b) above shall be rendered to you
at the request of the Company and shall so state therein.
(c) On the Commencement Date, and in the case of a purchase of Notes
by a Purchaser pursuant to a Terms Agreement or otherwise, if called for
by the applicable Terms Agreement or other agreement, at the corresponding
Time of Delivery, Davis Polk & Wardwell, counsel to the Agents, shall have
furnished to the Agents or such Purchaser, as the case may be, their
opinion, dated the Commencement Date or Time of Delivery, as the case may
be, to the effect that:
(i) the forms of the Notes have been duly authorized and, when
the terms of a particular Note and its issuance and sale have
been duly established in conformity with the Indenture, and when
such Note has been duly executed and authenticated in
26
accordance with the provisions of the Indenture and delivered to
and paid for by the purchasers thereof in accordance with the
terms of this Agreement and any applicable Terms Agreement, such
Note will be entitled to the benefits of the Indenture and will
be a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except (a) as
such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights and remedies generally and (b) as such enforcement may be
limited by general principles of equity, regardless of whether
enforcement is sought in a proceeding at law or in equity;
(ii) the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended and has been duly authorized,
executed and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the Trustee) is
a valid and binding agreement of the Company, enforceable in
accordance with its terms except (a) as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights and remedies generally
and (b) as such enforcement may be limited by general principles
of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity;
(iii) each of this Agreement and any applicable Terms Agreement
has been duly authorized, executed and delivered by the Company;
(iv) the Registration Statement has become effective under the
Act, no stop order suspending its effectiveness has been issued
and no proceedings for that purpose are, to the best of such
counsel's knowledge, pending before or contemplated by the
Commission;
27
(v) the statements relating to legal matters or documents (A) in
the Basic Prospectus under the captions "Description of Debt
Securities" and "Plan of Distribution" and in the Prospectus
Supplement under the captions "Description of Notes" and "Plan
of Distribution" and (B) in the Registration Statement in Item
15 of Part II fairly summarize in all material respects such
matters or documents;
(vi) the execution, delivery and performance by the Company of
this Agreement, any applicable Terms Agreement, the Notes and
the Indenture and compliance by the Company with all the
provisions hereof and thereof will not, to the best of our
knowledge require any consent, approval, authorization or other
order of any court, regulatory body, administrative agency or
other governmental body (except such as may be required under
the Securities Act, the Trust Indenture Act of 1939, as amended
or state securities or Blue Sky laws or by the National
Association of Securities Dealers, Inc.), except where the
failure to obtain such consents, approvals, authorizations or
other orders would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(vii) the Company is not required to be registered as an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended;
(viii) to the best of such counsel's knowledge based solely upon
due inquiry of responsible officers of the Company, there are no
contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company
to include securities of the Company with the securities
registered pursuant to the Registration Statement; and
(ix) nothing has come to the attention of such counsel that
causes such counsel to believe that (1) the Registration
Statement and the Prospectus (except for the financial
statements, including the
27
notes thereto, and supporting schedules and other financial,
statistical and accounting data contained or incorporated by
reference therein and the statements of eligibility of the
Trustees on Form T- 1, as to which no belief need be expressed)
do not comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations
of the Commission thereunder; and (2) (x) the Registration
Statement and the prospectus included therein (except for the
financial statements, including the notes thereto, and
supporting schedules and other financial, statistical and
accounting data contained or incorporated by reference therein
and the statements of eligibility of the Trustees on Form T-1 as
to which no belief need be expressed) at the time the
Registration Statement became effective or on the date of this
Agreement contained any 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
(y) the Prospectus on the date hereof contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the opinion and belief set forth in
clauses (1) and (2) above shall be deemed not to cover
information concerning an offering of particular Notes to the
extent such information will be set forth in a supplement to the
Prospectus.
In giving such opinions with respect to the matters covered by Section
6(c) above, Davis Polk & Wardwell may state that their opinion and belief are
based upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto (other than the
documents incorporated therein by reference) and review and discussion of the
contents thereof (including the documents incorporated therein by reference),
but are without independent check or verification except as specified.
(d) On the Commencement Date, the Company's independent certified
public accountants who have certified the financial statements of the
Company and its subsidiaries included
29
or incorporated by reference in the Registration Statement and Prospectus,
as then amended or supplemented, shall have furnished to the Agents a
letter, dated the Commencement Date, in form and substance satisfactory to
the Agents, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information relating to the
Company contained in or incorporated by reference in the Registration
Statement and the Prospectus, as then amended or supplemented.
(e) On the Commencement Date, and in the case of a purchase of Notes
by a Purchaser pursuant to a Terms Agreement or otherwise, if called for
by the applicable Terms Agreement or other agreement, at the corresponding
Time of Delivery, the Agents or such Purchaser, as the case may be, shall
have received a certificate or certificates signed by an executive officer
of the Company, dated the Commencement Date or Time of Delivery, as the
case may be, to the effect set forth in Section 6(a)(i), (ii), (iii), (iv)
and (v) above and to the further effect that (1) the representations and
warranties of the Company contained herein are true and correct on and as
of the Commencement Date or Time of Delivery, as the case may be, as if
made on and as of such date and (2) the Company has complied with all
agreements and all conditions on its part to be performed or satisfied
hereunder or under the applicable Terms Agreement or other agreement at or
prior to the Commencement Date or Time of Delivery, as the case may be.
(f) On the Commencement Date, Davis Polk & Wardwell, special tax
counsel to the Company, shall have furnished an opinion dated the
Commencement Date confirming that the information set forth in the
Prospectus under the caption "United States Tax Considerations" is
accurate in all material respects.
(g) On the Commencement Date and at each Time of Delivery, the
Company shall have furnished to the Agents or the Purchaser, as the case
may be, such further certificates, information and documents as such
Agents or such Purchaser, as the case may be, may reasonably request.
7. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Agent and each person, if any, who controls any Agent within the
30
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Agents furnished in writing to the Company by or on
behalf of any Agent expressly for use therein.
(b) In case any action shall be brought against any Agent or any
person controlling such Agent, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company, such
Agent shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses.
Any Agent or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Agent or
such controlling person unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel reasonably satisfactory to
such indemnified person or (iii) the named parties to any such action
(including any impleaded parties) include both such Agent or such controlling
person and the Company and such Agent or such controlling person shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
the Company (in which case the Company shall not have the right to assume the
defense of such action on behalf of such Agent or such controlling person, it
being understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all such Agents and controlling persons,
which firm shall be designated in writing by Donaldson, Lufkin & Jenrette
Securities Corporation, subject to approval by a majority of such Agents, and
that all such fees and expenses shall be reimbursed as they are incurred). The
Company shall not be liable for any settlement of any such action effected
without its written consent but if settled with the written consent of the
Company, the Company agrees to indemnify and hold harmless any Agent and
31
any such controlling person from and against any loss or liability by reason of
such settlement. Notwithstanding the immediately preceding sentence, if in any
case where the fees and expenses of counsel are at the expense of the
indemnifying party and an indemnified party shall have requested the
indemnifying party to reimburse the indemnified party for such fees and
expenses of counsel as incurred, such indemnifying party agrees that it shall
be liable for any settlement of any action effected without its written consent
if (i) such settlement is entered into more than ten business days after the
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(c) Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement and any person controlling the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each Agent
but only with reference to information relating to such Agent furnished in
writing by or on behalf of such Agent expressly for use in the Registration
Statement, the Prospectus or any preliminary prospectus. In case any action
shall be brought against the Company, any of its directors, any such officer or
any person controlling the Company based on the Registration Statement, the
Prospectus or any preliminary prospectus and in respect of which indemnity may
be sought against any Agent, such Agent shall have the rights and duties given
to the Company (except that if the Company shall have assumed the defense
thereof, such Agent shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Agent), and the
Company, its directors, any such officers and any person controlling the
Company shall have the rights and duties given to the Agent, by Section 7(b)
hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Agents on the
32
other hand from the offering of the Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Agents in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Agents
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes (before deducting expenses) received by the Company, and
the total underwriting discounts and commissions received by the Agents from
the offering of the Notes, bear to the total price to the public of the Notes.
The relative fault of the Company and the Agents shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the Company or the Agents 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 Section 7(d) were determined by pro
rata allocation (even if the 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 in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, 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 Section 7, no Agent
shall be required to contribute any amount in excess of the amount by which the
total price at which the Notes purchased by or sold through such Agent and
distributed to the public 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 Agents' obligations to contribute pursuant to
this Section 7(d) are several in proportion to the respective principal amount
of Notes purchased by or through each of the Agents hereunder and not joint.
8. Termination. (a) This Agreement may be terminated at any time (i) by
the Company with respect to any or all of the Agents or (ii) by any Agent with
respect to itself only, in each case upon the giving of written notice of such
termination to each other party hereto. Any Terms Agreement shall be subject to
33
termination in the absolute discretion of the Agent or Agents that are parties
thereto on the terms set forth or incorporated by reference therein. The
termination of this Agreement shall not require termination of any agreement by
an Agent to purchase Notes as principal (whether pursuant to a Terms Agreement
or otherwise) and the termination of such an agreement shall not require
termination of this Agreement. In the event this Agreement is terminated with
respect to any Agent, (x) this Agreement shall remain in full force and effect
with respect to any Agent as to which such 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
Notes which are already issued, agreed to be issued or the subject of a pending
offer at the time of such termination and (z) in any event, the provisions of
the fourth paragraph of Section 2(a), Section 2(c), the last sentence of
Section 4(d) and Sections 4(f), 4(g), 5, 7, 9, 10, 12 and 15 shall survive;
provided that if at the time of termination an offer to purchase Notes has been
accepted by the Company but the time of delivery to the purchaser or its agent
of such Notes has not yet occurred, the provisions of Sections 2(b), 2(d), 4(a)
through 4(e), 4(h) through 4(k) and 6 shall also survive. If any Terms
Agreement is terminated, the provisions of the last sentence of Section 4(d)
and Sections 2(b), 2(d), 4(a), 4(b), 4(e), 4(g) through 4(k), 5, 6, 7, 9, 10,
12 and 15 (which shall have been incorporated by reference in such Terms
Agreement) shall survive.
(b) If this Agreement or any Terms Agreement shall be terminated by an
Agent or Agents because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement or
any Terms Agreement or if for any reason the Company shall be unable to perform
its obligations under this Agreement or any Terms Agreement or any condition of
any Agent's obligations cannot be fulfilled, the Company agrees to reimburse
each Agent or such Agents as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
expenses of their counsel) reasonably incurred by such Agent or Agents in
connection with this Agreement or the offering of Notes.
9. Position of the Agents. Each Agent, in soliciting offers to
purchase Notes 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 and does not assume any obligation
towards or relationship of agency or trust with any purchaser of Notes. Each
Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes from the Company
was solicited by such Agent and has been accepted by the Company, but such
Agent shall not have any liability to the Company in the event such purchase is
not consummated for any
34
reason. If the Company shall default on its obligation to deliver Notes to a
purchaser whose offer it has accepted, the Company shall (i) hold the relevant
Agent harmless against any loss, claim, damage or liability arising from or as
a result of such default by the Company and (ii) notwithstanding such default,
pay to the Agent that solicited such offer any commission to which it would be
entitled in connection with such sale.
10. Representations and Indemnities to Survive. The respective
indemnities and contribution agreements, representations, warranties and other
statements of the Company, its officers and the Agents set forth in or made
pursuant to this Agreement or any agreement by an Agent to purchase Notes as
principal shall remain in full force and effect regardless of any termination
of this Agreement or any such agreement, any investigation 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 Notes.
11. Notices. Except as otherwise specifically provided herein or in
the Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing, and effective only on receipt, and will be
delivered by hand, by mail (postage prepaid), by telegram (charges prepaid),
telex or telecopier. Communications to the Agents will be sent c/o Donaldson,
Lufkin & Jenrette Securities Corporation, to 277 Park Avenue, New York, New
York 10172, Telecopier: (212) 892-8244; Attention: Roger Thomson and
communications to the Company will be sent to 277 Park Avenue, New York, New
York 10172; Telecopier: (212) 892-4670; Attention: Charles Hendrickson, Senior
Vice President and Treasurer.
12. Successors. This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent and the Company,
and their respective successors and the officers, directors and controlling
persons referred to in Section 7 and (to the extent expressly provided in
Section 6) the purchasers of Notes, and no other person shall acquire or have
any right or obligation under or by virtue of this Agreement or any Terms
Agreement.
13. Amendments. This Agreement may be amended or supplemented if, but
only if, such amendment or supplement is in writing and is signed by the
Company and each Agent; provided that the Company may from time to time, on 2
days prior written notice to the Agents but without the consent of any Agent,
amend this Agreement to add as a party hereto one or more additional firms
registered under the Exchange Act, whereupon each such firm shall become an
Agent hereunder on the same terms and conditions as the other Agents that are
35
parties hereto. The Agents shall sign any amendment or supplement giving effect
to the addition of any such firm as an Agent under this Agreement.
14. Business Day. Time shall be of the essence in this Agreement and
any Terms Agreement. As used herein, the term "business day" shall mean any day
which is not a Saturday or Sunday or legal holiday or a day on which banks in
New York City are required or authorized by law, regulation or executive order
to close.
15. Applicable Law. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflict of laws provisions thereof.
16. Counterparts. This Agreement and any Terms Agreement may be
signed in counterparts, each of which shall be an original, and all of which
together shall constitute one and the same instrument.
17. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
If the foregoing is in accordance with your understanding, please sign
and return to us 16 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.
36
Very truly yours,
DONALDSON, LUFKIN & JENRETTE, INC.
By: /s/ Charles J. Hendrickson
-------------------------------------
Name: Charles J. Hendrickson
Title: Senior Vice President & Treasurer
Accepted in New York, New York, as of the date first above written:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Roger Thomson
-------------------------------
Name: Roger Thomson
Title: Managing Director
DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL
By: /s/ E. M. Riche
-------------------------------
Name: E. M. Riche
Title: Managing Director
37
EXHIBIT A
[Principal Amount]
DONALDSON, LUFKIN & JENRETTE, INC.
MEDIUM-TERM NOTES
TERMS AGREEMENT
____________ ___, 200_
DONALDSON, LUFKIN & JENRETTE, INC.
277 Park Avenue
New York, New York 10172
Attention:
Re: Distribution Agreement dated as of
March 15, 2000 (the "Distribution Agreement")
The undersigned agrees to purchase Medium-Term Notes having the
following terms:
38
FLOATING RATE FIXED RATE AMORTIZING DUAL CURRENCY
ALL NOTES: NOTES: NOTES: NOTES: NOTES: INDEXED NOTES:
- ---------- ------------- ---------- ---------- ------------- --------------
Principal Amount: Interest Rate Basis or Interest Rate: % Amortization
Bases: Schedule Face Amount Currency: Index Currency:
Purchase If LIBOR: Face Amount: Currency Base Rate:
Price: % [ ] LIBOR Reuters
[ ] LIBOR Telerate
Settlement Date Index Maturity: Optional Payment Currency: Determination Agent:
and Time:
Place of Delivery: Spread (plus Designated Exchange Rate:
or minus): %
Original Issue Spread Option Election Date(s):
Date: Multiplier: %
Specified Currency: Initial Interest Option Value Calculation
[ ] U.S. dollars Rate: % Agent:
[ ] Other:
Authorized Initial Interest
Denomination: Reset Date:
[ ] $1,000 and Interest Reset
integral multiples Date(s)
thereof
[ ] Other:
Maturity Date: Maximum Interest
Rate: %
Interest Minimum Interest
Payments Date(s): Rate: %
2
FLOATING RATE FIXED RATE AMORTIZING DUAL CURRENCY
ALL NOTES: NOTES: NOTES: NOTES: NOTES: INDEXED NOTES:
- ---------- ------------- ---------- ---------- ------------- --------------
Optional Repayment INTEREST
Date(s): CATEGORY:
Initial Redemption [ ] Regular Floating
Date: Rate Note
[ ] Floating Rate/Fixed
Initial Redemption Rate Note
Percentage: % Fixed Rate
Commencement
Annual Redemption Date:
Percentage Fixed Rate
Reduction: % Interest: %
[ ] Inverse Floating
[ ] Original Issue Rate Note
Discount Note Fixed Interest
Issue Price: % Rate:
[ ] Original Issue
Exchange Rate Discount Note
Agent: Issue Price:
Other Provisions:
3
[The certificate referred to in Section 6(e) of the Distribution
Agreement and the opinions referred to in Sections 6(b) and 6(c) of the
Distribution Agreement will be required.]
The provisions of Sections 1, 2(b) and 2(d) and 4 through 7, 10, 11,
12 and 15 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
This Agreement is subject to termination in our absolute discretion on
the terms incorporated by reference herein. If this Agreement is so terminated,
the provisions set forth in the last sentence of Section 8 of the Distribution
Agreement shall survive for the purposes of this Agreement.
[NAME OF AGENT(S)]
By
-------------------------------
Name:
Title:
Accepted:
DONALDSON, LUFKIN & JENRETTE, INC.
By
---------------------------------------
Name:
Title:
4
EXHIBIT B
DONALDSON, LUFKIN & JENRETTE, INC.
MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
--------------------------------------
The Medium-Term Notes (the "Notes"), are to be offered on a continuous
basis by Donaldson, Lufkin & Jenrette, Inc. (the "Company"). Donaldson, Lufkin
& Jenrette Securities Corporation and Donaldson, Lufkin & Jenrette
International (each an "Agent", and together with any additional agents
appointed from time to time pursuant to Section 13 of the Agreement (as defined
herein), the "Agents") have agreed to solicit offers to purchase the Notes in
registered form. The Notes are being sold pursuant to a Distribution Agreement
dated as of March 15, 2000 (the "Agreement") between the Company and the
Agents. In the Agreement, each Agent has agreed to use its reasonable efforts
to solicit purchases of the Notes. Each Agent, as principal, may purchase Notes
for its own account and if it does so, the Company and such Agent will enter
into a terms agreement (each, a "Terms Agreement"), as contemplated by the
Agreement.
The Notes will be issued under an Indenture dated as of June 8, 1998
(the "Indenture") between the Company and The Chase Manhattan Bank, as trustee
(the "Trustee"). The Chase Manhattan Bank (the "Bank") will be the Registrar,
Calculation Agent, Authenticating Agent and Paying Agent for the Notes, and
will perform the duties specified herein. Each Note will bear interest at
either a fixed rate (the "Fixed Rate Notes"), or a floating rate (the "Floating
Rate Notes"). The Notes will be issued in U.S. dollars or other currencies,
currency units or composite currencies (the "Specified Currency"). Each Note
will be represented by either a Global Security (as defined below) delivered to
the Bank, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC (a "Book-Entry Note") or a certificate
issued in definitive form delivered to the holder thereof or a person
designated by such holder (a "Certificated Note"). Certificated Notes will not
be exchangeable for Book-Entry Notes, and
B-5
Book-Entry Notes will not be exchangeable for and will not otherwise be
issuable as Certificated Notes except in limited circumstances.
Book-Entry Notes will be issued in accordance with the administrative
procedures set forth in Part I hereof as they may subsequently be amended as
the result of changes in DTC's operating procedures, and Certificated Notes
will be issued in accordance with the administrative procedures set forth in
Part II hereof. Unless otherwise defined herein, terms defined in the Indenture
or the Notes shall be used herein as therein defined.
B-6
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Bank 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 Bank to DTC, dated as of the date of the Agreement
(the "Letter of Representation"), and a Medium-Term Note Certificate Agreement
between the Bank and DTC, dated as of December 2, 1988, and its obligations as
a participant in DTC, including DTC's Same-Day Funds Settlement System
("SDFS").
B-7
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry Notes,
the Company will issue a single global security in
fully registered form without coupons (a "Global
Security") representing up to U.S. $400,000,000
principal amount (or, if the Specified Currency is
other than U.S. dollars, the equivalent thereof in such
Specified Currency) of all such Notes that have the
same Purchase Price, Settlement Date, Maturity Date,
redemption or repayment provisions, Interest Payment
Date(s), Original Issue Date, original issue discount
provisions (if any), and, in the case of Fixed Rate
Notes, Interest Rate, modified payment upon redemption,
repayment or acceleration (if any), amortization
schedule (if any) or, in the case of Floating Rate
Notes, Initial Interest Rate, Interest Payment Period,
Calculation Agent, Interest Rate Basis, Index Maturity,
Interest Reset Period, Interest Reset Dates, Spread or
Spread Multiplier (if any), Alternate Rate Event Spread
(if any), Minimum Interest Rate (if any) and Maximum
Interest Rate (if any), Index currency (if any) and, in
each case, any other relevant terms (collectively
"Terms"). Each Global Security will be dated and issued
as of the date of its authentication by the Bank. Each
Global Security will bear an "Interest Accrual Date,"
which will be (i) with respect to any Global Security
(or any portion thereof) issued on any date of
settlement, its original issuance date and (ii) with
respect to any Global Security (or any portion thereof)
issued subsequently upon exchange of a Global Security,
or in lieu of a destroyed, lost or stolen Global
Security, the most recent Interest Payment Date to
which interest had been paid or duly provided for on
the predecessor Global Security or Securities (or if no
such payment or provision has been made, the original
issuance date of the predecessor Global Security),
regardless of the date of authentication of such
subsequently issued Global Security. No Global Security
will represent (i) both Fixed Rate and Floating Rate
Book-Entry Notes or (ii) any Certificated Note.
B-8
The Company has arranged with the CUSIP Numbers Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of a series of
approximately 900 CUSIP numbers (including tranche
numbers) for assignment to the Global Securities
representing the Book-Entry Notes. The Company has
obtained from the CUSIP Service Bureau a written list of
each series of reserved CUSIP numbers and has delivered
to the Bank and DTC the written list of 900 CUSIP
numbers of such series. The Bank will assign CUSIP
numbers to Global Securities as described below under
Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that
the Bank has assigned to Global Securities. At any time
when fewer than 100 of the reserved CUSIP numbers of
either series remain unassigned to Global Securities,
the Bank shall so advise the Company and, if it deems
necessary, the Company will reserve additional CUSIP
numbers for assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list of such
additional CUSIP numbers to the Bank and DTC.
Registration: Each Global Security will be registered in the name of
Cede & Co., as nominee for DTC, on the Security register
maintained under the Indenture. The beneficial owner of
a Book-Entry Note (or one or more indirect participants
in DTC designated by such owner) will designate one or
more participants in DTC with respect to such Book-Entry
Note (the "Participants") to act as agent or agents for
such owner in connection with the book-entry system
maintained by DTC, and DTC will record in book-entry
form, in accordance with instructions provided by such
Participants, a credit balance with respect to such
beneficial owner in such Note in the account of such
Participants. The ownership interest of such beneficial
owner in such Note will be recorded through the records
of such Participants or through the separate records of
such Participants and one or more indirect participants
in DTC.
B-9
Transfers: Transfers of a Book-Entry Note will be accompanied by
book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect participants
in DTC) acting on behalf of beneficial transferors and
transferees of such Book-Entry Note.
Exchanges: The Bank may deliver to DTC and the CUSIP Service Bureau
at any time a written notice of consolidation specifying
(i) the CUSIP numbers of two or more Outstanding Global
Securities that represent Book-Entry Notes having the
same Terms and for which interest has been paid to the
same date, (ii) a date, occurring at least thirty days
after such written notice is delivered and at least
thirty days before the next Interest Payment Date for
such Book-Entry Notes, on which such Global Securities
shall be exchanged for a single replacement Global
Security and (iii) a new CUSIP number to be assigned to
such replacement Global Security. Upon receipt of such a
notice, DTC will send to its Participants (including the
Bank) a written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Bank will deliver to the
CUSIP Service Bureau a written notice setting forth such
exchange date and the new CUSIP number and stating that,
as of such exchange date, the CUSIP numbers of the
Global Securities to be exchanged will no longer be
valid. On the specified exchange date, the Bank will
exchange such Global Securities for a single Global
Security bearing the new CUSIP number and a new Interest
Accrual Date, and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed U.S.$400,000,000 (or,
if the Specified Currency is other than U.S. dollars,
the equivalent thereof in such Specified Currency) in
aggregate principal amount, one Global Security will be
authenticated and issued to represent each U.S.
$400,000,000 principal amount (or, if the Specified
Currency is other than U.S. dollars, the equivalent
thereof in such Specified Currency) of the exchanged
Global Security and an additional Global Security will
be authenticated and issued to represent any remaining
principal amount of such Global Securities (see
"Denominations" below).
B-10
Maturities: Each Book-Entry Note will mature on a date nine months or
more from its date of issue.
Currency: Book-Entry Notes will be denominated in U.S. dollars
unless otherwise specified in the applicable Pricing
Supplement.
Notice of Redemption The Bank will give notice to DTC prior to each redemption
and Repayment Dates: date or repayment date (as specified in the Note), if
any, at the time and in the manner set forth in the
Letter of Representation.
Denominations: Unless otherwise specified in the applicable Pricing
Supplement, Book-Entry Notes will be issued in
denominations of $1,000 (or, if the Specified Currency is
other than U.S. dollars, the minimum denomination thereof
specified in the applicable Pricing Supplement) or any
amount in excess thereof which is an integral multiple of
$1,000 (or, if the Specified Currency is other than U.S.
dollars, integral multiples of such minimum denomination
thereof specified in the applicable Pricing Supplement).
Global Securities will be denominated in principal
amounts not in excess of U.S. $400,000,000 (or, if the
Specified Currency is other than U.S. dollars, the
equivalent thereof in such Specified Currency). If one
or more Book-Entry Notes having an aggregate principal
amount in excess of U.S. $400,000,000 (or, if the
Specified Currency is other than U.S. dollars, the
equivalent thereof in such Specified Currency) would, but
for the preceding sentence, be represented by a single
Global Security, then one Global Security will be issued
to represent each U.S. $400,000,000 principal amount (or,
if the Specified Currency is other than U.S. dollars,
the equivalent thereof in such Specified Currency) of
such Book-Entry Note or Notes and an additional Global
Security will be issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities representing
such Book-Entry Note or Notes shall be assigned the
same CUSIP number.
B-11
Interest: General. Unless otherwise specified in the applicable
Pricing Supplement, interest on each Book-Entry Note
will accrue from the Interest Accrual Date of the Global
Security representing such Book-Entry Note. Each payment
of interest on a Book-Entry Note will include interest
accrued from and including the immediately preceding
Interest Payment Date in respect of which interest has
been paid or duly made available for payment (or from
and including the date of issue, if no interest has been
paid with respect to such Book-Entry Note) to but
excluding the related Interest Payment Date or the
Maturity Date, as the case may be. Interest payable at
the maturity or upon redemption or repayment of a
Book-Entry Note will be payable to the person to whom
the principal of such Note is payable. Standard & Poor's
Corporation will use the information received in the
pending deposit message described under Settlement
Procedure "C" below in order to include the amount of
any interest payable and certain other information
regarding the related Global Security in the appropriate
weekly bond report published by Standard & Poor's
Corporation.
Record Dates. Unless otherwise specified in the
applicable Pricing Supplement, the Record Date with
respect to any Interest Payment Date shall be the
fifteenth calendar day (whether or not a Business Day)
immediately preceding such Interest Payment Date.
B-12
Fixed Rate Book-Entry Notes. Interest Payment Dates for
Fixed Rate Book-Entry Notes will be as specified in the
applicable Pricing Supplement; provided that, in
addition to other amounts due and payable on any
Maturity Date, interest accrued from and including the
immediately preceding Interest Payment Date shall be
paid on such Maturity Date. In the event that any
Interest Payment Date or Maturity Date for a Fixed Rate
Book-Entry Note is not a Business Day, the payment due
on such day shall be made on the next succeeding
Business Day and no interest shall accrue on such
payment for the period from and after such Interest
Payment Date or Maturity Date to such next succeeding
Business Day. The first payment of interest on any Fixed
Rate Book-Entry Note issued between a Record Date and an
Interest Payment Date will be made on the Interest
Payment Date following the next succeeding Record Date.
Floating Rate Book-Entry Notes. Except as provided in
the applicable Pricing Supplement, interest will be
payable in the case of Floating Rate Book-Entry Notes
which reset (i) daily, weekly or monthly, on a Business
Day that occurs in each month or that occurs in each
third month, as specified in the applicable Pricing
Supplement; (ii) quarterly, on a Business Day that
occurs in each third month, as specified in the
applicable Pricing Supplement; (iii) semiannually, on a
Business Day that occurs in each of two months of each
year, as specified in the applicable Pricing Supplement;
and (iv) annually, on a Business Day that occurs in one
month of each year, as specified in the applicable
Pricing Supplement (each, an "Interest Payment Date"),
and, in each case, on the Maturity Date. If an Interest
Payment Date for Floating Rate Book-Entry Notes would
otherwise be a day that is not a Business Day, such
Interest Payment Date will be the next succeeding
Business Day and no interest shall accrue for the period
from and after such Interest Payment Date, except that
if such Note is a LIBOR Note and such Business Day falls
in the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding Business
Day. In the case of a Floating Rate Book-Entry Note
issued between a Record Date and an Interest Payment
Date, the first interest payment will be made on the
Interest Payment Date following the next succeeding
Record Date.
B-13
Notice of Interest Payment and Record Dates. On the
first Business Day of January, April, July and October
of each year, the Bank will deliver to the Company and
DTC a written list of Record Dates and Interest Payment
Dates that will occur with respect to Book-Entry Notes
during the three-month period beginning on such first
Business Day.
Calculation Fixed Rate Book-Entry Notes. Unless otherwise specified
of Interest: in the applicable Pricing Supplement, interest on Fixed
Rate Book-Entry Notes (including interest for partial
periods) will be calculated on the basis of a 360-day
year of twelve 30-day months.
Floating Rate Book-Entry Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest
rates on Floating Rate Book-Entry Notes will be
determined as set forth in the form of such Notes.
Interest on Floating Rate Book-Entry Notes will be
calculated on the basis of actual days elapsed and a year
of 360 days except that in the case of Treasury Rate
Notes, interest will be calculated on the basis of the
actual number of days in the year.
Payments of Principal Payments of Interest. Promptly after each Record Date,
and Interest: the Bank will deliver to the Company and DTC a written
notice specifying by CUSIP number the amount of
interest to be paid on each Global Security other than
an Amortizing Note on the following Interest Payment
Date (other than an Interest Payment Date coinciding
with maturity or any earlier redemption or repayment
date) and the total of such amounts. DTC will confirm
the amount payable on each such Global Security on such
Interest Payment Date by reference to the daily bond
reports published by Standard & Poor's Corporation. In
the case of Amortizing Notes, the Bank will provide
separate written notice to DTC prior to each Interest
Payment Date at the time and in the manner set forth in
the Letter of Representation. The Company will pay to
the Bank, as paying agent, the total amount of interest
due on such Interest Payment Date (and, in the case of
an Amortizing Note, principal and interest) (other than
at maturity), and the Bank will pay such amount to DTC
at the times and in the manner set forth below under
"Manner of Payment."
B-14
Payments at Maturity or Upon Redemption or Repayment. On
or about the first Business Day of each month, the Bank
will deliver to the Company and DTC a written list of
principal and interest to be paid on each Global
Security other than an Amortizing Note maturing either
at maturity or on a redemption or repayment date in the
following month. The Company and DTC will confirm the
amounts of such principal and interest payments with
respect to each such Global Security on or about the
fifth Business Day preceding the Maturity Date or
redemption or repayment date of such Global Security. In
the case of Amortizing Notes, the Bank will provide
separate written notice to DTC prior to the Maturity
Date and any redemption or repayment date, as the case
may be, at the times and in the manner set forth in the
Letter of Representation. The Company will pay to the
Bank, as the paying agent, the principal amount of such
Global Security, together with interest due at such
Maturity Date or redemption or repayment date. The Bank
will pay such amounts to DTC at the times and in the
manner set forth below under "Manner of Payment." If any
Maturity Date or redemption or repayment date of a
Global Security representing Book-Entry Notes is not a
Business Day, the payment due on such day shall be made
on the next succeeding Business Day with respect to such
Book-Entry Note. No interest shall accrue for the period
from and after the Maturity Date or redemption or
repayment date to such next succeeding Business Day.
Promptly after payment to DTC of the principal and
interest due on the Maturity Date or redemption or
repayment date of such Global Security, the Bank will
cancel such Global Security in accordance with the terms
of the Indenture and deliver it to the Company with a
certificate of cancellation.
B-15
Manner of Payment. Payments on Global Securities
denominated in U.S. dollars will be made in the manner
described below. Payments on Global Securities
denominated in a Specified Currency, other than U.S.
dollars will be made in accordance with DTC's
"Issuing/Paying Agent General Operating Procedures and
Participant Terminal System Procedures for Medium-Term
Notes (MTNs) Including Deposit Notes and Medium-Term
Bank Notes," subject, further, to the provisions of the
Notes. The total amount of any principal and interest
due on Global Securities on any Interest Payment Date or
at maturity or upon redemption or repayment shall be
paid by the Company to the Bank in funds available for
immediate use by the Bank not later than 9:30 A.M. (New
York City time) on such date. The Company will make such
payment on such Global Securities by instructing the
Bank to withdraw funds from an account maintained by the
Company at the Bank. The Company will confirm such
instructions in writing to the Bank. Payment shall be
made prior to 10:00 A.M. (New York City time) or as soon
thereafter as practicable, on each Maturity Date or
redemption or repayment date or, if either such date is
not a Business Day, as soon as possible thereafter, the
Bank will pay by separate wire transfer (using Fedwire
message entry instructions in a form previously
specified by DTC) to an account at the Federal Reserve
Bank of New York previously specified by DTC, in funds
available for immediate use by DTC, each payment of
principal (together with interest thereon) due on Global
Securities on any Maturity Date or redemption or
repayment date. On each Interest Payment Date or, if any
such date is not a Business Day, as soon as possible
thereafter, interest payments and, in the case of
Amortizing Notes, interest and principal payments shall
be made to DTC in same day funds in accordance with
existing arrangements between the Bank and DTC.
Thereafter on each such date, DTC will pay, in
accordance with its SDFS operating procedures then in
effect, such amounts in funds available for immediate
use to the respective Participants in whose names the
Book-Entry Notes represented by such Global Securities
are recorded in the book-entry system maintained by DTC.
Neither the Company nor the Bank shall have any
responsibility or liability for the payment by DTC to
such Participants of the principal of and interest on
the Book-Entry Notes.
B-16
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in DTC
or other person responsible for forwarding payments
directly to the beneficial owner of such Note.
Preparation If any order to purchase any Book-Entry Notes is accepted
of Pricing Supplement: by or on behalf of the Company, the Company will prepare
a pricing supplement (a "Pricing Supplement") reflecting
the terms of such Note and will arrange to file such
Pricing Supplement with the Commission in accordance
with the applicable paragraph of Rule 424 under the
Securities Act and will deliver the number of copies of
such Pricing Supplement to the relevant Agent as such
Agent shall request by the close of business on the
following Business Day. The relevant Agent will cause
such Pricing Supplement to be delivered to the purchaser
of the Note. In each instance that a Pricing Supplement
is prepared, the Agents receiving such Pricing
Supplement will affix the Pricing Supplement to
Prospectuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which they are
attached (other than those retained for files), will be
destroyed.
Settlement: The receipt by the Company of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Note shall constitute "settlement"
with respect to such Note. All orders accepted by the
Company will be settled on the third Business Day
pursuant to the timetable for settlement set forth below
unless the Company and the purchaser agree to settlement
on another day, which shall be no earlier than the next
Business Day.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Note sold by the Company to or through an Agent shall be
as follows:
A. The relevant Agent will advise the
Company by facsimile transmission or telephone
that such Note is a Book-Entry Note and of the
following settlement information:
1. Principal amount.
B-17
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry Note, the
Interest Rate, whether such Note is an
Amortizing Note and, if so, the amortization
schedule, or, in the case of a Floating Rate
Book-Entry Note, the Initial Interest Rate (if
known at such time), Interest Payment Dates,
Interest Payment Period, Calculation Agent,
Interest Rate Basis, Index Maturity, Interest
Reset Period, Initial Interest Reset Date,
Interest Reset Dates, Spread or Spread Multiplier
(if any), Minimum Interest Rate (if any) and
Maximum Interest Rate (if any).
4. Redemption or repayment provisions, if any.
5. Settlement date and time.
6. Price.
7. The Specified Currency
8. Agent's commission, if any, determined as
provided in the Agreement.
9. Whether the Note is an Indexed Note, and if it is
an Indexed Note, the Indexed Currency, the
Currency Interest Rate Basis and the
Determination Agent.
10. Whether the Note is a Dual Currency Note, and if
it is a Dual Currency Note, the Face Amount
Currency, the Optional Payment Currency, the
Designated Exchange Rate, the Option Election
Dates and the Option Value Calculation Agent.
11. Whether the Note is a Renewable Note, and if it
is a Renewable Note, the Initial Maturity Date,
the Final Maturity Date, the Election Dates and
the Maturity Extension Dates.
12. Whether the Company has the option to extend
the Original Maturity Date of the Note, and if so,
the Final Maturity Date of such Note.
B-18
13. Whether the Note is an OID Note, and if it is an
OID Note, the total amount of OID, the yield to
maturity, the initial accrual period OID and the
applicability of Modified Payment upon
Acceleration (and, if so, the Issue Price).
14. Any other applicable Terms.
B. The Company will advise the Bank by telephone or
electronic transmission (confirmed in writing at any
time on the same date) of the information set forth in
Settlement Procedure "A" above. The Bank will then
assign a CUSIP number to the Global Security
representing such Note and will notify the Company and
the Agent of such CUSIP number by telephone as soon as
practicable.
C. The Bank will enter a pending deposit message through
DTC's Participant Terminal System, providing the
following settlement information to DTC, the relevant
Agent and Standard & Poor's Corporation:
1. The information set forth in Settlement
Procedure "A".
2. The Initial Interest Payment Date for such Note,
the number of days by which such date succeeds
the related DTC Record Date (which in the case
of Floating Rate Notes which reset daily or
weekly, shall be the date five calendar days
immediately preceding the applicable Interest
Payment Date and, in the case of all other Notes,
shall be the Record Date as defined in the Note)
and, if known, the amount of interest payable on
such Initial Interest Payment Date.
3. The CUSIP number of the Global Security
representing such Note.
4. Whether such Global Security will represent any
other Book-Entry Note (to the extent known at
such time).
5. Whether such Note is an Amortizing Note (by an
appropriate notation in the comments field of
DTC's Participant Terminal System).
B-19
6. The number of Participant accounts to be
maintained by DTC on behalf of the Agents and
the Bank.
D. The Bank will complete and authenticate the Global
Security representing such Note.
E. DTC will credit such Note to the Bank's participant
account at DTC.
F. The Bank will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to
(i) debit such Note to the Bank's participant
account and credit such Note to the relevant Agent's
participant account and (ii) debit such Agent's
settlement account and credit the Bank's settlement
account for an amount equal to the price of such
Note less such Agent's commission, if any. The entry
of such a deliver order shall constitute a
representation and warranty by the Bank to DTC that
(a) the Global Security representing such Book-Entry
Note has been issued and authenticated and (b) the
Bank is holding such Global Security pursuant to the
Medium Term Note Certificate Agreement between the
Bank and DTC.
G. Unless the relevant Agent purchased such Note as
principal, such Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to such
Agent's participant account and credit such Note to
the participant accounts of the Participants with
respect to such Note 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 Note.
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.
B-20
I. With respect to Notes denominated in U.S. dollars,
the Bank will credit to the U.S. dollar account of
the Company maintained at a bank located in New York
City (or with respect to Notes payable in a
Specified Currency other than U.S. dollars, to a
bank notified to such Agent from time to time in
writing, which bank shall be located outside the
United Kingdom in the case of Notes payable in a
Specified Currency other than pounds sterling and
which mature not later than five years from and
including the date of issue thereof), notified to
the Bank from time to time in writing, in funds
available for immediate use in the amount
transferred to the Bank, in accordance with
Settlement Procedure "F".
J. Unless the relevant Agent purchased such Note as
principal, such Agent will confirm the purchase of
such Note to the purchaser either by transmitting to
the Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
K. Quarterly, the Bank will send to the Company a
statement setting forth the principal amount of
Notes outstanding as of that date under the
Indenture and setting forth a brief description
of any sales of which the Company has advised the
Bank but which have not yet been settled.
B-21
Settlement Procedures For sales by the Company of Book-Entry Notes to or
Timetable: through an Agent for settlement on the first Business Day
after the sale date, Settlement Procedures "A" through
"J" set forth above shall be completed as
soon as possible but not later than the
respective times (New York City time) set
forth below:
Settlement
Procedure Time
--------------
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on settlement date
E 10:00 A.M. on settlement date
F-G 2:00 P.M. on settlement date
H 4:45 P.M. on settlement date
I-J 5:00 P.M. on settlement date
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedures "A",
"B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M., 12 Noon
and 2:00 P.M., respectively, on the first Business
Day after the sale date. If the Initial Interest
Rate for a Floating Rate Book-Entry Note has not
been determined at the time that Settlement
Procedure "A" is completed, Settlement Procedure "B"
and "C" shall be completed as soon as such rate has
been determined but no later than 12 Noon and 2:00
P.M., respectively, on the second Business Day
before 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 Note is rescheduled or
cancelled, the Bank, after receiving notice from the
Company or the Agent, will deliver to DTC, through
DTC's Participant 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.
B-22
Failure to Settle: If the Bank fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to
Settlement Procedure "F", the Bank may deliver to
DTC, through DTC's Participant Terminal System, as
soon as practicable a withdrawal message instructing
DTC to debit such Note to the Bank's participant
account, provided that the Bank's participant
account contains a principal amount of the Global
Security representing such Note 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 Notes represented by a Global
Security, the Bank will mark such Global Security
"cancelled," make appropriate entries in the Bank's
records and send such cancelled Global Security to
the Company. The CUSIP number assigned to such
Global Security shall, in accordance with CUSIP
Service Bureau procedures, be cancelled and not
immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all,
of the Book-Entry Notes represented by a Global
Security, the Bank will exchange such Global
Security for two Global Securities, one of which
shall represent such Book-Entry Note or Notes and
shall be cancelled immediately after issuance and
the other of which shall represent the remaining
Book-Entry Notes 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 Note is not
timely paid to the Participants with respect to such Note
by the beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and, in
turn, the relevant Agent may enter SDFS deliver
orders through DTC's Participant Terminal System
reversing the orders entered pursuant to Settlement
Procedures "F" and "G", respectively. Thereafter,
the Bank will deliver the withdrawal message and
take the related actions described in the preceding
paragraph.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any
actions in accordance with its SDFS operating procedures
then in effect.
B-23
In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes to
have been represented by a Global Security, the Bank
will provide, in accordance with Settlement
Procedures "D" and "F", for the authentication and
issuance of a Global Security representing the
Book-Entry Notes to be represented by such Global
Security and will make appropriate entries in its
records.
Bank Not to Risk Funds: Nothing herein shall be deemed to require the Bank
to risk or expend its own funds in connection with
any payments to the Company, the Agents, DTC or any
holders of Notes, it being understood by all parties
that payments made by the Bank to the Company, the
Agents, DTC or any holders of Notes shall be made
only to the extent that funds are provided to the
Bank for such purpose.
B-24
PART II: ADMINISTRATIVE PROCEDURES FOR
CERTIFICATED NOTES
The Bank will serve as registrar in connection with the Certificated Notes.
Issuance: Each Certificated Note will be dated and issued as
of the date of its authentication by the Bank. Each
Certificated Note will bear an Original Issue Date,
which will be (i) with respect to any Certificated
Note (or any portion thereof) issued on any date of
settlement, such date of settlement and (ii) with
respect to any Certificated Note (or portion
thereof) issued subsequently upon transfer or
exchange of a Certificated Note or in lieu of a
destroyed, lost or stolen Certificated Note, the
original issuance date of the predecessor
Certificated Note, regardless of the date of
authentication of such subsequently issued
Certificated Note.
Registration: Certificated Notes will be issued only in fully
registered form without coupons.
Transfers and A Certificated Note may be presented for transfer or
Exchanges: exchange at the corporate trust office of the Bank.
Certificated Notes will be exchangeable for other
Certificated Notes having identical terms but
different denominations without service charge.
Certificated Notes will not be exchangeable for
Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date nine
months or more from its date of issue.
Currency: Certificated Notes will be denominated in U.S.
dollars unless otherwise specified in the applicable
Pricing Supplement.
Denominations: Unless otherwise specified in the applicable Pricing
Supplement, Certificated Notes will be issued in
principal amounts of $1,000 (or, if the Specified
Currency is other than U.S. dollars, the minimum
denomination thereof specified in the applicable Pricing
Supplement), or any amount in excess thereof which is an
integral multiple of $1,000 (or, if the Specified
Currency is other than U.S. dollars, integral multiples
of such minimum denomination thereof specified in the
applicable Pricing Supplement).
B-25
Interest: General. Interest on each Certificated Note will
accrue from the Original Issue Date of such Note for
the first interest period and from the most recent
date to which interest has been paid for all
subsequent interest periods. Unless otherwise
specified in the applicable Pricing Supplement, each
payment of interest on a Certificated Note will
include interest accrued from and including the
immediately preceding Interest Payment Date to but
excluding the related Interest Payment Date or the
Maturity Date, as the case may be.
Record Dates. Unless otherwise specified in the
applicable Pricing Supplement, the Record Date with
respect to any Interest Payment Date shall be the
fifteenth calendar day (whether or not a Business
Day) immediately preceding such Interest Payment
Date.
Fixed Rate Certificated Notes. Interest Payment
Dates for Fixed Rate Certificated Notes will be made
on the dates specified in the applicable Pricing
Supplement; provided that, in addition to other
amounts due and payable on any Maturity Date,
interest accrued from and including the immediately
preceding Interest Payment Date shall be paid on
such Maturity Date. In the event that any Interest
Payment Date or Maturity Date for a Fixed Rate
Certificated Note is not a Business Day, the payment
due on such day shall be made on the next succeeding
Business Day, and no interest shall accrue on such
payment for the period from and after such Interest
Payment Date or Maturity Date to such next
succeeding Business Day. The first payment of
interest on any Fixed Rate Certificated Note issued
between a Record Date and an Interest Payment Date
will be made on the Interest Payment Date following
the next succeeding Record Date.
B-26
Floating Rate Certificated Notes. Except as provided
in the applicable Pricing Supplement, interest will
be payable in the case of Floating Rate Certificated
Notes which reset (i) daily, weekly or monthly, on a
Business Day that occurs in each month or that
occurs in each third month, as specified in the
applicable Pricing Supplement; (ii) quarterly, on a
Business Day that occurs in each third month, as
specified in the applicable Pricing Supplement;
(iii) semiannually, on a Business Day that occurs in
each of two months of each year, as specified in the
applicable Pricing Supplement; and (iv) annually, on
a Business Day that occurs in one month of each
year, as specified in the applicable Pricing
Supplement (each, an "Interest Payment Date"), and,
in each case, on the Maturity Date. If an Interest
Payment Date for Floating Rate Certificated Notes
would otherwise be a day that is not a Business Day,
such Interest Payment Date will be the next
succeeding Business Day and no interest shall accrue
for the period from and after such Interest Payment
Date, except that if such Note is a LIBOR Note and
such Business Day falls in the next succeeding
calendar month, such Interest Payment Date will be
the immediately preceding Business Day. In the case
of a Floating Rate Certificated Note issued between
a Record Date and an Interest Payment Date, the
first interest payment will be made on the Interest
Payment Date following the next succeeding Record
Date.
Calculation of Fixed Rate Certificated Notes. Unless otherwise specified
Interest: in the applicable Pricing Supplement, interest on
Fixed Rate Certificated Notes (including interest
for partial periods) will be calculated on the basis
of a 360-day year of twelve 30-day months.
Floating Rate Certificated Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest
rates on Floating Rate Certificated Notes will be
determined as set forth in the form of such Notes.
Interest on Floating Rate Certificated Notes will be
calculated on the basis of actual days elapsed and a
year of 360 days except that in the case of Treasury
Rate Notes, interest will be calculated on the basis of
the actual number of days in the year.
B-27
Payments of Principal Payments on Certificated Notes denominated in U.S.
and Interest: dollars will be made in the manner described below.
Payments on Certificated Notes denominated in a
Specified Currency other than U.S. dollars will be
made in the manner described below, except as
otherwise provided in the Notes. The Bank will pay
the principal amount of each Certificated Note at
maturity or upon redemption or repayment upon
presentation and surrender of such Note to the Bank.
Such payment, together with payment of interest due
at maturity or upon redemption or repayment of such
Note, will be made in funds available for immediate
use by the Bank and in turn by the holder of such
Note. Certificated Notes presented for payment to
the Bank at maturity or upon redemption or repayment
will be cancelled by the Bank and delivered to the
Company with a certificate of cancellation. All
interest payments on a Certificated Note (other than
interest due at maturity or upon redemption or
repayment) will be made by check drawn on the Bank
(or another person appointed by the Bank) and mailed
by the Bank to the person entitled thereto as
provided in such Note and the Indenture; provided,
however, that the holder of U.S. $5,000,000 (or, if
the Specified Currency is other than U.S. dollars,
the equivalent thereof in such Specified Currency)
or more in aggregate principal amount of
Certificated Notes (having identical terms and
provisions) will be entitled to receive payments of
interest by wire transfer of immediately available
funds to an account maintained by the holder within
the United States. Following each Record Date, the
Bank will furnish the Company with a list of
interest payments to be made on the following
Interest Payment Date for each Certificated Note and
in total for all Certificated Notes. Interest at
maturity or upon redemption or repayment will be
payable to the person to whom the payment of
principal is payable. The Bank will provide monthly
to the Company lists of principal and interest, to
the extent ascertainable, to be paid on Certificated
Notes maturing or to be redeemed in the next month.
The Bank will be responsible for withholding taxes
on interest paid on Certificated Notes as required
by applicable law.
B-28
If the Maturity Date or redemption or repayment date
of a Certificated Note is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue
on such payment for the period from and after such
Interest Payment Date, Maturity Date or redemption
or repayment date, as the case may be.
Preparation of Pricing If any order to purchase a Certificated Note is
Supplement: accepted by or on behalf of the Company, the Company
will prepare a pricing supplement (a "Pricing
Supplement") reflecting the terms of such Note and
will arrange to file such Pricing Supplement with
the Commission in accordance with the applicable
paragraph of Rule 424 under the Securities Act and
will deliver the number of copies of such Pricing
Supplement to the relevant Agent as such Agent shall
request by the close of business on the following
Business Day. The relevant Agent will cause such
Pricing Supplement to be delivered to the purchaser
of the Note. In each instance that a Pricing
Supplement is prepared, the Agents receiving such
Pricing Supplement will affix the Pricing Supplement
to Prospectuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which they are
attached (other than those retained for files), will
be destroyed.
Settlement: The receipt by the Company of immediately available
funds in exchange for an authenticated Certificated
Note delivered to the relevant Agent and such
Agent's delivery of such Note against receipt of
immediately available funds shall constitute
"settlement" with respect to such Note. All offers
accepted by the Company will be settled on or before
the third Business Day next succeeding the date of
acceptance pursuant to the timetable for settlement
set forth below, unless the Company and the
purchaser agree to settlement on another date.
Settlement Procedures: Settlement Procedures with regard to each Certificated
Note sold by the Company to or through an Agent shall be
as follows:
A. The relevant Agent will advise the
Company by facsimile transmission or
telephone that such Note is a
Certificated Note and of the
following settlement information:
B-29
1. Name in which such Note is to be registered
("Registered Owner").
2. Address of the Registered Owner and address for
payment of principal and interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate Certificated Note,
the Interest Rate, the applicability of Annual
Interest Payments and whether such Note is an
Amortizing Note and, if so, the amortization
schedule, or, in the case of a Floating Rate
Certificated Note, the Initial Interest Rate
(if known at such time), Interest Payment
Dates, Interest Payment Period, Calculation
Agent, Interest Rate Basis, Index Maturity,
Interest Reset Period, Interest Reset Dates,
Spread or Spread Multiplier (if any), Minimum
Interest Rate (if any), Maximum Interest Rate
(if any), and the Alternate Rate Event Spread
(if any).
7. Redemption or repayment provisions, if any.
8. Settlement date and time.
9. Price.
10. Agent's commission, if any, determined as
provided in the Agreement.
11. Specified Currency
12. Denominations.
13. Whether the Note is an Indexed Note, and if it
is an Indexed Note, the Indexed Currency, the
Currency Interest Rate Basis and the
Determination Agent.
B-30
14. Whether the Note is a Dual Currency Note, and if
it is a Dual Currency Note, the Face Amount
Currency, the Optional Payment Currency, the
Designated Exchange Rate, the Option Election
Dates and the Option Value Calculation Agent.
15. If applicable, wire transfer instructions,
including name of banking institution where
transfer is to be made and account number.
16. Whether the Note is a Renewable Note, and if it
is a Renewable Note, the Initial Maturity Date,
the Final Maturity Date, the Election Dates and
the Maturity Extension Dates.
17. Whether the Company has the option to extend
the Original Maturity Date of the Note, and, if
so, the Final Maturity Date of such Note.
18. Whether the Note is an OID Note, and if it is
an OID Note, the total amount of OID, the yield
to maturity, the initial accrual period OID and
the applicability of Modified Payment upon
Acceleration (and, if so, the Issue Price).
19. Any other applicable terms.
B. The Company will advise the Bank by telephone
or electronic transmission (confirmed
in writing at any time on the sale
date) of the information set forth in
Settlement Procedure "A" above.
C. The Company will have delivered to
the Bank a pre-printed fourply packet for such
Note, which packet will contain the following
documents in forms that have been approved by
the Company, the relevant Agent and the Bank:
1. Note with customer confirmation.
2. Stub One - For the Bank.
3. Stub Two - For the relevant Agent.
4. Stub Three - For the Company.
B-31
D. The Bank will complete such Note and
authenticate such Note and deliver it (with the
confirmation) and Stubs One and Two to the
relevant Agent, and such Agent will acknowledge
receipt of the Note by stamping or otherwise
marking Stub One and returning it to the Bank.
Such delivery will be made only against such
acknowledgment of receipt and evidence that
instructions have been given by such Agent for
payment to the U.S. dollar account of the
Company maintained at the Bank, New York, New
York (or, with respect to Notes payable in a
Specified Currency other than U.S. dollars, to
an account maintained at a bank selected by the
Company which bank shall be located outside the
United Kingdom in the case of Notes payable in
a Specified Currency other than pounds sterling
that mature not later than five years from and
including the date of issue thereof) in funds
available for immediate use, of an amount equal
to the price of such Note less such Agent's
commission, if any. In the event that the
instructions given by such Agent for payment to
the account of the Company are revoked, the
Company will as promptly as possible wire
transfer to the account of such Agent an amount
of immediately available funds equal to the
amount of such payment made.
E. Unless the relevant Agent purchased such Note
as principal, such Agent will deliver such Note
(with confirmation) to the customer against
payment in immediately available funds. Such
Agent will obtain the acknowledgment of receipt
of such Note by retaining Stub Two.
B-32
F. The Bank will send Stub Three to the Company by
first-class mail. Periodically, the Bank will
also send to the Company a statement setting
forth the principal amount of the Notes
Outstanding as of that date under the Indenture
and setting forth a brief description of any
sales of which the Company has advised the Bank
but which have not yet been settled.
Settlement Procedures For sales by the Company of Procedures Certificated
Timetable: Notes to or through an Agent, Settlement
Procedures "A" through "F" set forth above
shall be completed on or before the respective
times (New York City time) set forth below:
Settlement
Procedure
----------
A 2:00 P.M. on day before settlement date
B 3:00 P.M. on day before settlement date
C-D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
Failure to Settle: If a purchaser fails to accept delivery of and
make payment for any Certificated Note, the
relevant Agent will notify the Company and the
Bank by telephone and return such Note to the
Bank. Upon receipt of such notice, the Company
will immediately wire transfer to the account
of such Agent an amount equal to the amount
previously credited thereto in respect of such
Note. Such wire transfer will be made on the
settlement date, if possible, and in any event
not later than the Business Day following the
settlement date. If the failure shall have
occurred for any reason other than a default by
such Agent in the performance of its
obligations hereunder and under the
Distribution Agreement with the Company, then
the Company will reimburse such Agent or the
Bank, as appropriate, on an equitable basis for
its loss of the use of the funds during the
period when they were credited to the account
of the Company. Immediately upon receipt of the
Certificated Note in respect of which such
failure occurred, the Bank will mark such Note
"cancelled," make appropriate entries in the
Bank's records and send such Note to the
Company.
B-33
Bank Not to Risk Nothing herein shall be deemed to require the
Funds: Bank to risk or expend its own funds in
connection with any payments to the Company,
the Agents, DTC or any holders of Notes, it
being understood by all parties that payments
made by the Bank to the Company, the Agents,
DTC or any holders of Notes shall be made only
to the extent that funds are provided to the
Bank for such purpose.
EXHIBIT C
[Letterhead of Purchaser]
_______, 200_
Donaldson, Lufkin & Jenrette, Inc.
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
This letter sets forth the terms and conditions upon which [name of
Purchaser] (the "Purchaser") proposes to purchase as principal from Donaldson,
Lufkin & Jenrette, Inc. (the "Company") the Medium-Term Notes (the "Purchased
Securities") of the Company described in Schedule I hereto and in the Company's
Prospectus dated March 6, 2000, as supplemented by the Prospectus Supplement
dated March 15, 2000 and Pricing Supplement No. [insert number] relating to the
Purchased Securities (collectively, the "Prospectus").
The Company acknowledges that it has entered into a Distribution
Agreement, dated March 15, 2000 (the "Distribution Agreement"), with Donaldson,
Lufkin & Jenrette Securities Corporation and Donaldson, Lufkin & Jenrette
International (each an "Agent", and together with any additional agents
appointed from time to time pursuant to Section 13 thereof, the "Agents"),
providing for the sale of its Medium-Term Notes due nine months or more from
date of issue to or through the Agents acting as principal or agent. The
Company represents and warrants to the Purchaser that the representations and
warranties of the Company made in the Distribution Agreement are true and
correct as though made on and as of the date hereof and will be true and
correct on and as of the Time of Delivery; provided, however, that the
following terms have the meanings indicated: (i) "Agent" means the Purchaser;
(ii) "this Agreement" means this letter and (iii) "Notes" means the Purchased
Securities.
The Company and the Purchaser further agree that the following
provisions of the Distribution Agreement shall be incorporated by reference
into and made a part of this letter with respect to the Purchased Securities,
as if the Purchaser were an Agent purchasing Notes as principal pursuant to a
Terms Agreement and this letter were a Terms Agreement (and the Purchaser were
the Agent signatory thereto): (i) Section 4, for so long as the Purchaser shall
be required to deliver a prospectus in connection with the Purchased
Securities; (ii) Section 5; (iii) Section 6; and (iv) Section 7.
B-35
Terms used herein without definition have the meanings specified in
the Distribution Agreement.
Very truly yours,
[NAME OF PURCHASER]
By:
-------------------------------------
` Name:
Title:
Agreed and accepted.
DONALDSON, LUFKIN & JENRETTE, INC.
By
---------------------------------------
Name:
Title:
B-36
Schedule I
Designation:
Principal Amount:
Issue Price:
Original Issue Date:
Interest rate and
other provisions: As described in the Prospectus
Purchase Price:
Time of Delivery:
Place of Delivery:
Manner of payment As described in the Administrative
and delivery: Procedures relating to [Book-Entry] [Certificated]
Notes or as otherwise agreed by the parties
Other Terms:
B-37