Exhibit 1(b)
DRAFT
12/7/94
AMERICAN HOME PRODUCTS CORPORATION
$3,500,000,000
Medium-Term Notes
Due from 9 Months to Years from Date of Issue
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U.S. DISTRIBUTION AGREEMENT
, 199
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[NAMES AND ADDRESSES OF AGENTS]
Dear Sirs:
American Home Products Corporation, a Delaware corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
and sale from time to time by the Company of up to $3,500,000,000 (or the
equivalent thereof in one or more foreign currencies or composite currencies)
aggregate initialoffering price of its medium-term notes due from 9 months to
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years from date of issue (the "Notes"). The Notes will be issued under an
Indenture dated as of April 10, 1992 between the Company and Chemical Bank (as
successor to Manufacturers Hanover Trust Company), as Trustee (the "Trustee"),
as supplemented by a Supplemental Indenture dated as of October 13, 1992 (the
"Indenture") and will have the maturities, interest rates, redemption
provisions, if any, and other terms as set forth in supplements to the Basic
Prospectus referred to below.
The Company hereby appoints [NAMES OF AGENTS] (individually, an "Agent"
and collectively, the "Agents") as its exclusive agents, subject to Section 12,
for the purpose of soliciting and receiving offers to purchase Notes from the
Company by others and, on the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, each Agent
agrees to use reasonable efforts to solicit and receive offers to purchase Notes
upon
terms acceptable to the Company at such times and in such amounts as the
Company shall from time to time specify. In addition, any Agent may also
purchase Notes as principal and, if requested by such Agent, the Company will
enter into a Terms Agreement relating to such sale (a "Terms Agreement") in
accordance with the provisions of Section 2(b) hereof.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Notes. Such registration statement, including the exhibits thereto, as amended
at the Commencement Date (as hereinafter defined), is hereinafter referred to as
the "Registration Statement." The Company proposes to file with the Commission
from time to time, pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"), supplements to the prospectus included in the
Registration Statement that will describe certain terms of the Notes. The
prospectus in the form in which it appears in the Registration Statement is
hereinafter referred to as the "Basic Prospectus." The term "Prospectus" means
the Basic Prospectus together with the prospectus supplement or supplements
(each a "Prospectus Supplement") specifically relating to Notes, as filed with,
or transmitted for filing to, the Commission pursuant to Rule 424. As used
herein, the terms "Basic Prospectus" and "Prospectus" shall include in each case
the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
1. Representations and Warranties. The Company represents and warrants
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to and agrees with each Agent as of the Commencement Date, as of each date on
which an Agent solicits offers to purchase Notes, 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 or otherwise), as of each date the
Company issues and delivers 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, warranties and agreements 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 become effective; no stop order
suspending the effectiveness of the Registration
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Statement is in effect, and no proceedings for such purpose are pending before
or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) the
Registration Statement, when it became effective, did not contain, and the
Registration Statement, 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, (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply at the time of such
amendment or supplement in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iv) the
Prospectus does not contain and, as amended or supplemented, if applicable, will
not contain at the time of such amendment or supplement 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 (1) the representations and warranties set
forth in this Section 1(b) do not apply (A) to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to an
Agent furnished to the Company in writing by such Agent expressly for use
therein or (B) to that part of the Registration Statement that constitutes the
Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee and (2) the
representations and warranties set forth in clauses (iii) and (iv) above, when
made as of the Commencement Date or as of any date on which an Agent solicits
offers to purchase Notes or on which the Company accepts an offer to purchase
Notes, 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 Basic Prospectus.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that
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the failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(d) Each Restricted Subsidiary (as defined in the Indenture) of the
Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(e) Each of this Agreement and any applicable Terms Agreement has been
duly authorized, executed and delivered by the Company.
(f) 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.
(g) The Notes have been duly authorized and, when executed and
authenticated in accordance with the Indenture and delivered to and duly paid
for by the purchasers thereof, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, enforceable in
accordance with their respective 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.
(h) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement, the Notes, the Indenture
and any applicable Terms Agreement will not contravene any material provision of
applicable law or the certificate of incorporation or by-laws of the Company or
any agreement or other instrument binding upon the Company or any of its
Restricted Subsidiaries that is material to
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the Company and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Company or any Restricted Subsidiary, and no consent, approval, authorization
or order of or qualification with any governmental body or agency is required
for the performance by the Company of its obligations under this Agreement, the
Notes, the Indenture and any applicable Terms Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Notes.
(i) There has not occurred any material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(j) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
Restricted Subsidiaries is a party or to which any of the properties of the
Company or any of its Restricted Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as required.
(k) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
Notwithstanding the foregoing, the representations and warranties set
forth in Section 1(b)(iii) and (iv), (g) (except as to the authorization of the
Notes) and (h), when made as of the Commencement Date, or as of any date on
which an Agent solicits offers to purchase Notes, with respect to any Notes the
payments of principal or interest on which will be determined by reference to
one or more currency exchange rates, commodity prices, equity indices or other
factors, shall be deemed not to address the application of the Commodity
Exchange Act, as amended, or the rules, regulations or interpretations of the
Commodity Futures Trading Commission.*
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* This paragraph could be deleted if the Company does not plan to issue indexed
Notes.
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2. Solicitations as Agent; Purchases as Principal.
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(a) Solicitations as Agent. In connection with an Agent's actions as agent
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hereunder, such Agent agrees to use reasonable efforts to solicit offers to
purchase Notes upon the terms and conditions set forth in the Prospectus as then
amended or supplemented.
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, the Agents will forthwith suspend
solicitations of offers to purchase Notes from the Company until such time as
the Company has advised the Agents that such solicitation may be resumed. While
such solicitation is suspended, the Company shall not be required to deliver any
certificates, opinions or letters in accordance with Sections 5(a), 5(b) and
5(c); provided, however, that if the Registration Statement or Prospectus is
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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 on the Notes
or for a change all Agents deem to be immaterial), no Agent shall be required to
resume soliciting offers to purchase Notes until the Company has delivered such
certificates, opinions and letters as such Agent may request.
The Company agrees to pay to 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 equal to the percentage set forth below of the purchase price of such
Note:
Term Commission Rate
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From 9 months to less than 1 year . %
From 1 year to less than 18 months . %
From 18 months to less than 2 years . %
From 2 years to less than 3 years . %
From 3 years to less than 4 years . %
From 4 years to less than 5 years . %
From 5 years to less than 6 years . %
From 6 years to less than 7 years . %
From 7 years to less than 10 years . %
From 10 years to less than 15 years . %
From 15 years to and including years . %
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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 Notes and may reject any offer in whole or in part.
Each Agent shall have the right to reject any offer to purchase Notes that it
considers to be unacceptable, and any such rejection shall not be deemed a
breach of its agreements contained herein. The procedural details relating to
the issue and delivery of Notes sold by the Agents as agents and the payment
therefor shall be as set forth in the Administrative Procedures (as hereinafter
defined).
(b) Purchases as Principal. Each sale of Notes to an Agent as principal
----------------------
shall be made in accordance with the terms of this Agreement and, if requested
by such Agent, the Company will enter into a Terms Agreement that will provide
for the sale of such Notes to and the purchase thereof by such Agent. Each
Terms Agreement will be substantially in the form of Exhibit A hereto but may
take the form of an exchange of any form of written telecommunication between
such Agent and the Company.
An Agent's commitment to purchase Notes as principal, whether pursuant to
a Terms Agreement or otherwise, shall be deemed to have been made on the basis
of the representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Each agreement by an
Agent to purchase Notes as principal (whether or not set forth in a Terms
Agreement) shall specify the principal amount of Notes to be purchased by such
Agent pursuant thereto, the maturity date of such Notes, the price to be paid to
the Company for such Notes, the interest rate and interest rate formula, if any,
applicable to such Notes and any other terms of such Notes. Each such agreement
shall also specify any requirements for officers' certificates, opinions of
counsel and letters from the independent public accountants of the Company
pursuant to Section 4 hereof. A Terms Agreement may also specify certain
provisions relating to the reoffering of such Notes by such Agent.
Each Terms Agreement shall specify the time and place of delivery of and
payment for such Notes. Unless otherwise specified in a Terms Agreement, the
procedural details relating to the issue and delivery of Notes purchased by an
Agent as principal and the payment therefor shall be as set forth in the
Administrative Procedures (as defined below). Each date of delivery of and
payment for Notes to be purchased by an Agent as principal, whether pursuant to
a Terms Agreement or otherwise, is referred to herein as a "Settlement Date."
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(c) Administrative Procedures. The Agents and the Company agree to
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perform the respective duties and obligations specifically provided to be
performed in the Medium-Term Notes Administrative Procedures (attached hereto as
Exhibit B) (the "Administrative Procedures"), as amended from time to time. The
Administrative Procedures may be amended only by written agreement of the
Company and the Agents.
(d) Delivery. The documents required to be delivered by Section 4 of
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this Agreement as a condition precedent to the Agents' obligations to begin
soliciting offers to purchase Notes as agents of the Company shall be delivered
at the office of Willkie Farr & Gallagher, counsel for the Agents, not later
than p.m., New York time, on the date hereof, or at such other time and/or
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place as the Agents and the Company may agree upon in writing, but in no event
later than the day prior to the earlier of (i) the date on which the Agents
begin soliciting offers to purchase Notes and (ii) the first date on which the
Company accepts any offer by an Agent to purchase Notes as principal. The date
of delivery of such documents is referred to herein as the "Commencement Date."
(e) Obligations Several. The Company acknowledges that the obligations
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of the Agents under this Agreement are several and not joint.
3. Agreements. The Company agrees with each Agent that:
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(a) Prior to the termination of the offering of the Notes pursuant to
this Agreement or any Terms Agreement, the Company will not file any Prospectus
Supplement relating to the Notes or any amendment to the Registration Statement
unless the Company has previously furnished to the Agents copies thereof for
their review and will not file any such proposed supplement or amendment to
which any Agent reasonably objects; provided, however, that (i) the foregoing
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requirement shall not apply to any of the Company's periodic filings with the
Commission required to be filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act, copies of which filings the Company will cause to be delivered
to the Agents promptly after being transmitted for filing with the Commission
and (ii) any Prospectus Supplement that merely sets forth the terms or a
description of particular Notes shall only be reviewed and approved by the Agent
or Agents offering such Notes. Subject to the foregoing sentence, the Company
will promptly 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. The Company will promptly advise the Agents (i) of the filing of any
amendment or supplement to the Basic
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Prospectus (except that notice of the filing of an amendment or supplement to
the Basic Prospectus that merely sets forth the terms or a description of
particular Notes shall only be given to the Agent or Agents offering such
Notes), (ii) of the filing and effectiveness of any amendment to the
Registration Statement, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Basic
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
and (v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company will
use its best efforts to prevent the issuance of any such stop order or notice of
suspension of qualification and, if issued, to obtain as soon as possible the
withdrawal thereof. 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 if it is not reasonably satisfied with such document.
(b) If, at any time when a prospectus relating to the Notes is required
to be delivered under the Securities Act, any event occurs or condition exists
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 to make the statements therein, in the light of the circumstances
when the Prospectus, as then amended or supplemented, is delivered to a
purchaser, not misleading, or if, in the opinion of any Agent (which opinion
shall be immediately expressed to the Company) or in the opinion of the Company,
it is necessary at any time to amend or supplement the Prospectus, as then
amended or supplemented, to comply with applicable law, the Company will
immediately notify the Agents by telephone (with confirmation in writing) to
suspend solicitation of offers to purchase Notes and, if so notified by the
Company, the Agents shall forthwith suspend such solicitation and cease using
the Prospectus, as then amended or supplemented. If the Company shall decide to
amend or supplement the Registration Statement or Prospectus, as then amended or
supplemented, it shall so advise the Agents 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 Prospectus, as then amended or supplemented,
satisfactory in all respects to each Agent, that will correct such statement or
omission or effect
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such compliance and will supply such amended or supplemented Prospectus to the
Agents in such quantities as they may reasonably request. If all documents,
certificates, opinions and letters furnished to the Agents pursuant to paragraph
(f) below and Sections 5(a), 5(b) and 5(c) in connection with the preparation
and filing of such amendment or supplement are satisfactory in all respects to
each Agent, 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 3(b), until the
distribution of any Notes an Agent may own as principal has been completed, if
any event described above in this paragraph (b) occurs, the Company will, at its
own expense, forthwith prepare and cause to be filed promptly with the
Commission an amendment or supplement to the Registration Statement or
Prospectus, as then amended or supplemented, satisfactory in all respects to
such Agent, will supply such amended or supplemented Prospectus to such Agent in
such quantities as it may reasonably request and shall furnish to such Agent
pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) such documents,
certificates, opinions and letters as such Agent may request in connection with
the preparation and filing of such amendment or supplement.
(c) The Company will make generally available to its security holders
and to the Agents as soon as practicable earning statements that satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder covering twelve-month periods beginning, in each
case, not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in Rule 158 under the Securities Act)
of the Registration Statement with respect to each sale of Notes. If such
fiscal quarter is the last fiscal quarter of the Company's fiscal year, such
earning statement shall be made available not later than 90 days after the close
of the period covered thereby and in all other cases shall be made available not
later than 45 days after the close of the period covered thereby.
(d) The Company will furnish to each Agent, without charge, a signed
copy of the Registration Statement, including exhibits and all amendments
thereto, and as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto as such Agent may
reasonably request.
(e) The Company will endeavor to qualify the Notes for offer and sale
under the securities or Blue Sky laws of such
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jurisdictions as the Agents shall reasonably request and to maintain such
qualifications for as long as the Agents shall reasonably request.
(f) During the term of this Agreement, the Company shall furnish to the
Agents 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 Terms Agreement and the performance by the Company of its
obligations hereunder or thereunder as the Agents may from time to time
reasonably request.
(g) During the term of this Agreement, the Company shall notify the
Agents promptly in writing of any downgrading, or of its receipt of any notice
of any intended or potential downgrading or of any review for 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.
(h) The Company will, whether or not any sale of Notes is consummated,
pay all expenses incident to the performance of its obligations under this
Agreement and any Terms Agreement, including: (i) the preparation and filing of
the Registration Statement and the Prospectus and all amendments and supplements
thereto, (ii) the preparation, issuance and delivery of the Notes, (iii) the
fees and disbursements of the Company's counsel and accountants and of the
Trustee and its counsel, (iv) the qualification of the Notes under securities or
Blue Sky laws in accordance with the provisions of Section 3(e), including
filing fees and the fees and disbursements of counsel for the Agents in
connection therewith and in connection with the preparation of any Blue Sky or
Legal Investment Memoranda, (v) the printing and delivery to the Agents in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of the Basic Prospectus and any amendments or supplements
thereto, (vi) the printing and delivery to the Agents of copies of the Indenture
and any Blue Sky or Legal Investment Memoranda, (vii) any fees charged by rating
agencies for the rating of the Notes, (viii) the fees and expenses, if any,
incurred with respect to any filing with the National Association of Securities
Dealers, Inc., (ix) 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 (x) any out-of-pocket
expenses incurred by the
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Agents; provided that any advertising expenses incurred by the Agents shall have
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been approved by the Company.
(i) Between the date of any agreement by an Agent to purchase Notes as
principal and the Settlement Date with respect to such agreement, the Company
will not, without such Agent's prior consent, offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company substantially similar to
such Notes (other than (i) the Notes that are to be sold pursuant to such
agreement, (ii) Notes previously agreed to be sold by the Company and (iii)
commercial paper issued in the ordinary course of business), except as may
otherwise be provided in such agreement.
4. Conditions of the Obligations of the Agents. Each Agent's obligation
-------------------------------------------
to solicit offers to purchase Notes as agent of the Company, each Agent's
obligation to purchase Notes as principal pursuant to any Terms Agreement or
otherwise and the obligation of any other purchaser to purchase Notes will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of the Company's officers made
in each certificate furnished pursuant to the provisions hereof and to the
performance and observance by the Company of all covenants and agreements herein
contained on its part to be performed and observed (in the case of an Agent's
obligation to solicit offers to purchase Notes, at the time of such
solicitation, and, in the case of an Agent's or any other purchaser's obligation
to purchase Notes, at the time the Company accepts the offer to purchase such
Notes and at the time of purchase) and (in each case) to the following
additional conditions precedent when and as specified:
(a) Prior to such solicitation or purchase, as the case may be:
(i) there shall not have occurred any change in the condition, financial
or otherwise, or in the earnings, business or operations, of the Company and
its subsidiaries, taken as a whole, from that set forth in the Prospectus, as
amended or supplemented at the time of such solicitation or at the time such
offer to purchase was made, that, in the reasonable judgment of the relevant
Agent, is materially adverse and that makes it, in the reasonable judgment of
such Agent, impracticable to market the Notes on the terms and in the manner
contemplated by the Prospectus, as so amended or supplemented;
(ii) there shall not have occurred any (A) suspension or material
limitation of trading generally on or by, as the case
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may be, the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (B) suspension
of trading of any securities of the Company on any exchange or in any
over-the-counter market, (C) declaration of a general moratorium on commercial
banking activities in New York by either Federal or New York State authorities
or (D) any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the reasonable judgment of the
relevant Agent, is materially adverse and, in the case of any of the events
described in clauses (A) through (D), such event, singly or together with any
other such event, makes it, in the reasonable judgment of such Agent,
impracticable to market the Notes on the terms and in the manner contemplated
by the Prospectus, as amended or supplemented at the time of such solicitation
or at the time such offer to purchase was made; and
(iii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a 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;
(A) except, in each case described in paragraph (i), (ii) or
(iii) above, as disclosed to the relevant Agent in writing by the Company prior
to such solicitation or, in the case of a purchase of Notes, as disclosed to the
relevant Agent before the offer to purchase such Notes was made or (B) unless in
each case described in (ii) above, the relevant event shall have occurred and
been known to the relevant Agent before such solicitation or, in the case of a
purchase of Notes, before the offer to purchase such Notes was made.
(b) On the Commencement Date and, if called for by any agreement by an
Agent to purchase Notes as principal, on the corresponding Settlement Date, the
relevant Agents shall have received:
(i) The opinion, dated as of such date, of Louis L. Hoynes, Jr., Senior
Vice President and General Counsel of the Company, to the effect that:
(A) the Company has been duly incorporated, is validly existing as
a corporation in good standing under
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the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus, as then amended or supplemented, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole;
(B) each Restricted Subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus, as then amended or supplemented, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a
whole;
(C) each of this Agreement and any applicable Terms Agreement has
been duly authorized, executed and delivered by the Company;
(D) 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;
(E) the Notes have been duly authorized and, if executed and
authenticated in accordance with the Indenture and delivered to and duly
paid for by the purchasers thereof on the date of such opinion, would be
entitled to the benefits of the Indenture and would be valid and binding
obligations of the Company, enforceable in accordance with their
respective terms except as (i) the enforceability thereof may be limited
by bankruptcy,
14
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;
(F) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Notes, the Indenture and any applicable Terms Agreement will not
contravene any material provision of applicable law or the certificate of
incorporation or by-laws of the Company, or any agreement or other
instrument binding upon the Company or any of its Restricted Subsidiaries
that is material to the Company and its subsidiaries, taken as a whole,
or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any Restricted Subsidiary,
and no consent, approval, authorization or order of or qualification with
any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Notes, the Indenture
and any applicable Terms Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Notes;
(G) the statements (1) in the Prospectus, as then amended or
supplemented, under the captions ["Description of the Notes,"]
"Description of Debt Securities," "Plan of Distribution" and
------------
, (2) in the Registration Statement under Item 15, (3) in "Item 3
-------
- Legal Proceedings" of the Company's most recent annual report on Form
10-K incorporated by reference in the Prospectus and (4) in "Item 1 -
Legal Proceedings" of Part II of the Company's quarterly reports on Form
10-Q, if any, filed since such annual report, in each case insofar as
such statements constitute summaries 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 and
fairly summarize the matters referred to therein;
(H) there are no legal or governmental proceedings pending or, to
the knowledge of such counsel, threatened to which the Company or any of
its Restricted Subsidiaries is a party or to which any of the properties
of the Company or any of its Restricted Subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus,
as then amended or supplemented, and are not so described or of any
statutes,
15
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus, as then
amended or supplemented, or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(I) such counsel is of the opinion ascribed to him in the
Prospectus, as then amended or supplemented, under the caption
"[Taxation]", if any;
(J) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended; and
(K) such counsel (1) is of the opinion that each document, if any,
filed pursuant to the Exchange Act and incorporated by reference in the
Prospectus, as then amended or supplemented (except for financial
information, statements and schedules included therein as to which such
counsel need not express any opinion), complied when so filed as to form
in all material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (2) believes that (except
for financial information, statements and schedules as to which such
counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Form T-1 heretofore referred
to) the Registration Statement, as then amended, if applicable, when it
became effective did 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, (3) is of the
opinion that the Registration Statement and Prospectus, as then amended
or supplemented, if applicable (except for financial information,
statements and schedules included therein as to which such counsel need
not express any opinion) as of the date such opinion is delivered, comply
as to form in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (4)
believes that (except for financial information, statements and schedules
as to which such counsel need not express any belief) the Prospectus, as
then amended or supplemented, if applicable, as of the date such opinion
is delivered does not contain any untrue statement of a material fact or
omit 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 that
--------
16
in the case of an opinion delivered on the Commencement Date or pursuant
to Section 5(b), the opinion and belief set forth in clauses (3) and (4)
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 Basic Prospectus.
(ii) The opinion, dated as of such date, of Willkie Farr &
Gallagher, counsel for the Agents, covering the matters in subparagraphs
(C), (D), (E) and (G) (with respect to statements in the Prospectus, as
then amended or supplemented, under the captions ["Description of the
Notes,"] "Description of Debt Securities" and "Plan of Distribution"),
(J) and clauses (2), (3) and (4) of subparagraph (K) in paragraph (b)(i)
above.
Notwithstanding the foregoing, the opinions described in subparagraphs
(E) (except as to the authorization of the Notes), (F), (G)(1) and (K)(3) and
(4) of paragraph (b)(i) above, when contained in an opinion delivered on the
Commencement Date or pursuant to Section 5(b), shall be deemed not to address
the application of the Commodity Exchange Act, as amended, or the rules,
regulations or interpretations of the Commodity Futures Trading Commission to
Notes the payments of principal or interest on which will be determined by
reference to one or more currency exchange rates, commodity prices, equity
indices or other factors.*
With respect to clauses (2), (3) and (4) of subparagraph (K) of paragraph
(b)(i) above, Willkie Farr & Gallagher 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 (but not
including documents incorporated therein by reference) and review and discussion
of the contents thereof (including documents incorporated therein by reference),
but are without independent check or verification, except as specified.
The opinion of counsel to the Company described in paragraph (b)(i) above
shall be rendered to you at the request of the Company and shall so state
therein. In giving such opinion, Louis L. Hoynes, Jr. may rely, to the extent
stated in his opinion, upon such other opinions as he deems necessary, which
opinions are in form and substance reasonably satisfactory to counsel for the
Underwriters, provided that Louis L. Hoynes, Jr. furnish a copy thereof to the
Underwriters and state that such opinions are satisfactory in form and scope and
that the Underwriters and counsel for the Underwriters are entitled to rely
thereon.
17
- ------------------------
* Delete if the last paragraph of Section 1 is deleted.
(c) On the Commencement Date and, if called for by any agreement by an
Agent to purchase Notes as principal, on
the corresponding Settlement Date, the relevant Agents shall have received a
certificate, dated such Commencement Date or Settlement Date, as the case may
be, signed by an executive officer of the Company to the effect set forth in
subparagraph (a)(iii) above and to the effect that the representations and
warranties of the Company contained herein are true and correct as of such date
and that the Company has complied in all material respects with all of the
agreements and satisfied in all material respects all of the conditions on its
part to be performed or satisfied on or before such date.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(d) On the Commencement Date and, if called for by any agreement by an
Agent to purchase Notes as principal, on the corresponding Settlement Date, the
Company's independent
public accountants shall have furnished to the relevant Agents a letter or
letters, dated as of the Commencement Date or such Settlement Date, as the case
may be, in form and substance satisfactory to such 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 contained in or incorporated by reference into the
Prospectus, as then amended or supplemented.
(e) On the Commencement Date and on each Settlement Date, the Company
shall have furnished to the relevant Agents such appropriate further
information, certificates and documents as they may reasonably request.
5. Additional Agreements of the Company. (a) Each time the
------------------------------------
Registration Statement or Prospectus is 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 all Agents deem to be immaterial), the Company will deliver or
cause to be delivered forthwith to each Agent a certificate signed by an
executive officer of the Company, dated the date of such amendment or
supplement, as the case may be, in form reasonably satisfactory to the Agents,
of the same tenor as the certificate referred to in Section 4(c) relating to the
18
Registration Statement or the Prospectus as amended or supplemented to the time
of delivery of such certificate.
(b) Each time the Company furnishes a certificate pursuant to Section
5(a), the Company will furnish or cause to be furnished forthwith to each Agent
a written opinion of counsel for the Company. Any such opinion shall be dated
the date of such amendment or supplement, as the case may be, shall be in a form
satisfactory to the Agents and shall be of the same tenor as the opinion
referred to in Section 4(b)(i), but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion. In lieu of such opinion, counsel last furnishing such an
opinion to an Agent may furnish to each Agent a letter to the effect that such
Agent may rely on such last opinion to the same extent as though it were dated
the date of such letter (except that statements in such last opinion will be
deemed to relate to the Registration Statement and the Prospectus as amended or
supplemented to the time of delivery of such letter.)
(c) Each time 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
Prospectus, the Company shall cause its independent public accountants forthwith
to furnish each Agent with a letter, dated the date of such amendment or
supplement, as the case may be, in form satisfactory to the Agents, of the same
tenor as the letter referred to in Section 4(d), with regard to the amended or
supplemental financial information included or incorporated by reference in the
Registration Statement or the Prospectus as amended or supplemented to the date
of such letter.
6. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by such Agent or any such controlling person in
connection with investigating or defending any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or in any amendment thereof or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), 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,
19
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to such
Agent furnished to the Company in writing by such Agent expressly for use
therein.
(b) Each Agent agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either 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 such Agent, but
only with reference to information relating to such Agent furnished to the
Company in writing by such Agent expressly for use in the Registration Statement
or the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
conflicting interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by [ ] or, if [ ] is not an
indemnified party and is not reasonably likely to become an indemnified party,
by the Agents that are indemnified parties, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph
20
(b) above. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. 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.
(d) If the indemnification provided for in paragraph (a) or (b) of this
Section 6 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein in connection
with any offering of Notes, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and each
Agent on the other hand from the offering of such Notes or (ii) if the
allocation provided by clause (i) 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 on the one
hand and each Agent on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and each Agent on the other hand in connection
with the offering of such Notes shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of such Notes (before
deducting expenses) received by the Company bear to the total discounts and
commissions received by each Agent in respect thereof. The relative fault of
the Company on the one hand and of each Agent on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by such Agent
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. Each Agent's
obligation to contribute pursuant to this Section 6 shall be several (in the
proportion that the principal amount of the Notes the sale of
21
which by or through such Agent gave rise to such losses, claims, damages or
liabilities bears to the aggregate principal amount of the Notes the sale of
which by or through any Agent gave rise to such losses, claims, damages or
liabilities) and not joint.
(e) The Company and the Agents agree that it would not be just or
equitable if contribution pursuant to this Section 6 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 that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above 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 6, no Agent shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes referred to in paragraph (d)
above that were offered and sold to the public through such Agent exceeds the
amount of any damages that 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
remedies provided for in this Section 6 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity.
7. Position of the Agents. In acting under this Agreement and in
----------------------
connection with the sale of any Notes by the Company (other than Notes sold to
an Agent as principal), each Agent is acting solely as agent of the Company and
does not assume any obligation towards or relationship of agency or trust with
any purchaser of Notes. An Agent shall make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to purchase Notes
has been solicited by such Agent and accepted by the Company, but such Agent
shall not have any liability to the Company in the event any such purchase is
not consummated for any reason. If the Company shall default in its obligations
to deliver Notes to a purchaser whose offer it has accepted, the Company shall
hold the relevant Agent harmless against any loss, claim, damage or liability
arising from or as a result of such default and shall, in particular, pay to
such Agent the commission it would have received had such sale been consummated.
22
8. Termination. This Agreement may be terminated at any time by the
-----------
Company or, as to any Agent, by the Company or such Agent upon the giving of
written notice of such termination to the other parties hereto, but without
prejudice to any rights, obligations or liabilities of any party hereto accrued
or incurred prior to such termination. The termination of this Agreement shall
not require termination of any agreement by an Agent to purchase Notes as
principal, and the termination of any such agreement shall not require
termination of this Agreement. If this Agreement is terminated, the provisions
of the third paragraph of Section 2(a), Section 2(e), the last sentence of
Section 3(b) and Sections 3(c), 3(h), 6, 7, 9, 11 and 14 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 occurred, the provisions of Sections 2(b), 2(c), 3(a), 3(e), 3(f),
3(g), 3(i), 4 and 5 shall also survive until such delivery has been made.
9. Representations and Indemnities to Survive. The respective indemnity
------------------------------------------
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 will
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 an Agent or the
Company or any of the officers, directors or controlling persons referred to in
Section 6 and delivery of and payment for the Notes.
10. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to [ADD NAMES OF AGENTS], will be
mailed, delivered or facsimiled and confirmed to [ADD ADDRESSES AND FACSIMILE
NUMBERS OF AGENTS] or, if sent to the Company, will be mailed, delivered or
facsimiled and confirmed to the Company at Five Giralda Farms, Madison, New
Jersey 07940, Attention: Treasurer (facsimile number: (201) 660-5360).
11. Successors. This Agreement and any Terms Agreement will inure to
----------
the benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors and controlling persons referred to in
Section 6 and the purchasers of Notes (to the extent expressly provided in
Section 4), and no other person will have any right or obligation hereunder.
23
12. 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 seven days' prior written
- --------
notice to the Agents but without requiring 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 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.
13. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the internal laws of the State of New York.
15. 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 of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and you.
Very truly yours,
AMERICAN HOME PRODUCTS CORPORATION
By
-------------------------------
Title:
The foregoing Agreement
is hereby confirmed
and accepted as of the
date first above written.
[ADD SIGNATURE BLOCKS FOR
AGENTS]
24
EXHIBIT A
AMERICAN HOME PRODUCTS CORPORATION
MEDIUM-TERM NOTES
TERMS AGREEMENT
, 19
----------------- --
American Home Products Corporation
Five Giralda Farms,
Madison, New Jersey 07940
Attention:
Re: Distribution Agreement dated , 19
------ -- --
(the "Distribution Agreement")
----------------------------------------------
We agree to purchase your Medium-Term Notes having the following terms:
[We agree to purchase, severally and not jointly, the principal amount of
Notes set forth below opposite our names:
Principal Amount
Name of Notes
---- ----------------
[Insert syndicate list]
Total . . . . $
---------------
The Notes shall have the following terms:]*
- -------------------------
* Delete if the transaction will not be syndicated.
All Notes: Fixed Rate Notes: Floating Rate Notes:
--------- ---------------- -------------------
Principal amount: Interest Rate: Base rate:
Purchase price: Applicability Index maturity:
of modified
Price to public: payment upon Spread:
acceleration:
Settlement date Spread multiplier:
and time: If yes, state
issue price: Alternate rate
Place of event spread:
delivery: Amortization
schedule: Initial interest
Specified rate:
currency:
Initial interest
Maturity date: reset date:
Initial accrual Interest reset
period OID: dates:
Total amount Interest reset
of OID: period:
Original yield Maximum interest
to maturity: rate:
Optional repayment Minimum interest
date(s): rate:
Optional redemption Interest payment
date(s): period:
Initial redemption Interest payment
date: dates:
Initial redemption Calculation agent:
percentage:
Annual redemption
percentage
decrease:
Other terms:
A-2
The provisions of Sections 1, 2(b), 2(c), 3 through 6, 9, 10, 11 and 14
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.
[If on the Settlement Date any one or more of the Agents shall fail or
refuse to purchase Notes that it has or they have agreed to purchase on such
date, and the aggregate amount of Notes which such defaulting Agent or Agents
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Notes to be purchased on such date, the other Agents
shall be obligated severally in the proportions that the amount of Notes set
forth opposite their respective names above bears to the aggregate amount of
Notes set forth opposite the names of all such non-defaulting Agents, or in such
other proportions as may specify, to purchase the Notes which such
-------------
defaulting Agent or Agents agreed but failed or refused to purchase on such
date; provided that in no event shall the amount of Notes that any Agent has
--------
agreed to purchase pursuant to this Agreement be increased pursuant to this
paragraph by an amount in excess of one-ninth of such amount of Notes without
the written consent of such Agent. If on the Settlement Date any Agent or
Agents shall fail or refuse to purchase Notes and the aggregate amount of Notes
with respect to which such default occurs is more than one-tenth of the
aggregate amount of Notes to be purchased on such date, and arrangements
satisfactory to and the Company for the purchase of such Notes are
-----------
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Agent or the Company. In
any such case, either or the Company shall have the right to
-----------
postpone the Settlement Date but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Agent from
liability in respect of any default of such Agent under this Agreement.]*
This Agreement is subject to termination on the terms incorporated by
reference herein. If this Agreement is so terminated, the provisions of
Sections 3(h), 6, 9, 11 and
- -------------------------
* Delete if the transaction will not be syndicated.
A-3
14 of the Distribution Agreement shall survive for the purposes of this
Agreement.
The following information, opinions, certificates, letters and documents
referred to in Section 4 of the Distribution Agreement will be required:
------
.
- --------
[NAME(S) OF RELEVANT AGENT(S)]
By
-------------------------------
Title:
Accepted:
AMERICAN HOME PRODUCTS CORPORATION
By
-------------------------
Title:
A-4
EXHIBIT B
AMERICAN HOME PRODUCTS CORPORATION
MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
--------------------------------
Explained below are the administrative procedures and specific terms of
the offering of Medium-Term Notes (the "Notes"), on a continuous basis by
American Home Products Corporation (the "Company") pursuant to the Distribution
Agreement, dated as of , 199 (the "Distribution Agreement") among the
-------- -
Company and [NAMES OF AGENTS] (the "Agents"). The Notes will be issued under an
Indenture dated as of April 10, 1992 between the Company and Chemical Bank (as
successor to Manufacturers Hanover Trust Company), as Trustee (the "Trustee"),
as supplemented by a Supplemental Indenture dated as of October 13, 1992 (the
"Indenture"). In the Distribution Agreement, the Agents have agreed to use
reasonable efforts to solicit purchases of the Notes, and the administrative
procedures explained below will govern the issuance and settlement of any Notes
sold through an Agent, as agent of the Company. An Agent, as principal, may
also purchase Notes for its own account, and if requested by such Agent, the
Company and such Agent will enter into a terms agreement (a "Terms Agreement"),
as contemplated by the Distribution Agreement. The administrative procedures
explained below will govern the issuance and settlement of any Notes purchased
by an Agent, as principal, unless otherwise specified in the applicable Terms
Agreement.
The Trustee will be the Registrar, Calculation Agent, Authenticating
Agent and Paying Agent for the Notes and will perform the duties specified
herein. Each Note will be represented by either a Global Security (as defined
below) delivered to the Trustee, 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 delivered to the holder thereof or a person designated
by such holder (a "Certificated Note"). Except as set forth in the Indenture,
an owner of a Book-Entry Note will not be entitled to receive a Certificated
Note.
Book-Entry Notes, which may be payable only in U.S. dollars, 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. 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, the Notes or any prospectus supplement
relating to the Notes shall be used herein as therein defined.
The Company will advise the Agents in writing of the employees of the
Company with whom the Agents are to communicate regarding offers to purchase
Notes and the related settlement details.
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 Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representation from
the Company and the Trustee to DTC, dated as of , 199 , and a
-------- -
Medium-Term Note Certificate Agreement between the Trustee and DTC, dated as of
, 199 (the "MTN Certificate Agreement"), and its obligations as a
- ------ -
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
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. $150,000,000 principal amount of all such Notes that
have the same Original Issue Date, Maturity Date and other
terms. Each Global Security will be dated and issued as
of the date of its authentication by the Trustee. Each
Global Security will bear an "Interest Accrual Date,"
which will be (i) with respect to an original Global
Security (or any portion thereof), 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 has
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been paid or duly provided for on the predecessor Global
Security (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. Book-Entry
Notes may be payable only in U.S. dollars. No Global
Security will represent any Certificated Note.
Denominations: Book-Entry Notes will be issued in
principal amounts of U.S. $100,000 or any amount in excess
thereof that is an integral multiple of U.S. $1,000.
Global Securities will be denominated in principal amounts
not in excess of U.S. $150,000,000. If one or more
Book-Entry Notes having an aggregate principal amount in
excess of $150,000,000 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.
$150,000,000 principal amount 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.
Preparation If any offer to purchase a Book-
of Pricing Entry Note is accepted by or on
Supplement: behalf of the Company, the Company will prepare a pricing
supplement (a "Pricing Supplement") reflecting the terms
of such Note. The Company (i) will arrange to file 10
copies of such Pricing Supplement with the Commission in
accordance with the applicable paragraph of Rule 424(b)
under the Securities Act and (ii) will, as soon
as possible and in any event not later than the date on
which such Pricing Supplement is filed with the
Commission, deliver the number of copies of such Pricing
Supplement to the relevant Agent as such Agent shall
request.
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In each instance that a Pricing Supplement is prepared,
the relevant Agent 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 offers accepted by the Company will be settled on the
fifth 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 day, which shall be no earlier than the next
Business Day.
Settlement Settlement Procedures with regard
Procedures: to each Book-Entry Note sold by the Company to or through
an Agent (unless otherwise specified pursuant to a Terms
Agreement) shall be as follows:
A. The relevant Agent will advise the Company by
telephone that such Note is a Book-Entry Note and of
the following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry Note, the
Interest Rate, whether such Note will pay
interest annually or semiannually and 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 Date(s), Interest Payment Period,
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Calculation Agent, Base Rate, Index Maturity,
Interest Reset Period, Initial Interest Reset
Date, 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).
4. Redemption or repayment provisions (if any).
5. Settlement date and time (Original Issue Date).
6. Interest Accrual Date.
7. Price.
8. Agent's commission (if any) determined as
provided in the Distribution Agreement.
9. Whether the Note is an Original Issue Discount
Note (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).
10. Whether the Note is a PERLS Note, and if it is a
PERLS Note, the Denominated Currency, the
Indexed Currency or Currencies, the Payment
Currency, the Exchange Rate Agent, the Reference
Dealers, the Face Amount, the Fixed Amount of
each Indexed Currency, the Aggregate Fixed
Amount of each Indexed Currency and the
Authorized Denominations (if other than U.S.
dollars).
11. Whether the Note is a Renewable Note, and if it
is a Renewable
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Note, the Initial Maturity Date and the Final
Maturity Date.
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.
13. Whether the Company has the option to reset the
Interest Rate, the Spread or the Spread
Multiplier of the Note.
14. Any other applicable terms.
B. The Company will advise the Trustee 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 Trustee will
then assign a CUSIP number to the Global Security
representing such Note and will notify the Company
and the relevant Agent of such CUSIP number by
telephone as soon as practicable.
C. The Trustee 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
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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).
6. The number of participant accounts to be
maintained by DTC on behalf of the relevant
Agent and the Trustee.
D. The Trustee will complete and authenticate the Global
Security representing such Note.
E. DTC will credit such Note to the Trustee's
participant account at DTC.
F. The Trustee will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to
(i) debit such Note to the Trustee'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 Trustee'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 Trustee to DTC
that (a) the Global Security representing such
Book-Entry Note has been issued and authenticated and
(b) the Trustee is holding such
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Global Security pursuant to the MTN Certificate
Agreement.
G. Unless the relevant Agent is the end purchaser of
such Note, 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.
I. The Trustee will credit to the account of the Company
maintained at [NAME OF ISSUER'S BANK], New York, New
York, in immediately available funds, the amount
transferred to the Trustee in accordance with
Settlement Procedure "F."
J. Unless the relevant Agent is the end purchaser of
such Note, 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. Monthly, the Trustee 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
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of any sales of which the Company has advised the
Trustee that have not yet been settled.
Settlement For sales by the Company of Book-
Procedures Entry Notes to or through an Agent
Timetable: (unless otherwise specified pursuant to a Terms Agreement)
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 in New York City set forth
below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on sale date
B 12:00 Noon on sale date
C 2:00 P.M. on 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., 12:00 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
Procedures "B" and "C" shall be completed as soon as
such rate has been determined but no later than 12:00
Noon and 2:00 P.M., respectively, on the first 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.
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If settlement of a Book-Entry Note is rescheduled or
cancelled, the Trustee, after receiving notice from the
Company or the relevant 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.
Failure If the Trustee fails to enter an SDFS
to Settle: deliver order with respect to a Book-Entry Note pursuant
to Settlement Procedure "F," the Trustee 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 Trustee's participant account,
provided that the Trustee'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 Trustee will mark such Global
Security "cancelled," make appropriate entries in the
Trustee's records and send such cancelled Global
Security to the Company. The CUSIP number assigned to
such Global Security shall, in accordance with the
procedures of the CUSIP Service Bureau of Standard &
Poor's Corporation, 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 Trustee 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.
B-10
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 Trustee 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.
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 Trustee 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.
B-11
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee 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 Trustee. Each
Certificated Note will bear an Original Issue Date,
which will be (i) with respect to an original
Certificated Note (or any portion thereof), its original
issuance date (which will be the settlement date) 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.
Preparation If any offer to purchase a Certi-
of Pricing ficated Note is accepted by or on
Supplement: behalf of the Company, the Company will prepare a
Pricing Supplement reflecting the terms of such Note.
The Company (i) will arrange to file 10 copies of such
Pricing Supplement with the Commission in accordance
with the applicable paragraph of Rule 424(b) under the
Securities Act and (ii) will, as soon as possible and in
any event not later than the date on which such Pricing
Supplement is filed with the Commission, deliver the
number of copies of such Pricing Supplement to the
relevant Agent as such Agent shall request.
In each instance that a Pricing Supplement is prepared,
the relevant Agent 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.
B-12
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 the fifth 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, which date shall be no earlier than the next
Business Day.
Settlement Settlement Procedures with regard to
Procedures: each Certificated Note sold by the Company to or through
an Agent (unless otherwise specified pursuant to a Terms
Agreement) shall be as follows:
A. The relevant Agent will advise the Company by
telephone that such Note is a Certificated Note and
of the following settlement information:
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, whether such Note will pay
interest annually or semiannually and whether
such
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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 Date(s), Interest Payment
Period, Calculation Agent, Base Rate, Index
Maturity, Interest Reset Period, Initial
Interest Reset Date, 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 (Original Issue
Date).
9. Interest Accrual Date.
10. Price.
11. Agent's commission (if any) determined as
provided in the Distribution Agreement.
12. Denominations.
13. Specified Currency.
14. 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).
15. Whether the Note is a PERLS Note, and if it is
a PERLS Note, the Denominated Currency, the
Indexed Currency or
B-14
Currencies, the Payment Currency, the Exchange
Rate Agent, the Reference Dealers, the Face
Amount, the Fixed Amount of each Indexed
Currency, the Aggregate Fixed Amount of each
Indexed Currency and the Authorized
Denominations (if other than U.S. dollars).
16. Whether the Note is a Renewable Note, and if
it is a Renewable Note, the Initial Maturity
Date and the Final Maturity Date.
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 Company has the option to reset
the Interest Rate, the Spread or the Spread
Multiplier of the Note.
19. Any other applicable terms.
B. The Company will advise the Trustee 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.
C. The Company will have delivered to the Trustee a
pre-printed four-ply 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 Trustee:
1. Note with customer confirmation.
2. Stub One - For the Trustee.
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3. Stub Two - For the relevant Agent.
4. Stub Three - For the Company.
D. The Trustee 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 Trustee. 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 account of
the Company at [NAME OF ISSUER'S BANK], New York,
New York, or to such other account as the Company
shall have specified to such Agent and the Trustee,
in immediately available funds, 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 is the end purchaser of
such Note, 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.
F. The Trustee will send Stub Three to the Company by
first-class mail. Monthly, the Trustee will also
send to the Company a statement setting forth the
principal amount of the
B-16
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
Trustee that have not yet been settled.
Settlement For sales by the Company of Certifi-
Procedures cated Notes to or through an Agent
Timetable: (unless otherwise specified pursuant to a Terms
Agreement), Settlement Procedures "A" through "F" set
forth above shall be completed on or before the
respective times in New York City set forth below:
Settlement
Procedure Time
---------- ----
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 If a purchaser fails to accept
to Settle: delivery of and make payment for any Certificated Note,
the relevant Agent will notify the Company and the
Trustee by telephone and return such Note to the
Trustee. Upon receipt of such notice, the Company will
immediately wire transfer to the account of such Agent
an amount equal to the price of such Note less such
Agent's commission in respect of such Note (if any).
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, then the Company will reimburse such Agent or
the Trustee, as appropriate, on an equitable basis for
its loss of the use of the funds during the period when
B-17
they were credited to the account of the Company.
Immediately upon receipt of the Certificated Note in
respect of which such failure occurred, the Trustee will
mark such Note "cancelled," make appropriate entries in
the Trustee's records and send such Note to the Company.
B-18