Exhibit 1
THE ST. PAUL COMPANIES, INC.
$500,000,000
Medium-Term Notes, Series D
Distribution Agreement
January 29, 2003
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
J.P. Morgan Securities Inc.,
270 Park Avenue,
New York, New York 10017.
Ladies and Gentlemen:
The St. Paul Companies, Inc., a Minnesota corporation (the
"Company"), proposes to issue and sell from time to time its Medium-Term Notes,
Series D (the "Securities") in an initial aggregate amount up to $500,000,000
and agrees with each of you (individually, an "Agent", and collectively, the
"Agents") as set forth in this Agreement. It is understood that the Company may
from time to time authorize the issuance of additional Securities and that such
additional Securities may be sold to or through the Agents pursuant to the terms
of this Agreement, and all as though the issuance of such Securities were
authorized as of the date hereof.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf and the right to accept offers to purchase Securities through additional
agents on substantially the same terms and conditions as set forth hereunder,
and to appoint additional agents for the purpose of soliciting offers to
purchase Securities, the Company hereby (i) appoints each Agent as an agent of
the Company for the purpose of soliciting and receiving offers to purchase
Securities from the Company pursuant to Section 2(a) hereof and (ii) agrees
that, except as otherwise contemplated herein, whenever it determines to sell
Securities directly to any Agent as principal, it will enter into a separate
agreement (each, a "Terms Agreement"), substantially in the form of Annex I
hereto, relating to such sale in accordance with Section 2(b) hereof. This
Distribution Agreement shall not be construed to create either an obligation on
the part of the Company to sell any Securities or an obligation of any of the
Agents to purchase Securities as principal.
The Securities will be issued under an indenture, dated as of
March 12, 2002 (the "Indenture"), between the Company and JPMorgan Chase Bank,
as trustee (the "Trustee"). The Securities shall have the maturity ranges,
interest rates, if any, redemption provisions and other terms set forth in the
Prospectus referred to below as it may be amended or supplemented from time to
time. The Securities will be issued, and
the terms and rights thereof established, from time to time by the Company in
accordance with the Indenture.
1. The Company represents and warrants to, and agrees with,
each Agent that:
(a) Two registration statements on Form S-3 (File Nos.
333-98525 and 333-98525-01 and File Nos. 333-92466 and 333-92466-01) in respect
of securities of the Company and St. Paul Capital Trust II, have been filed with
the Securities and Exchange Commission (the "Commission"); such registration
statements and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to such Agent, and excluding exhibits to the
registration statements but including all documents incorporated by reference in
the prospectus included in the latest registration statement, have been declared
effective by the Commission in such form; no other document with respect to such
registration statements or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Securities and Exchange Act of 1933, as amended (the
"Act"), each in the form heretofore delivered to the Agents); and no stop order
suspending the effectiveness of any registration statement, or any
post-effective amendment thereto has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in such registration statements or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Act, are hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statements and any post-effective amendment thereto, including
all exhibits thereto and the documents incorporated by reference in the
prospectus contained in such registration statements at the time such part of
the registration statements became effective but excluding Form T-1, each as
amended at the time such part of the registration statements became effective,
are hereinafter collectively called the "Registration Statement"; the prospectus
(including any prospectus supplement) relating to the Securities, in the form in
which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus,
including any supplement to the Prospectus that sets forth only the terms of a
particular issue of the Securities (a "Pricing Supplement"), shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated therein by reference;
any reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to Sections
13(a) or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement; and
any reference to the Prospectus as amended or supplemented shall be deemed to
refer to and include the Prospectus as amended or supplemented (including by the
applicable Pricing Supplement filed in
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accordance with Section 4(a) hereof) in relation to Securities to be sold
pursuant to this Agreement, in the form filed or transmitted for filing with the
Commission pursuant to Rule 424(b) under the Act and in accordance with Section
4(a) hereof (including any documents incorporated by reference therein as of the
date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular issuance of
Securities;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by any Agent expressly for use in the Prospectus as amended or
supplemented to relate to a particular issuance of Securities;
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any direct loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, which is material to the Company and it subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital stock
or long-term debt of the Company and its subsidiaries taken as a whole (other
than any decrease in the capital stock resulting from purchases under the
Company's Stock Repurchase Program and any increase resulting from the exercise
of
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stock options, the issuance of restricted shares under the Company's stock
incentive and employee compensation plans, the conversion of Series B
Convertible Preferred Stock or the settlement of purchase contracts included in
the Company's Equity Units) or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise than
as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Minnesota, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, and is not subject to any material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and each of
the Company's principal subsidiaries (hereinafter called "Principal
Subsidiaries"), namely St. Paul Fire and Marine Insurance Company, United States
Fidelity and Guaranty Company and The John Nuveen Company, has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification;
(f) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; all of the issued shares of capital stock of each of St. Paul
Fire and Marine Insurance Company, United States Fidelity and Guaranty Company
and The John Nuveen Company held directly or indirectly by the Company have been
duly authorized and validly issued, are fully paid and non-assessable and
(except as disclosed in the Registration Statement) all shares of the capital
stock of such subsidiaries are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims;
(g) The Securities have been duly authorized by the Company,
and, when issued and delivered pursuant to this Agreement and any Terms
Agreement, will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture; the Indenture has been duly authorized,
executed and delivered and duly qualified under the Trust Indenture Act and
constitutes a valid and legally binding instrument, enforceable in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the Indenture
conforms, and the Securities of any particular issuance of Securities will
conform, to the descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance of Securities;
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(h) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the Restated
Articles of Incorporation, as amended, or the By-laws, as amended, of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the solicitation of offers to
purchase Securities, the issue and sale of the Securities or the consummation by
the Company of the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such as have been, or will have been prior to
the Commencement Date (as defined in Section 3 hereof), obtained under the Act
or the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities,
insurance or Blue Sky laws in connection with the solicitation by such Agent of
offers to purchase Securities from the Company and with purchases of Securities
by such Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(i) Neither the Company nor any of its subsidiaries is in
violation of its organizational documents or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties is or may be bound;
(j) The statements set forth in the Prospectus under the
captions "Description of Debt Securities We May Offer" and "Description of Notes
We May Offer", insofar as they purport to constitute a summary of the terms of
the Securities therein described, and, subject to the limitations set forth
therein, under the captions "United States Taxation", "Plan of Distribution" and
"Supplemental Plan of Distribution" insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate, complete
and fair;
(k) Other than as set forth in the Prospectus, and other than
litigation (none of which is reasonably likely to be material) incidental to the
kinds of business conducted by the Company and its subsidiaries, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party, or to which any property of the Company or any of its
subsidiaries is subject, which, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate (after giving effect to
any applicable insurance, reinsurance or reserves therefor) have a material
adverse effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, to the best of the Company's knowledge, no
such
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proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(l) The Company is not and, after giving effect to each
offering and sale of the Securities will not be, an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(m) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of Securities which
shall have been issued and sold by the Company hereunder or under any Terms
Agreement and of any debt securities of the Company (other than such Securities)
that shall have been issued and sold pursuant to the Registration Statement will
not exceed the amount of debt securities registered under the Registration
Statement; and
(n) KPMG LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder.
2. (a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth, each
of the Agents hereby severally and not jointly agrees, as agent of the Company,
to use its reasonable efforts to solicit and receive offers to purchase the
Securities from the Company upon the terms and conditions set forth in the
Prospectus as amended or supplemented from time to time. So long as the
provisions of this Agreement relating to the solicitation of offers to purchase
Securities from the Company shall not have been terminated pursuant to Section
10 with respect to any Agent, the Company shall not, without the consent of such
Agent, solicit or accept offers to purchase, or sell, any debt securities with a
maturity at the time of original issuance of nine months to 30 years except
pursuant to this Agreement (or any Terms Agreement or other agreement for the
sale of particular Securities made pursuant to Section 2(b)), or except pursuant
to a private placement not constituting a public offering under the Act or
except in connection with a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous offering of
medium-term debt securities. However, (i) the Company reserves the right to
sell, and may solicit and accept offers to purchase, Securities directly on its
own behalf with persons other than broker-dealers, and, in the case of any such
sale not resulting from a solicitation made by any Agent, no commission will be
payable with respect to such sale; and (ii) the Company shall have the right at
any time to accept a specific offer to purchase Securities solicited by a person
other than one or more of the Agents or to agree with another person that such
person shall become an Agent hereunder or that such person may from time to time
solicit and receive offers to purchase Securities from the Company (each such
other person, an "Other Dealer"), in each case without obtaining the prior
consent of any of the Agents, provided that (x) the Company shall give each of
the Agents notice of its acceptance of such an offer or making such an agreement
and (y) any Other Dealer shall agree to be bound by and subject to the terms and
conditions of this Agreement binding on the Agents (including the commission
schedule set forth herein, except for any commission as agreed between such
Other Dealer and the Company).
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Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the payment in
each case therefor shall be as set forth in the Administrative Procedures
attached hereto as Annex II as it may be amended from time to time by written
agreement between the Agents and the Company (the "Administrative Procedures").
The provisions of the Administrative Procedures shall apply to all transactions
contemplated hereunder other than those made pursuant to a Terms Agreement. Each
Agent and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them in the Administrative
Procedures. The Company will furnish to the Trustee a copy of the Administrative
Procedures as from time to time in effect.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities. As soon as
practicable, but in any event not later than one business day in New York City,
after receipt of notice from the Company, the Agents will suspend solicitation
of offers to purchase Securities from the Company until such time as the Company
has advised the Agents that such solicitation may be resumed. During such
period, the Company shall not be required to comply with the provisions of
Sections 4(h), 4(i), 4(j) and 4(k). Upon advising the Agents that such
solicitation may be resumed, however, the Company shall simultaneously provide
the documents (if any) required to be delivered by Sections 4(h), 4(i), 4(j) and
4(k), and the Agents shall have no obligation to solicit offers to purchase the
Securities until such documents have been received by the Agents. In addition,
any failure by the Company to comply with its obligations hereunder, including
without limitation its obligations to deliver the documents required by Sections
4(h), 4(i), 4(j) and 4(k), shall automatically terminate the Agents' obligations
hereunder, including without limitation its obligations to solicit offers to
purchase the Securities hereunder as agent or to purchase Securities hereunder
as principal.
The Company agrees to pay each Agent a commission, at the time
of settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
From 9 months to less than 1 year..................................... .125%
From 1 year to less than 18 months.................................... .150%
From 18 months to less than 2 years................................... .200%
From 2 years to less than 3 years..................................... .250%
From 3 years to less than 4 years..................................... .350%
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From 4 years to less than 5 years..................................... .450%
From 5 years to less than 6 years..................................... .500%
From 6 years to less than 7 years..................................... .550%
From 7 years to less than 10 years.................................... .600%
From 10 years to less than 15 years................................... .625%
From 15 years to less than 20 years................................... .675%
From 20 years to 30 years............................................. .750%
(b) Each sale of Securities to any Agent as principal shall be
made in accordance with the terms of this Agreement and (unless the Company and
such Agent shall otherwise agree) a Terms Agreement, which may be an oral
agreement followed by a written confirmation by such Agent transmitted by
facsimile transmission or other means mutually satisfactory to the parties
thereto, and which will provide for the sale of such Securities to, and the
purchase thereof by, such Agent. Each Terms Agreement will contain substantially
the information set forth in, and if in writing will be substantially in the
form of, Annex I hereto. A Terms Agreement may also specify certain provisions
relating to the reoffering of such Securities by such Agent. The commitment of
any Agent to purchase Securities as principal, whether pursuant to any Terms
Agreement or otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
specify the principal amount of Securities to be purchased by any Agent pursuant
thereto, the price to be paid to the Company for such Securities, any provisions
relating to rights of, and default by, underwriters acting together with such
Agent in the reoffering of the Securities and the time and date and place of
delivery of and payment for such Securities. Such Terms Agreement shall also
specify any requirements for opinions of counsel, accountants' letters and
officers' certificates pursuant to Section 4 hereof. Each Agent proposes to
offer Securities purchased by it as principal for sale at prevailing market
prices or prices related thereto at the time of sale, which may be equal to,
greater than or less than the price at which such Securities are purchased by
such Agent from the Company.
For each sale of Securities to an Agent as principal that is
not made pursuant to a written Terms Agreement, the procedural details relating
to the issue and delivery of such Securities and payment therefor shall be as
set forth in the Administrative Procedures. For each such sale of Securities to
an Agent as principal that is not made pursuant to a Terms Agreement, the
Company agrees to pay such Agent a commission (or grant an equivalent discount)
as provided in Section 2(a) hereof and in accordance with the schedule set forth
therein.
Each time and date of delivery of and payment for Securities
to be purchased by an Agent as principal, whether pursuant to a written Terms
Agreement or otherwise, set forth in a Terms Agreement or in accordance with the
Administrative Procedures, is referred to herein as a "Time of Delivery".
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(c) Each Agent represents, warrants and agrees that: (i) it
has not offered or sold and, prior to the expiry of a period of six months from
the date of issue of such Securities, will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by
it in connection with the issue or sale of any Securities in circumstances in
which section 21(1) of the FSMA does not apply to the Issuer; and (iii) it has
complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom.
3. The documents required to be delivered pursuant to Section
6 hereof on the Commencement Date (as defined below) shall be delivered to the
Agents at the offices of Sullivan & Cromwell LLP, 125 Broad Street, New York,
New York 10004, at 2:00 p.m., New York City time, on the date of this Agreement,
which date and time of such delivery may be postponed by agreement between the
Agents and the Company but in no event shall be later than the day prior to the
date on which solicitation of offers to purchase Securities is commenced or on
which any Terms Agreement is entered into (such time and date being referred to
herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall be
disapproved by any Agent promptly after reasonable notice thereof or (B) after
the date of any Terms Agreement or other agreement by an Agent to purchase
Securities as principal and prior to the related Time of Delivery which shall be
disapproved by any Agent party to such Terms Agreement or so purchasing as
principal promptly after reasonable notice thereof; (ii) to prepare, with
respect to any Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a form
previously approved by such Agent and to file such Pricing Supplement pursuant
to Rule 424(b) under the Act; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing Supplement, at any
time prior to having afforded each Agent a reasonable opportunity to review and
comment thereon; (iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long
as the delivery of a prospectus is required in connection with the offering or
sale of the Securities, and during such time period to advise such Agent,
promptly after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has become effective
or any supplement to the Prospectus or any amended Prospectus (other than any
Pricing Supplement that relates to Securities not purchased through or by such
Agent) has been filed with, or transmitted
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for filing with, the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amendment or supplement of the Registration Statement or
Prospectus or for additional information; and (v) in the event of the issuance
of any such stop order or of any such order preventing or suspending the use of
any such prospectus or suspending any such qualification, to promptly use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as such
Agent may reasonably request to qualify the Securities for offering and sale
under the securities laws of such United States jurisdictions as such Agent may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein for as long as may be necessary to complete the
distribution or sale of the Securities; provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as provided
in the Administrative Procedures), in the form in which it is filed with the
Commission pursuant to Rule 424 under the Act, and with copies of the documents
incorporated by reference therein, all in such quantities as such Agent may
reasonably request from time to time; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the Securities
(including Securities purchased from the Company by such Agent as principal) and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to purchase
Securities from the Company (and, if so notified, such Agent shall cease such
solicitations as soon as practicable, but in any event not later than one
business day later); and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus as then amended or supplemented, to so
advise such Agent promptly by telephone (with confirmation in writing) and to
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect such
compliance; provided, however, that if during such same period such Agent
continues to own Securities purchased from the Company by such Agent as
principal or such Agent is otherwise required to deliver a prospectus in respect
of transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
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(d) To make generally available to its security holders as
soon as practicable, but in any event not later than 18 months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to
such Agent copies of all reports or other communications (financial or other)
furnished to stockholders generally, and deliver to such Agent (i) as soon as
they are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
such Agent may from time to time reasonably request (such financial statements
to be on a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission);
(f) That, from the date of any written Terms Agreement with
such Agent or other agreement by such Agent to purchase Securities as principal
and continuing to and including the later of (i) the termination of the trading
restrictions for the Securities purchased thereunder, as notified to the Company
by such Agent and (ii) the related Time of Delivery, the Company will not,
without the prior written consent of such Agent, offer, sell, contract to sell
or otherwise dispose of any debt securities of the Company which both mature
more than nine months after such Time of Delivery and are substantially similar
to the Securities to be sold pursuant to such Terms Agreement;
(g) That each acceptance by the Company of an offer to
purchase Securities hereunder (including any purchase by such Agent as principal
not pursuant to a written Terms Agreement), and each execution and delivery by
the Company of a written Terms Agreement with such Agent, shall be deemed to be
an affirmation to such Agent that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and correct as
of the date of such acceptance or of such Terms Agreement, as the case may be,
as though made at and as of such date, and an undertaking that such
representations and warranties will be true and correct as of the settlement
date for the Securities relating to such acceptance or as of the Time of
Delivery relating to such sale, as the case may be, as though made at and as of
such date (except that such representations and warranties shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented relating to such Securities);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than by a
Pricing Supplement) and each time a document filed under the Act or the Exchange
Act is incorporated by reference into the Prospectus, and each time the Company
sells Securities to such Agent as principal pursuant to a written Terms
Agreement and such Terms Agreement specifies the delivery of an opinion or
opinions by Sullivan & Cromwell LLP, counsel to the Agents, as a condition to
the purchase of Securities pursuant to
-11-
such Terms Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish to such
Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing Supplement)
each time a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities to such
Agent as principal pursuant to a written Terms Agreement and such Terms
Agreement specifies the delivery of an opinion under this Section 4(i) as a
condition to the purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such Agent a written
opinion of Bruce A. Backberg, Senior Vice President for the Company, or other
counsel for the Company satisfactory to such Agent, dated the date of such
amendment, supplement, incorporation or Time of Delivery relating to such sale,
as the case may be, in form satisfactory to such Agent, to the effect that such
Agent may rely on the opinion of such counsel referred to in Section 6(c) hereof
which was last furnished to such Agent to the same extent as though it were
dated the date of such letter authorizing reliance (except that the statements
in such last opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date) or, in lieu of such
opinion, an opinion of the same tenor as the opinion of such counsel referred to
in Section 6(c) hereof but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing Supplement)
and each time that a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, in either case to set forth
financial information included in or derived from the Company's consolidated
financial statements or accounting records, and each time the Company sells
Securities to such Agent as principal pursuant to a written Terms Agreement and
such Terms Agreement specifies the delivery of a letter under this Section 4(j)
as a condition to the purchase of Securities pursuant to such Terms Agreement,
the Company shall cause the independent certified public accountants who have
certified the financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement forthwith to furnish
such Agent a letter, dated the date of such amendment, supplement, incorporation
or Time of Delivery relating to such sale, as the case may be, and furnished no
later than the date (the "Comfort Letter Delivery Date") that is five business
days after the date of such amendment, supplement, incorporation or at such Time
of Delivery, as the case may be, in form satisfactory to such Agent, of the same
tenor as the letter referred to in Section 6(d) hereof but modified to relate to
the Registration Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to reflect changes in
the financial statements and other information derived from the accounting
records of the Company, to the extent such financial statements and other
information are available as of a date not more than five business days prior to
the date of such letter; provided, however, that, with respect to any financial
information or other matter, such letter may reconfirm as true and correct at
such date as though made at and as of such date, rather than repeat statements
with respect to such financial
-12-
information or other matter made in the letter referred to in Section 6(d)
hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, and each time the Company sells
Securities to such Agent as principal pursuant to a written Terms Agreement and
such Terms Agreement specifies the delivery of a certificate under this Section
4(k) as a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall furnish or cause to be furnished forthwith to such
Agent a certificate, dated the date of such supplement, amendment, incorporation
or Time of Delivery relating to such sale, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such Agent,
to the effect that the statements contained in the certificates referred to in
Section 6(h) hereof which were last furnished to such Agent are true and correct
at such date as though made at and as of such date (except that such statements
shall be deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in lieu of such certificate,
certificates of the same tenor as the certificates referred to in said Section
6(h) but modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and
(l) To offer to any person who has agreed to purchase
Securities from the Company as the result of an offer to purchase solicited by
such Agent the right to refuse to purchase and pay for such Securities if, on
the related settlement date, fixed pursuant to the Administrative Procedures,
any condition set forth in Section 6(a), 6(e), 6(f) or 6(g) hereof shall, not
have been satisfied (it being understood that the judgment of such person with
respect to the impracticability or inadvisability of such purchase of Securities
shall be substituted, for purposes of this Section 4(l), for the respective
judgments of an Agent with respect to certain matters referred to in such
Sections 6(e) and 6(g), and that such Agent shall have no duty or obligation
whatsoever to exercise the judgment permitted under such Sections 6(e) and 6(g)
on behalf of any such person).
5. The Company covenants and agrees with each Agent that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the mailing and
delivering of copies thereof to such Agent; (ii) the reasonable fees,
disbursements and expenses of counsel for the Agents in connection with the
establishment of the program contemplated hereby, any opinions to be rendered by
such counsel hereunder and under any Terms Agreement and the transactions
contemplated hereunder and under any Terms Agreement; (iii) the cost of printing
or producing this Agreement, any written Terms Agreement, the Indenture, any
Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iv) all expenses in connection
with the qualification of the
-13-
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including the fees and disbursements of counsel for the
Agents in connection with such qualification and in connection with the Blue Sky
and Legal Investment Surveys; (v) any fees charged by securities rating services
for rating the Securities; (vi) any filing fees incident to, and the fees and
disbursements of counsel for the Agents in connection with, any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; (vii) the cost of preparing, and providing any CUSIP or other
identification numbers for, the Securities; (viii) the fees and expenses of the
Trustee and any agent of the Trustee and any transfer or paying agent of the
Company and the fees and disbursements of counsel for any Trustee or such agent
in connection with any Indenture and the Securities; (ix) the fees and expenses
of any Depository (as defined in the Indenture) and any nominees thereof in
connection with the Securities; (x) any advertising expenses connected with the
solicitation of offers to purchase and the sale of Securities so long as such
advertising expenses have been approved in advance by the Company; and (xi) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
Except as provided in Sections 7 and 8 hereof, each Agent shall pay all other
expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at
any time ("Solicitation Time") to solicit offers to purchase the Securities and
the obligation of any Agent to purchase Securities as principal, pursuant to any
written Terms Agreement or otherwise, shall in each case be subject, in such
Agent's discretion, to the condition that all representations and warranties and
other statements of the Company herein (and, in the case of an obligation of an
Agent under a written Terms Agreement, in or incorporated by reference in such
Terms Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the Pricing Supplement) with respect to
such Securities shall have been filed with the Commission pursuant to Rule
424(b) under the Act within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
4(a) hereof; (ii) no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and (iii) all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of such Agent;
(b) Sullivan & Cromwell LLP, counsel to the Agents, shall have
furnished to such Agent (i) such written opinion or opinions, dated the
Commencement Date, with respect to the incorporation of the Company, the
validity of the Indenture, the Securities, the Registration Statement, the
Prospectus as amended or supplemented and other
-14-
related matters as such Agent may reasonably request, and (ii) if and to the
extent requested by such Agent, with respect to each applicable date referred to
in Section 4(h) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, an opinion or opinions, dated such applicable
date, to the effect that such Agent may rely on the opinion or opinions which
were last furnished to such Agent pursuant to this Section 6(b) to the same
extent as though it or they were dated the date of such letter authorizing
reliance (except that the statements in such last opinion or opinions shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in any case, in lieu of such an opinion or
opinions, an opinion or opinions of the same tenor as the opinion or opinions
referred to in clause (i) but modified to relate to the Registration Statement
and the Prospectus as amended and supplemented to such date; and in each case
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Bruce A. Backberg, Senior Vice President for the Company,
or other counsel for the Company acceptable to such Agent, shall have furnished
to such Agent his written opinion, dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, in form and substance
satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Minnesota, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented;
(ii) The Company has an authorized share capital as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable;
(iii) The Company has been duly qualified to do business as a
foreign corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which, in such
counsel's opinion, the Company is required to be so qualified or if the
Company is not so qualified in any such state or jurisdiction, the
failure to so qualify would not, considering all cases in the
aggregate, involve a material risk to the business, properties,
financial position or results of operation of the Company and its
subsidiaries, taken as a whole;
(iv) Each of the Principal Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; all of the issued
shares of capital stock of each of St. Paul Fire and Marine Insurance
Company and United States Fidelity and Guaranty Company, and the issued
shares of capital stock of The John Nuveen Company held directly or
indirectly by the Company have been duly authorized and validly issued,
are fully paid and non-assessable, and (except as disclosed in the
Registration Statement) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
(such counsel being
-15-
entitled to rely in respect of the opinion in this clause upon opinions
of local counsel and in respect of matters of fact upon certificates of
officers of the Company or the Principal Subsidiaries, provided that
such counsel shall state that he believes that both the Agents and he
are justified in relying upon such opinions and certificates);
(v) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any
of its subsidiaries is the subject, other than as set forth in the
Prospectus and other than litigation or proceedings (none of which is
reasonably likely to be material) incident to the kinds of business
conducted by the Company and its subsidiaries, which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate (after giving effect to any applicable insurance,
reinsurance or reserves therefor) have a material adverse effect on the
current or future consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken as
a whole; and to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(vi) This Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company;
(vii) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company, will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; and the Indenture
conforms and the Securities will conform to the descriptions thereof in
the Prospectus as amended or supplemented;
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
fraudulent transfer, fraudulent conveyance, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Indenture has been duly qualified
under the Trust Indenture Act;
(ix) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any applicable Terms Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of
the property or assets of the Company or any of its subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its
-16-
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the Restated Articles of Incorporation, as
amended, or By-laws, as amended, of the Company or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties;
(x) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is
required for the solicitation of offers to purchase Securities, the
issue and sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any applicable
Terms Agreement, or the Indenture, except such as have been obtained
under the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities, insurance or Blue Sky laws in connection with
the solicitation by the Agents of offers to purchase Securities from
the Company and with purchases of Securities by an Agent as principal,
as the case may be, in each case in the manner contemplated hereby;
(xi) Neither the Company nor any of its subsidiaries is in
violation of its organizational documents or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties is or may be bound except
where any such default does not have or would not reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole;
(xii) The statements set forth in the Prospectus under the
captions "Description of Debt Securities We May Offer" and "Description
of Notes We May Offer", insofar as they purport to constitute a summary
of the terms of the Securities therein described, and, subject to the
limitations set forth therein, under the caption "United States
Taxation", and under the captions "Plan of Distribution" and
"Supplemental Plan of Distribution" insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(xiii) The Company is not and, after giving effect to each
offering and sale of the Securities will not be, an "investment
company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act;
(xiv) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
and such counsel has no reason to believe that any of
-17-
such documents, when they became effective or were so filed, as the
case may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; and
(xv) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto made
by the Company prior to the date of such opinion for the Securities
(other than the financial statements and related schedules therein, as
to which counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder; such counsel
has no reason to believe that, as of its effective date, the
Registration Statement or any further amendment or supplement thereto
made by the Company prior to the date of such opinion (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that, as of its date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to
the date of such opinion (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading or
that, as of the date of such opinion, either the Registration Statement
or the Prospectus as amended or supplemented or any further amendment
or supplement thereto made by the Company prior to the date of such
opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading; and such counsel does not know
of any amendment to the Registration Statement required to be filed or
any contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be incorporated
by reference into the Prospectus as amended or supplemented or required
to be described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by
reference or described as required;
provided that in lieu of the delivery of the opinion set forth in paragraph (iv)
of this Section 6(c), (i) as to The John Nuveen Company, such counsel may cause
Alan G. Berkshire, Vice President and General Counsel to The John Nuveen
Company, to deliver an opinion as to such matters, dated the Commencement Date
and each applicable date referred to in Section 4(i) hereof that is on or prior
to such Solicitation
-18-
Time or Time of Delivery, as the case may be, and (ii) as to United States
Fidelity and Guaranty Company, such counsel may cause Bruce Saul, Vice President
and Legal Counsel to United States Fidelity and Guaranty Company, to deliver an
opinion as to such matters, dated the Commencement Date and each applicable date
referred to in Section 4(i) hereof that is on or prior to such Solicitation Time
or Time of Delivery, as the case may be;
(d) (i) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each Comfort Letter Delivery Date or Time of Delivery
referred to in Section 4(j) hereof that is on or prior to such Solicitation Time
or Time of Delivery, as the case may be, the independent certified public
accountants who have certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement
shall have furnished to such Agent a letter, dated the Commencement Date or the
related applicable date referred to in Section 4(j), as the case may be, and
(ii) if such Solicitation Time is on or after any applicable date referred to in
Section 4(j) but prior to the related Comfort Letter Delivery Date, such
accountants shall have furnished to such Agent a letter, dated such applicable
date, such letters being, in any such case described in clause (i) or (ii), in
form and substance satisfactory to such Agent, to the effect set forth in Annex
III hereto;
(e) (i) Neither the Company nor any of its Principal
Subsidiaries shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior to the date of
the Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented prior to the
date of the Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery there shall not have been any change in the capital
stock or long-term debt of the Company and its subsidiaries taken as a whole
(other than any decrease in the capital stock resulting from purchases under the
Company's Stock Repurchase Program and any increase in the capital stock
resulting from the exercise of stock options or the issuance of restricted
shares under the Company's stock incentive and employee compensation plans, the
conversion of Series B Convertible Preferred Stock or the settlement of purchase
contracts included in the Company's Equity Units) or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the Prospectus as amended or supplemented prior to the date
of the Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of such Agent so material and adverse as
to make it impracticable or inadvisable to proceed with the solicitation by such
Agent of offers to purchase Securities from the Company or the purchase by such
Agent of Securities from the Company as principal, as the case may be, on the
terms and in the
-19-
manner contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Supplement relating to the Securities to be delivered at the
relevant Time of Delivery;
(f) On or after the date hereof or any applicable Terms
Agreement (i) no downgrading shall have occurred in the rating accorded the
Company's debt securities or the Company's financial strength or claims paying
ability by any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced or otherwise given
notice to the Company that such organization has under surveillance, review or
watch with possible negative implications, its rating of any of the Company's
debt securities or the Company's financial strength or claims paying ability or
of any review for a possible change therein that does not indicate the direction
of the possible change;
(g) On or after the date hereof or of any applicable Terms
Agreement there shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange; (ii) a suspension or material limitation in trading in the Company's
securities on the New York Stock Exchange; (iii) a general moratorium on
commercial banking activities in New York declared by either Federal or New York
State authorities or a material disruption in the commercial banking or
securities settlement or clearance services in the United States; or; or (iv)
the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, or the
occurrence of any other calamity or crisis of change in financial, political or
economic conditions in the United States or elsewhere if the effect of any such
event specified in this clause (iv) in the judgment of such Agent makes it
impracticable or inadvisable to proceed with the solicitation of offers to
purchase Securities or the purchase of the Securities from the Company as
principal pursuant to the applicable Terms Agreement or otherwise, as the case
may be, on the terms and in the manner contemplated in the Prospectus as amended
or supplemented prior to the date of the Pricing Supplement relating to the
Securities;
(h) The Company shall have furnished or caused to be furnished
to such Agent a certificate or certificates of officers of the Company dated the
Commencement Date and each applicable date referred to in Section 4(k) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the case
may be, in such form and executed by such officers of the Company as shall be
satisfactory to such Agent, as to the accuracy of the representations and
warranties of the Company herein at and as of the Commencement Date or such
applicable date, as the case may be, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to the Commencement
Date or such applicable date, as the case may be, as to the matters set forth in
subsections (a) and (e) of this Section 6, and as to such other matters as such
Agent may reasonably request; and
(i) With respect to any Security denominated in a currency
other than the U.S. dollar, more than one currency or a composite currency or
any Security the principal or interest of which is indexed to such currency,
currencies or composite
-20-
currency, there shall not have occurred a suspension or material limitation in
foreign exchange trading in such currency, currencies or composite currency by a
major international bank, a general moratorium on commercial banking activities
in the country or countries issuing such currency, currencies or composite
currency, the outbreak or escalation of hostilities involving, the occurrence of
any material adverse change in the existing financial, political or economic
conditions of, or the declaration of war or a national emergency by, the country
or countries issuing such currency, currencies or composite currency or the
imposition or proposal of exchange controls by any governmental authority in the
country or countries issuing such currency, currencies or composite currency.
7. (a) The Company will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several, to which
such Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse such Agent for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company, shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement,
the Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by such Agent expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by such
Agent expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably
-21-
incurred by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect, not only such relative benefits but also the relative
fault of the Company on the one hand and each Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of such Securities (before
deducting expenses) received by the Company bear to the total
-22-
commissions or discounts received by such Agent in respect thereof. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading relates to information
supplied by the Company on the one hand or by any Agent on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and each Agent agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by per capita allocation (even if all Agents were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), an Agent shall not be
required to contribute any amount in excess of the amount by which the total
public offering price at which the Securities purchased by or through it were
sold exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of each of the Agents under this subsection (d) to contribute are
several in proportion to the respective purchases made by or through it to which
such loss, claim, damage or liability (or action in respect thereof) relates and
are not joint.
(e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Agent within the meaning of the Act; and the obligations of each Agent under
this Section 7 shall be in addition to any liability which such Agent may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities
from the Company and in performing the other obligations of such Agent hereunder
(other than in respect of any purchase by an Agent as principal, pursuant to a
written Terms Agreement or otherwise) is acting solely as agent for the Company
and not as principal. Each Agent will make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to purchase
Securities from the Company was solicited by such Agent and has been accepted by
the Company, but such Agent shall not have any liability to the Company in the
event such purchase is not consummated for any reason. If the Company shall
default on its obligation to deliver Securities to a purchaser whose offer it
has accepted, the Company shall (i) hold each Agent harmless against any loss,
claim or damage arising from or as a result of such default by the Company and
(ii) notwithstanding such default, pay to the Agent that
-23-
solicited such offer any commission to which it would be entitled in connection
with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent, or the Company, or
any officer or director or any controlling person of the Company, and shall
survive each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company may be suspended
or terminated at any time by the Company as to any Agent or by any Agent as to
such Agent upon the giving of written notice of such suspension or termination
to such Agent or the Company, as the case may be. In the event of such
suspension or termination with respect to any Agent, (x) this Agreement shall
remain in full force and effect with respect to any Agent as to which such
suspension or termination has not occurred, (y) this Agreement shall remain in
full force and effect with respect to the rights and obligations of any party
which have previously accrued or which relate to Securities which are already
issued, agreed to be issued or the subject of a pending offer at the time of
such suspension or termination and (z) in any event, this Agreement shall remain
in full force and effect insofar as the fourth paragraph of Section 2(a),
Section 4(d), Section 4(e), Section 5, Section 7, Section 8 and Section 9 hereof
are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Facsimile Transmission No. (212) 902-3000,
Attention: Registration Department, and if to J.P. Morgan Securities Inc. shall
be sufficient in all respects when delivered or sent by facsimile transmission
or registered mail to 270 Park Avenue, New York, New York 10017, Facsimile
Transmission No. 212-834-6702, Attention: Transaction Execution Group, 9th
Floor, and if to the Company shall be sufficient in all respects, when delivered
or sent by facsimile transmission or registered mail to it at its address set
forth in the Prospectus.
12. This Agreement and any Terms Agreement shall be binding
upon, and inure solely to the benefit of, each Agent and the Company, and to the
extent provided in Section 7, Section 8 and Section 9 hereof, the officers and
directors of the Company and any person who controls any Agent or the Company,
and their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any Agent hereunder shall be deemed a successor or assign by reason
merely of such purchase.
-24-
13. Time shall be of the essence in this Agreement and any
Terms Agreement. As used herein, the term "business day" shall mean any day when
the Commission's office in Washington, D.C. is open for business.
14. This Agreement and any Terms Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement may be executed by
any one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all of such respective
counterparts shall together constitute one and the same instrument.
-25-
If the foregoing is in accordance with your understanding,
please sign and return to us five counterparts hereof, whereupon this letter and
the acceptance by each of you thereof shall constitute a binding agreement
between the Company and each of you in accordance with its terms.
Very truly yours,
THE ST. PAUL COMPANIES, INC.
By: /s/ Thomas A. Bradley
-----------------------------------------
Name: Thomas A. Bradley
Title: Executive Vice President and
Chief Financial Officer
Accepted in New York, New York,
as of the date hereof:
/s/ Goldman, Sachs & Co.
- ------------------------------------
(Goldman, Sachs & Co.)
J.P. MORGAN SECURITIES INC.
By: /s/ Carl J. Mehldau
---------------------------------
Name: Carl J. Mehldau
Title: Vice President
-26-
ANNEX I
THE ST. PAUL COMPANIES, INC.
Medium-Term Notes, Series D
Due from 9 Months to 30 Years
from Date of Issue
Terms Agreement
__________, 20__
[Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.]
[J.P. Morgan Securities Inc.,
270 Park Avenue,
New York, New York 10017.]
Ladies and Gentlemen:
The St. Paul Companies, Inc. (the "Company") proposes, subject
to the terms and conditions stated herein and in the Distribution Agreement,
dated January 29, 2003 (the "Distribution Agreement"), between the Company on
the one hand and Goldman, Sachs & Co. and J.P. Morgan Securities Inc. (the
"Agents") on the other, to issue and sell to [Goldman, Sachs & Co.] [J.P. Morgan
Securities Inc.] the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto an
agent of the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase Securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and a warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in
the Distribution Agreement incorporated herein by reference, the Company agrees
to issue and sell to [Goldman, Sachs & Co.] [J.P. Morgan Securities Inc.] and
[Goldman, Sachs & Co.] [J.P.
Morgan Securities Inc.] agree(s) to purchase from the Company the Purchased
Securities, at the time and place, in the principal amount and at the purchase
price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us five counterparts hereof, and upon acceptance
hereof by you this letter and such acceptance hereof, including those provisions
of the Distribution Agreement incorporated herein by reference, shall constitute
a binding agreement between you and the Company.
THE ST. PAUL COMPANIES, INC.
By:
---------------------------
Name:
Title:
Accepted:
- --------------------------------
[(Goldman, Sachs & Co.)]
[J.P. MORGAN SECURITIES INC.
By:
------------------------------
Name:
Title:]
I-2
Schedule to Annex I
Title of Purchased Securities:
[ %] Medium-Term Notes, Series D]
Aggregate Principal Amount:
[$ ]
Price to Public:
Purchase Price by [Goldman, Sachs & Co.] [J.P. Morgan Securities Inc.]:
% of the principal amount of the Purchased Securities, plus
accrued interest, if any, from [ ] to [ ] [and accrued amortization, if
any, from [ ] to [ ]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of
the Company, in same day funds]
[By wire transfer to a bank account specified by the Company in [next
day] [immediately available] funds]
Indenture:
Indenture, dated as of March 12, 2002, between the Company and JPMorgan
Chase Bank, as Trustee
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates] [commencing _______]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall
be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to
in Section 4(h).]
[(2) The opinion of the General Counsel of the Company
referred to in Section 4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section
4(k).]
Other Provisions:
-2-
ANNEX II
THE ST. PAUL COMPANIES, INC.
Administrative Procedures
These Administrative Procedures relate to the Securities defined in the
Distribution Agreement, dated January 29, 2003 (the "Distribution Agreement"),
between The St. Paul Companies, Inc. (the "Company") and Goldman, Sachs & Co.
and J.P. Morgan Securities Inc. (together, the "Agents"), to which these
Administrative Procedures are attached as Annex II. Capitalized terms used
herein and not defined herein shall have the meanings given such terms in the
Distribution Agreement, the Prospectus as amended or supplemented or the
Indenture. To the extent the procedures set forth below conflict with the
provisions of the Securities, the Indenture or the Distribution Agreement, the
relevant provisions of the Securities, the Indenture and the Distribution
Agreement shall control.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in relation
to a purchase of a Security by a purchaser solicited by such Agent, is referred
to herein as the "Selling Agent" and, in relation to a purchase of a Security by
such Agent as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
the related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedures set forth in Part I hereof, and Certificated
Securities will be issued in accordance with the Administrative Procedures set
forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance
with its respective obligations under a Letter of Representations from the
Company and the Trustee to the Depositary, dated the date of the Distribution
Agreement, and a Medium-Term Note Certificate Agreement between the Trustee and
the Depositary, dated as of March 10, 1989 (the "Certificate Agreement"), and
its obligations as a participant in the Depositary, including the Depositary's
Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedures Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(3) Trade Date;
(4) Settlement Date;
II-2
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such
Specified Currency (it being understood that currently the
Depositary accepts deposits of Global Securities denominated
in U.S. dollars only);
(7) Exchange Rate Agent and the Exchange Rate Determination Date,
if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable or repayable Book-Entry Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of
the Redemption Commencement Date;
(iv) Repayment Date, and
(v) Repayment Price;
(12) If an Original Issue Discount Book-Entry Security, the total
amount of Original Issue Discount, the yield to Maturity and
the initial accrual period of Original Issue Discount;
(13) If a Floating Rate Book-Entry Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity and Index Currency,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
II-3
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates,
(xii) Calculation Agent, and
(xiii) Day Count Convention;
(14) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Company will assign a CUSIP number to the Global Security
representing such Book-Entry Security from a list of CUSIP numbers previously
delivered to the Company by the Agent and then advise the Trustee and the
Selling Agent or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Ratings Group (or such other entity that
assigns CUSIP numbers or any other identification designations being used for
the relevant Securities):
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary
on behalf of the Selling Agent or Purchasing Agent, as the
case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for
the Depositary's purposes (which in the case of Floating Rate
Securities which reset daily or weekly shall be the date five
calendar days immediately preceding the applicable Interest
Payment Date and in the case of all other Book-Entry
Securities shall be the Regular Record Date, as defined in the
Security)
II-4
and, if calculable at that time, the amount of interest payable on such Interest
Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission or discount, as the case may be. The entry of such a deliver order
shall constitute a representation and warranty by the Trustee to the Depositary
that (a) the Global Security representing such Book-Entry Security has been
issued and authenticated and (b) the Trustee is holding such Global Security
pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at a bank located in New York, New York,
or such other account as the Company may have previously specified to the
Trustee, in immediately available funds in the amount transferred to the Trustee
in accordance with Settlement Procedures "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
II-5
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 2:00 p.m., New York City time, on the Trade Date (as defined below), or if
the Company and the purchaser agree to settlement on the Business Day following
the date of acceptance of such offer, not later than noon, New York City time,
on such date. The Company will arrange to have ten Pricing Supplements filed
with the Commission not later than the close of business of the Commission on
the fifth Business Day following the date on which such Pricing Supplement is
first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedures Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
Settlement Procedures Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
TIME SETTLEMENT PROCEDURES
---- ---------------------
A. 2:00 P.M. on the Trade Date
II-6
B. 3:00 P.M. on the Trade Date
C. 5:00 P.M. No later than the close of business on the Trade Date
D. 9:00 A.M. on the Settlement Date
E. 10:00 A.M. on the Settlement Date
F-G. 2:00 P.M. on the Settlement Date
H. 4:45 P.M. on the Settlement Date
I. 5:00 P.M. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedures "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedures "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedures "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedure, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance
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and the other of which shall represent the remaining Book-Entry Securities
previously represented by the surrendered Global Security and shall bear the
CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedures I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the applicable Agent to perform
its obligations hereunder or under the Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for the loss of its use of funds
during the period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedures "D", for the authentication and issuance
of a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED SECURITIES
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject
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any offer received by it in whole or in part. Each Agent also may make offers to
the Company to purchase Certificated Securities as a Purchasing Agent. The
Company will have the sole right to accept offers to purchase Certificated
Securities and may reject any such offer in whole or in part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
initial interest payment date and the registration
information;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such
Specified Currency;
(7) Exchange Rate Agent and the Exchange Rate Determination Date,
if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable or repayable Certificated Security, such of
the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
II-9
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of
the Redemption Commencement Date;
(iv) Repayment Date, and
(v) Repayment Price;
(12) If an Original Issue Discount Certificated Security, the total
amount of Original Issue Discount, the yield to Maturity and
the initial accrual period of Original Issue Discount;
(13) If a Floating Rate Certificated Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity and Index Currency,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(14) Name, address and taxpayer identification number of the
registered owner(s);
(15) Denomination of certificates to be delivered at settlement;
and
(16) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and
II-10
arrange to have delivered to the Selling Agent or Purchasing Agent, as the case
may be, at least ten copies of such Pricing Supplement, not later than 5:00
p.m., New York City time, on the Business Day following the Trade Date, or if
the Company and the purchaser agree to settlement on the date of acceptance of
such offer, not later than noon, New York City time, on such date. The Company
will arrange to have ten Pricing Supplements filed with the Commission not later
than the close of business of the Commission on the fifth Business Day following
the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement as applicable) in relation to such Certificated Security prior to or
together with the earlier of the delivery to such purchaser or its agent of (a)
the confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the third Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
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In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Certificated Securities to the Purchasing Agent against delivery of
payment for such Certificated Securities in immediately available funds to the
Company in an amount equal to the issue price of the Certificated Securities
less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to
the Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
II-12
ANNEX III
Accountant's Letter
Pursuant to Section 4(j) and Section 6(d), as the case may be,
of the Distribution Agreement, the Company's independent certified public
accountants shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited by them and
included or incorporated by reference in the Registration Statement or
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and they have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the interim
consolidated condensed balance sheets and statements of income of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the Agents;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been furnished
to the Agents; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(v)(A) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's most recently filed Annual Report on Form 10-K agrees with
the corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for such five fiscal years
which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading
of the unaudited financial statements and other information referred to
below, a reading of the latest available interim financial statement of
the Company and certain of its subsidiaries, inspection of the minute
books of the Company and certain of its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company who
are responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated condensed balance sheets
and related unaudited consolidated condensed
statements of income, common shareholders' equity and
cash flows included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not
comply as to form in all material respects with the
applicable accounting requirements of the Exchange
Act as it applies to Form 10-Q and the related
published rules and regulations thereunder or are not
in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with the basis for the audited
consolidated statements of income, consolidated
balance sheets, consolidated statements of common
shareholders' equity and consolidated statements of
cash flows included or incorporated by reference in
the Company's most recently filed Annual Report on
Form 10-K or the Registration Statement;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited
consolidated financial statements from which such
data and items were derived, and any such unaudited
data and items were not determined on a basis
substantially consistent with the basis for the
corresponding amounts in the audited consolidated
financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
(C) any unaudited pro forma consolidated condensed
financial statements included or incorporated by
reference in the Prospectus do not comply as to form
in all material respects with the applicable
accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the
historical amounts in the compilation of those
statements;
(D) as of a specified date not more than five days prior
to the date of such letter, there have been any
changes in the consolidated capital stock of the
Company (other than issuances of capital stock upon
exercise of stock options and upon conversion of
Series B Convertible Preferred Stock, in each case
which were
III-2
outstanding on the date of the latest balance sheet
included or incorporated by reference in the
Prospectus) or any increase in the consolidated
short-term borrowings, or long-term debt of the
Company and its subsidiaries or any other items
specified by the Agents, or any decreases in any
items specified by the Agents, in each case as
compared with amounts shown in the latest balance
sheet included or incorporated by reference in the
Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in
such letter;
(E) at the date of the latest available incomplete
unaudited consolidated condensed balance sheet of the
Company and subsidiaries other than Minet Holdings
PLC, St. Paul (UK) Ltd. and subsidiaries owned or
managed by Minet Holdings PLC or St. Paul (UK) Ltd.
(the "Excluded Subsidiaries") there were any
decreases in total invested assets, total assets or
total net assets or other items reasonably specified
by the Agents, or any increases in any items
reasonably specified by the Agents, in each case as
compared with the amounts reflected in the incomplete
unaudited consolidated condensed balance sheet at the
date of the latest financial statements included or
incorporated by reference in the Prospectus, except
in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter; and
(F) for the period from the date of the latest income
statement included or incorporated by reference in
the Prospectus to the date of the latest available
incomplete unaudited consolidated condensed income
statement of the Company and subsidiaries other than
the Excluded Subsidiaries there were any decreases in
total revenues, operating earnings from continuing
operations, net income or earnings per share or other
items reasonably specified by the Agents, or any
increases in any items reasonably specified by the
Agents, in each case as compared with the incomplete
unaudited consolidated condensed income statement of
the Company and subsidiaries other than the Excluded
Subsidiaries for the comparable period of the
preceding year and with any other period of
corresponding length reasonably specified by the
Agents, except in each case for increases or
decreases which the Prospectus discloses have
occurred or may occur or which are described in such
letter; and
(vi) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iv) and (v) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and
III-3
financial information specified by the Agents which are derived from
the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by
reference), or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Agents or in documents
incorporated by reference in the Prospectus specified by the Agents,
and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Distribution Agreement as of the
Commencement Date referred to in Section 6(d) thereof and to the Prospectus as
amended or supplemented (including the documents incorporated by reference
therein) as of the date of the amendment, supplement, incorporation or the Time
of Delivery relating to the Terms Agreement requiring the delivery of such
letter under Section 4(j) thereof.
III-4