EXHIBIT 1.2
Mallinckrodt Inc.
$[ ]
MEDIUM-TERM NOTES
DISTRIBUTION AGREEMENT
.................., 19..
Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
Mallinckrodt Inc., a New York corporation (the "Company"), proposes to
issue and sell from time to time its Medium-Term Notes (the "Securities") in an
aggregate amount up to $[ ], which are among the debt securities registered
under the Registration Statement (as defined in Section 1(a) hereof), together
with such amount of the Company's debt securities subsequently registered under
the Securities Act of 1933, as amended (the "Act"), as the Company shall, by
notice to the Agent, make subject to this Agreement, but reduced by the
aggregate amount of debt securities so registered to be or that have been sold
otherwise than pursuant to this Agreement or any Terms Agreement (as defined
below) and agrees with Goldman, Sachs & Co. (the "Agent") as set forth in this
Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints the 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 the
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 the Agent to purchase Securities as principal.
The Securities will be issued under an indenture, dated as of March 15,
1985, as amended and restated as of February 15, 1995, and as may be further
amended and supplemented (the "Indenture"), between the Company and First Trust
of New York, National Association, as trustee (the "Trustee"). The Securities
shall have the maturity ranges, interest rates, if any, redemption provisions
and other terms set forth in the Prospectus referred to below as it may be
amended or 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, the Agent that:
(a) A registration statement on Form S-3 (File No. 333- )
in respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission"); such registration statement as it
may have been amended prior to its effectiveness and any post-effective
amendment thereto, each in the form heretofore delivered or to be
delivered to such Agent, has been declared effective by the Commission in
such form; no other document with respect to such registration statement
or document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission (other than the prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act and such other documents listed in Annex IV
hereto, each in the form heretofore delivered to the Agent); and no stop
order suspending the effectiveness of the registration statement has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act, is
hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective but excluding Form T-1, each as amended at the time such part of
the registration statement became effective, is hereinafter collectively
called the "Registration Statement"; the prospectus (including, if
applicable, any prospectus supplement) relating to the Securities, in the
form in which it has most recently been filed, or transmitted for filing,
with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the 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 Section 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 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, 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 none of such documents, at such time of
effectiveness or filing, as the case may be, 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
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documents become effective or are filed with the Commission, as the case
may be, will comply as to form 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, at such time of
effectiveness or filing, as the case may be, 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 the
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 comply as to form,
and any further amendments or supplements to the Registration Statement or
the Prospectus will comply as to form, in all material respects with 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 the Agent expressly for
use in the Prospectus as amended or supplemented to relate to a particular
issuance of Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (except for
subsequent issuances, if any, pursuant to reservations or agreements
referred to in the Prospectus and except for subsequent repurchases by the
Company not in excess of those disclosed in the Registration Statement as
authorized as of the date the Registration Statement becomes effective) or
any material change in long-term debt of the Company or any of its
subsidiaries or any material adverse change in or affecting the general
affairs, business prospects, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus (except for subsequent issuances, if any, pursuant to
reservations or agreements referred to in the Prospectus and except for
subsequent repurchases by the Company not in excess of those disclosed in
the Registration Statement as authorized as of the date the Registration
Statement becomes effective) and all of the issued shares of capital stock
of the Company have been duly
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and validly authorized and issued and are fully paid, and, except as may
be otherwise provided by Section 630 of the New York Business Corporation
Law, non-assessable;
(g) The Securities have been duly authorized, and, when issued,
authenticated, delivered and paid for pursuant to the Indenture, 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 (subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles) entitled to the benefits provided by the Indenture,
which will be substantially in the form filed as an exhibit to the
Registration Statement; the Indenture has been duly authorized and duly
qualified under the Trust Indenture Act and constitutes a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture conforms in all
material respects and the Securities of any particular issuance of
Securities will conform in all material respects to the descriptions
thereof contained in the Prospectus as amended or supplemented to relate
to such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation, as
amended, or the By-laws of the Company, as amended, or (to the best of the
Company's knowledge) any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its properties; 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 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 signifiant subsidiaries, as
such term is defined in Rule 1-02 of Regulation S-X ("Significant
Subsidiaries") is in violation of its Certificate of Incorporation, as
amended, or By-laws, as amended. Neither the Company nor any of its
subsidiaries is in default in the performance or observance of any
obligation, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties
may be bound;
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(j) The statements set forth in the Prospectus under the caption
"Description of the Securities", insofar as they purport to constitute a
summary of the terms of the Securities, under the caption "Federal Income
Tax Consequences", and under the caption "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, 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 have a
material adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(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) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(n) 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;
(o) Ernst & Young 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; and
(p) The Securities, when issued, authenticated and delivered pursuant
to the provisions of this Agreement, any Terms Agreement and the
Indenture, will be excluded or exempted under the provisions of the
Commodity Exchange Act.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the
Agent hereby 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 this Agreement shall
remain in effect with respect to the 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 9
months or more except pursuant to this Agreement, any Terms Agreement, or
except pursuant to a private placement not constituting a public offering
under the Act or except in connection with a firm commitment underwriting
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pursuant to an underwriting agreement that does not provide for a
continuous offering of medium-term debt securities. However, the Company
reserves the right to sell, and may solicit and accept offers to purchase,
Securities directly on its own behalf in transactions with persons other
than broker-dealers, and, in the case of any such sale not resulting from
a solicitation made by the Agent, no commission will be payable with
respect to such sale. These provisions shall not limit Section 4(f) hereof
or any similar provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each
case therefor shall be as set forth in the Administrative Procedure
attached hereto as Annex II as it may be amended from time to time by
written agreement between the Agent and the Company (the "Administrative
Procedure"). The provisions of the Administrative Procedure shall apply to
all transactions contemplated hereunder other than those made pursuant to
a Terms Agreement. The Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed by
each of them in the Administrative Procedure. The Company will furnish to
the Trustee a copy of the Administrative Procedure as from time to time in
effect.
The Company reserves the right, in its sole discretion, to instruct
the Agent 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 Agent will suspend
solicitation of offers to purchase Securities from the Company until such
time as the Company has advised the Agent 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 Agent that such solicitation may be resumed, however, the Company
shall simultaneously provide the documents required to be delivered by
Sections 4(h), 4(i), 4(j) and 4(k), and the Agent shall have no obligation
to solicit offers to purchase the Securities until such documents have
been received by the Agent. 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 Agent's 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 may authorize any other firm (an "Additional Agent") to
act as its agent to solicit offers for the purchase of Securities upon 24
hours' prior notice to the Agent. Each Additional Agent shall execute a
copy of this Agreement and become a party hereto. From and after the time
such Additional Agent shall have executed a copy of this Agreement, the
term "Agent" as used in this Agreement shall mean the Agent and such
Additional Agent.
The Company agrees to pay the 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:
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Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
------------------- -------------------
From 9 months to less than 1 year
From 1 year to less than 18 months
From 18 months to less than 2 years
From 2 years to less than 3 years
From 3 years to less than 4 years
From 4 years to less than 5 years
From 5 years to less than 6 years
From 6 years to less than 7 years
From 7 years to less than 10 years
From 10 years to less than 15 years
From 15 years to less than 20 years
From 20 years to 30 years
30 years and more
(b) Each sale of Securities to the Agent as principal shall be made
in accordance with the terms of this Agreement and (unless the Company and
the Agent shall otherwise agree) a Terms Agreement which will provide for
the sale of such Securities to, and the purchase thereof by, the Agent; a
Terms Agreement may also specify certain provisions relating to the
reoffering of such Securities by the Agent; the commitment of the 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 the 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 the Agent in the reoffering of the
Securities and the time and date and place of delivery of and payment for
such Securities; and such Terms Agreement shall also specify any
requirements for opinions of counsel, accountants' letters and officers'
certificates pursuant to Section 4 hereof. The 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 the Agent from the Company.
For each sale of Securities to the Agent as principal that is not
made pursuant to a Terms Agreement, the procedural details relating to the
issue and delivery of such Securities and payment therefor shall be as set
forth in the Administrative Procedure. For each such sale of Securities to
the 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 the Agent as principal, whether set forth in a Terms
Agreement or in accordance with the Administrative Procedure, is referred
to herein as a "Time of Delivery".
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(c) The Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such
Security in, or to residents of, the country issuing such currency, except
as permitted by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agent at the
offices of Mayer, Brown & Platt, Chicago, Illinois at 11:00 a.m., New York City
time, on the date of this Agreement, which date and time of such delivery may be
postponed by agreement between the Agent and the Company but in no event shall
be later than the day prior to the date on which solicitation of offers to
purchase Securities is commenced or on which any Terms Agreement is executed
(such time and date being referred to herein as the "Commencement Date").
4. The Company covenants and agrees with the 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 the Agent promptly after reasonable notice thereof or
(B) after the date of any Terms Agreement or other agreement by the Agent
to purchase Securities as principal and prior to the related Time of
Delivery which shall be reasonably disapproved by the Agent party to such
Terms Agreement or so purchasing as principal promptly after reasonable
notice thereof; (ii) to prepare, with respect to any Securities to be sold
through or to such Agent pursuant to this Agreement, a Pricing Supplement
with respect to such Securities in a form previously approved by such
Agent and to file such Pricing Supplement pursuant to Rule 424(b)(3) under
the Act not later than the close of business of the Commission on the
fifth business day after the date on which such Pricing Supplement is
first used; (iii) to make no amendment or supplement to the Registration
Statement or Prospectus, other than any Pricing Supplement, at any time
prior to having afforded the Agent a reasonable opportunity to review and
comment thereon; (iv) to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and during such
same period to advise such Agent, promptly after the Company receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or has become effective or any supplement to the
Prospectus or any amended Prospectus (other than any Pricing Supplement
that relates to Securities not purchased through or by such Agent) has
been filed with the Commission, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
of the initiation or 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 use promptly its best efforts to
obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as such Agent may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein 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;
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(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is
filed with the Commission pursuant to Rule 424 under the 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; the Company will
furnish without charge to the Agent and to any dealer in securities as
many copies as such Agent may from time to time reasonably request of an
amended prospectus or supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the 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, but in no event later
than three years after the last issuance of Securities issued pursuant to
this Agreement, to furnish to such Agent copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver
to such Agent (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as such Agent may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and
continuing the Time of Delivery, not to offer,
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sell, contract to sell or otherwise dispose of any debt securities of the
Company which both mature more than 9 months after such Time of Delivery
and are substantially similar to the Securities, without the prior written
consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal
not pursuant to a Terms Agreement), and each execution and delivery by the
Company of a Terms Agreement with such Agent, shall be deemed to be an
affirmation to such Agent that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and
correct as of the date of such acceptance or of such Terms Agreement, as
the case may be, as though made at and as of such date, and an undertaking
that such representations and warranties will be true and correct as of
the settlement date for the Securities relating to such acceptance or as
of the Time of Delivery relating to such sale, as the case may be, as
though made at and as of such date (except that such representations and
warranties shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented relating to such Securities);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than
by a Pricing Supplement), each time a 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
Terms Agreement and such Terms Agreement specifies the delivery of an
opinion or opinions by Mayer, Brown & Platt, counsel to the Agent, as a
condition to the purchase of Securities pursuant to such Terms Agreement,
the Company shall furnish to such counsel such papers and information as
they may reasonably request to enable them to furnish to such Agent the
opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement or a
prospectus supplement which relates to an offering of debt securities
other than the Securities), each time a document filed under the Act
or the Exchange Act is incorporated by reference into the Prospectus and
each time the Company sells Securities to such Agent as principal pursuant
to a Terms Agreement and such Terms Agreement specifies the delivery of
opinions 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 White &
Case, counsel for the Company, or other counsel for the Company
satisfactory to such Agent, and a written opinion of the general counsel
of the Company 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
opinions of such counsel referred to in Sections 6(c) and 6(d) hereof
which were last furnished to such Agent to the same extent as though they
were dated the date of such letter authorizing reliance (except that the
statements in such last opinions shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date) or, in lieu of such opinions, opinions of the same tenor as the
opinions of such counsel referred to in Sections 6(c) and 6(d) hereof but
modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date. Notwithstanding the foregoing, the
written opinion of White & Case, or other counsel for the Company
satisfactory to the Agent, shall refer to matters specified in Section
6(c)(ix) of this Agreement to the extent that (i) such matters were not
referred to in the opinion last given by such counsel and (ii) such
matters are required to be referred to by Section 6(c)(ix) of this
Agreement;
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the
Act or the Exchange Act is
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incorporated by reference into the Prospectus, in either case to set forth
financial information included in or derived from the Company's
consolidated financial statements or accounting records, and each time the
Company sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a letter
under this Section 4(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, in form satisfactory
to such Agent, of the same tenor as the letter referred to in Section 6(e)
hereof but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date of such letter, with
such changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting records of
the Company, to the extent such financial statements and other information
are available as of a date not more than five business days prior to the
date of such letter; provided, however, that, with respect to any
financial information or other matter, such letter may reconfirm as true
and correct at such date as though made at and as of such date, rather
than repeat, statements with respect to such financial information or
other matter made in the letter referred to in Section 6(e) hereof which
was last furnished to such Agent;
(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 and the applicable 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(j) 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(j) 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 Procedure,
any condition set forth in Section 6(a), 6(f), 6(g) or 6(h) 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 judgment of the Agent with respect to certain matters
referred to in such Sections 6(f) and 6(h), and that such Agent shall have
no duty or obligation whatsoever to exercise the judgment permitted under
such Sections 6(f) and 6(h) on behalf of any such person).
5. The Company covenants and agrees with the 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, production, reproduction, printing and filing of the Registration
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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 Agent in connection with the
establishment of the program contemplated hereby, any opinions to be rendered by
such counsel hereunder and under any Terms Agreement and the transactions
contemplated hereunder and under any Terms Agreement; (iii) the cost of
printing, producing or reproducing this Agreement, any Terms Agreement, any
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 Securities for offering and sale
under state securities laws as provided in Section 4(b) hereof, including the
reasonable fees and disbursements of counsel for the Agent 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 Agent 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 the Securities; (viii) the reasonable
fees and expenses of any Trustee and any agent of any Trustee and any transfer
or paying agent of the Company and the fees and disbursements of counsel for any
Trustee or such agent in connection with any Indenture and the Securities; (ix)
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 by the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder which are not otherwise
specifically provided for in this Section. Except as provided in Sections 7 and
8 hereof, the Agent shall pay all other expenses it incurs.
6. The obligation of the Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of the Agent to purchase Securities as principal, pursuant to any
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 the Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(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 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)Mayer Brown & Platt, counsel to the Agent, shall have
furnished to such Agent (i) such opinion or opinions, dated the
Commencement Date, with respect to the matters covered in paragraphs
(i) (insofar as it relates to the Company's valid existence and good
standing), (ii) (insofar as it relates to the authorized
capitalization of the Company) (iii), (iv),
I-12
(v), (vii), (viii), (x) and (xi) of subsection (c) below, as well as
such other related matters as such Agent may reasonably request, and
(ii) if and to the extent reasonably 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)White & Case, counsel for the Company, or other counsel for
the Company satisfactory to such Agent, shall have furnished to such
Agent their written opinions, dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof (with the exception
of the matters covered in paragraph (ix) of this subsection which will
be furnished at such times as required therein) that is on or prior to
such Solicitation Time or Time of Delivery, as the case may be, in
form and substance satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with 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 capitalization as set forth
in the Prospectus as amended or supplemented (except for subsequent
issuances, if any, pursuant to reservations or agreements referred
to in the Prospectus and except for subsequent repurchases by the
Company not in excess of those disclosed in the Registration
Statement as authorized as of the date the Registration Statement
becomes effective) and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and, except as may be otherwise provided by Section 630
of the New York Business Corporation Law, non-assessable;
(iii) This Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company;
(iv) The Securities have been duly authorized and, when duly
executed, authenticated, issued, paid for and delivered, will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture (subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles); and the Indenture conforms
and the Securities will conform in all material respects to the
descriptions thereof in the Prospectus as amended or supplemented;
(v) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and
I-13
other 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;
(vi) No consent, approval, authorization, order, registration
or qualification of or with any Federal or New York state 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 or Blue Sky laws in connection with the
solicitation by the Agent of offers to purchase Securities from the
Company and with purchases of Securities by the Agent as principal,
as the case may be, in each case in the manner contemplated hereby;
(vii) The statements set forth in the Prospectus under the
caption "Description of the Securities", insofar as they purport to
constitute a summary of the terms of the Securities, under the
caption "Federal Income Tax Consequences", and under the caption
"Plan of Distribution", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(viii) The Company is not and, after giving effect to the
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;
(ix) The Securities when issued, authenticated and delivered
pursuant to the provisions of this Agreement and the Indenture, will
be excluded or exempted from the provisions of the Commodity
Exchange Act, assuming the accuracy of any certifications of factual
matters furnished by the Agent in writing to the Company in
connection with the issuance thereof. The opinion specified in this
Section 6(c)(ix) shall be required only upon the request of the
Agent in connection with a specific issuance of Securities pursuant
to this Agreement.
(x) The documents incorporated by reference in the Prospectus
(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 nothing has come to
such counsel's attention that has caused them to believe that any of
such documents (other than the financial statements and related
schedules therein, as to which such counsel need express no belief),
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, and, 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
(xi) The Registration Statement and the Prospectus as amended
and supplemented and any further amendments and supplements thereto
made by the Company prior to the date of such opinion (other than
the financial statements and related schedules therein,
I-14
as to which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations thereunder;
although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred
to in the opinion in subsection (vii) of this Section 6(c), nothing
has come to such counsel's attention that has caused them 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 the
date of such opinion, 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;
(d) The general counsel of the Company shall have furnished to
such Agent his written opinions dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof that is on or prior
to such Solicitation Time or Time of Delivery, as the case may be, in
form and substance satisfactory to such Agent to the extent that:
(i) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or 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 have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(ii) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any applicable Terms Agreement and the
consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company
is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation, as amended, of the Company or the 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
properties;
(iii) 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
I-15
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 or Blue Sky laws in connection with
the solicitation by the Agent of offers to purchase Securities from
the Company and with purchases of Securities by the Agent as
principal, as the case may be, in each case in the manner
contemplated hereby;
(iv) 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; and
(v) Neither the Company nor any of its Significant Subsidiaries
is in violation of its Certificate of Incorporation, as amended, or
By-laws, as amended. To the best of such counsel's knowledge,
neither the Company nor any of its subsidiaries is in default in the
performance or observance of any obligation, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(e) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in Section
4(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 such applicable date, as the case may
be, in form and substance satisfactory to such Agent, to the effect
set forth in Annex III hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended or supplemented prior to the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of
Delivery any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus 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
or any of its subsidiaries or any change, or any development involving
a prospective change, in or affecting the general affairs, business
prospects, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented 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 manner contemplated in the
Prospectus as amended
I-16
or supplemented prior to the date of the Pricing Supplement relating
to the Securities to be delivered at the relevant Time of Delivery;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization," as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities in New York or Illinois (in the case
of Illinois, only to the extent that a general moratorium on
commercial banking activities in Illinois affects the Agent's ability
to fulfill its obligations hereunder) declared by either Federal, New
York State or Illinois authorities; or (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any
such event specified in this Clause (iv) in the judgment of such Agent
makes it impracticable or inadvisable to proceed with the solicitation
of offers to purchase Securities or the purchase of the Securities
from the Company as principal pursuant to the applicable Terms
Agreement or otherwise, as the case may be, on the terms and in the
manner contemplated in the Prospectus;
(i) With respect to any Security denominated in a currency other
than the U.S. dollar, more than one currency or a composite currency
or any Security the principal or interest of which is indexed to such
currency, currencies or composite currency, there shall not have
occurred a suspension or material limitation in foreign exchange
trading in such currency, currencies or composite currency by a major
international bank, a general moratorium on commercial banking
activities in the country or countries issuing such currency,
currencies or composite currency, the outbreak or escalation of
hostilities involving, the occurrence of any material adverse change
in the existing financial, political or economic conditions of, or the
declaration of war or a national emergency by, the country or
countries issuing such currency, currencies or composite currency or
the imposition or proposal of exchange controls by any governmental
authority in the country or countries issuing such currency,
currencies or composite currency; and
(j) The Company shall have furnished or caused to be furnished to
such Agent certificates of the Chairman or a Vice President and the
Controller or Treasurer 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 as shall be reasonably satisfactory to such Agent, as
to the accuracy of the representations and warranties of the Company
herein at and as of the Commencement Date or such applicable date, as
the case may be, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Commencement
Date or such applicable date, as the case may be, as to the matters
set forth in subsections (a) and (f) of this Section 6, and as to such
other matters as such Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless the 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)
I-17
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, 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, any preliminary prospectus supplement, 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) The 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, any preliminary prospectus
supplement, 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, any
preliminary prospectus supplement, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under
such subsection. In case any 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
I-18
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 the 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 the 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 the Agent on the other shall
be deemed to be in the same proportion as the total net proceeds from the
sale of Securities (before deducting expenses) received by the Company
bear to the total commissions or discounts received by such Agent in
respect thereof. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading relates to information supplied by the Company on
the one hand or by the 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 the 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 the Agent
and any Additional 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), the 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 the Agent 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.
I-19
(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 the Agent within the meaning of the Act; and the obligations of
the 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. The 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 the Agent as principal, pursuant to a Terms Agreement
or otherwise), is acting solely as agent for the Company and not as principal.
The 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 the Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties and
other statements by the 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 the Agent or any controlling person of the 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 the Agent or by the 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 the Agent, (x) this Agreement shall remain in full force and effect
with respect to the Agent as to which such suspension or termination has not
occurred, (y) this Agreement shall remain in full force and effect with respect
to the rights and obligations of any party which have previously accrued or
which relate to Securities which are already issued, agreed to be issued or the
subject of a pending offer at the time of such suspension or termination and (z)
in any event, this Agreement shall remain in full force and effect insofar as
the fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9
hereof are concerned.
11. Except as otherwise specifically provided herein, in the applicable
Terms Agreement or in the Administrative Procedure, all statements, requests,
notices and advices hereunder shall be in writing, or by telephone if promptly
confirmed in writing, and if to (i) 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)
357-8680, Attention: Credit Department, Credit Control--Medium-Term Notes, and
(ii) the Company shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to the address of the Company set
forth in the Registration Statement: Attention: Secretary.
12. This Agreement and any Terms Agreement shall be binding upon, and inure
solely to the benefit of, the Agent and the Company, and to the extent provided
in Sections 7, 8 and 9 hereof, the officers and directors of the Company and any
person who controls the Agent or the Company, and their
I-20
respective heirs, executors, administrators, representatives, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement or any Terms Agreement. No purchaser of any of the Securities
through or from the Agent hereunder shall be deemed a successor or assign by
reason merely of such purchase.
13. Time shall be of the essence in this Agreement and any Terms Agreement.
As used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
I-21
If the foregoing is in accordance with your understanding, please sign and
return to us 10 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,
Mallinckrodt Inc.
By:____________________________
Accepted in New York, New York, Name:
as of the date hereof: Title:
By:_________________________________
(Goldman, Sachs & Co.)
By:__________________________________
Name:
Title:
I-22
ANNEX I
MALLINCKRODT INC.
DEBT SECURITIES
TERMS AGREEMENT
..................., 19..
Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
Mallinckrodt Inc., a New York company, (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution Agreement, dated
......................., 19.. (the "Distribution Agreement"), between the
Company on the one hand and Goldman, Sachs & Co. (the "Agent") on the other, to
issue and sell to Goldman, Sachs & Co. 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 Agent, as agent 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 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. and Goldman, Sachs & Co. agrees 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 10 counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those
I-1
provisions of the Distribution Agreement incorporated herein by reference, shall
constitute a binding agreement between you and the Company.
Mallinckrodt Inc.
By:_________________________
Name:
Title:
Accepted:
Goldman, Sachs & Co.
By:_______________________
Name: Title:
I-2
SCHEDULE TO ANNEX I
Title of Purchased Securities:
[ %] Medium-Term Notes[, SERIES ....]
Aggregate Principal Amount:
[$.................... OR UNITS OF OTHER SPECIFIED CURRENCY]
[PRICE TO PUBLIC:]
Purchase Price by [NAME OF AGENT]
% of the principal amount of the Purchased Securities[, PLUS ACCRUED
INTEREST FROM ............... TO ...............] [AND ACCRUED AMORTIZATION, IF
ANY, FROM ................. TO ................]
Method of and Specified Funds for Payment of Purchase Price:
[BY CERTIFIED OR OFFICIAL BANK CHECK OR CHECKS, PAYABLE TO THE ORDER OF
THE COMPANY, IN [[NEW YORK] CLEARING HOUSE] [IMMEDIATELY AVAILABLE] FUNDS]
[BY WIRE TRANSFER TO A BANK ACCOUNT SPECIFIED BY THE COMPANY IN [NEXT DAY]
[IMMEDIATELY AVAILABLE] FUNDS]
Indenture:
Indenture, dated as of March 15, 1985, as amended and restated as of
February 15, 1995, and as may be further amended and supplemented, between
the Company and First Trust of New York, National Association, as trustee
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[MONTHS AND DATES]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) THE OPINION OR OPINIONS OF COUNSEL TO THE AGENT REFERRED TO IN
SECTION 4(H).]
[(2) THE OPINION OF COUNSEL TO THE COMPANY AND THE OPINION OF 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).]
I-3
Other Provisions (including Syndicate Provisions, if applicable):
I-4
ANNEX II
MALLINCKRODT GROUP, INC.
ADMINISTRATIVE PROCEDURE
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated ......................, 19.. (the "Distribution
Agreement"), between Mallinckrodt Inc. (the "Company") and Goldman, Sachs & Co.
( the "Agent"), to which this Administrative Procedure is attached as Annex II.
Defined terms used herein and not defined herein shall have the meanings given
such terms in the Distribution Agreement, the Prospectus as amended or
supplemented or the Indenture.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by the Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by the 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. The 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 the 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 the 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 or the applicable Pricing Supplement.
Book-Entry Securities will be issued in accordance with the Administrative
Procedure set forth in Part I hereof, and Certificated Securities will be issued
in accordance with the Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- -----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of .................., 19.. (the "Certificate
Agreement"), and its obligations as a participant in the Depositary, including
the Depositary's Same-Day Funds Settlement System ("SDFS").
II-1
Posting Rates by the Company:
The Company and the Agent 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 the 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 Agent to suspend solicitation of offers until the new
posted rates have been established with the Agent.
Acceptance of Offers by the Company:
The 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. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the case
may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and initial
interest payment date;
(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
(it being understood that currently the Depositary accepts deposits
of Global Securities denominated in U.S. dollars only);
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Interest Payment Dates;
(10) Regular Record Dates;
(11) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(12) Net Proceeds to the Company;
II-2
(13) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption
Commencement Date;
(14) If a Floating Rate Book-Entry Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(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) Calculation Agent; and
(xi) Initial Interest Payment Date;
(15) Name, address and taxpayer identification number of the registered
owner(s);
(16) Denomination of certificates to be delivered at settlement;
(17) Book-Entry Security or Certificated Security; and
(18) 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 Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
(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;
II-3
(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 (or, in the case of Floating Rate Securities
which reset daily or weekly, the date five calendar days immediately
preceding the applicable Interest Payment Date and, in the case of
all other Book-Entry Securities, the Regular Record Date, as defined
in the Security) and, if calculable at that time, the amount of
interest payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such
Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
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 Morgan Guaranty Trust Company of New York,
[Address], New York, New York [Zip Code], or such other account as the Company
may have previously specified to the Trustee, in funds available for immediate
use in the amount transferred to the Trustee in accordance with Settlement
Procedure "F".
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to the
purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
II-4
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 5:00
p.m., New York City time, on the Business Day following the Trade Date (as
defined below), or if the Company and the purchaser agree to settlement on the
Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have 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 (or such lesser period as may then be
required by the Commission) after the Trade Date pursuant to the "Settlement
Procedure Timetable" set forth below, unless the Company and the purchaser agree
to settlement on another Business Day which shall be no earlier than the next
Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day (or such lesser
period as may then be required by the Commission) after the Trade Date,
Settlement Procedures "A" through "I" set forth above shall be completed as soon
as possible but not later than the respective times (New York City time) set
forth below:
SETTLEMENT
PROCEDURE Time
- --------- ----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00
a.m. on the Business Day prior to the Settlement Date,
whichever is earlier
B 12:00 noon on the second Business Day immediately
preceding the Settlement Date
C 2:00 p.m. on the second Business Day immediately
preceding the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
II-5
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry Security has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to the
participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the 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.
II-6
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Security, the Depositary may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Securities to have
been represented by a Global Security, the Trustee will provide, in accordance
with Settlement Procedure "D", for the authentication and issuance of a Global
Security representing the other Book-Entry Securities to have been represented
by such Global Security and will make appropriate entries in its records. The
Company will, from time to time, furnish the Trustee with a sufficient quantity
of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
- --------------------------------------------------------------
Posting Rates by Company:
The Company and the Agent 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 the 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 Agent to suspend solicitation of offers until
the new posted rates have been established with the Agent.
Acceptance of Offers by Company:
The 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. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
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;
(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) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
II-7
(8) Issue Price;
(9) Interest Payment Dates;
(10) Regular Record Dates;
(11) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(12) Net Proceeds to the Company;
(13) If a redeemable Certificated Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(1) If a Floating Rate Certificated Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(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) Calculation Agent; and
(xi) Initial Interest Payment Date;
(2) Name, address and taxpayer identification number of the registered
owner(s);
(3) Denomination of certificates to be delivered at settlement;
(4) Book-Entry Security or Certificated Security; and
(5) 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 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.
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Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated Security
a written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Certificated Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Certificated Security.
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 fifth Business Day (or such lesser period as may
then be required by the Commission) after the date of acceptance of such offer,
unless the Company and the purchaser agree to settlement (a) on another Business
Day after the acceptance of such offer or (b) with respect to an offer accepted
by the Company prior to 10:00 a.m., New York City time, on the date of such
acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated Securities
no later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 3:00 p.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Selling Agent's commission; provided that the
Selling Agent reserves the right to withhold payment for which it has not
received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent, the
Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Certificated Securities to the Purchasing Agent against delivery of payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
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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-10
ANNEX III
ACCOUNTANTS' LETTER
-------------------
Pursuant to Sections 4(j) and 6(e), 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 auditors 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 consolidated financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the Agent;
(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 Agent; 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 (vi)(A)(i) 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
thereunder, 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 Annual
Report on Form 10-K for the most recent fiscal year agrees with or is
derived from (specifying in each case which) the corresponding amounts
(after restatement where applicable) in the audited consolidated financial
statements for five such fiscal years which were included or incorporated
by reference in the Company's Annual Reports on Form 10-K for such fiscal
years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
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(vi) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company, inspection of the minute books of the Company
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came
to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus (i) do not comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations thereunder, or (ii) are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included or incorporated by reference in the more recent
of the Company's Annual Report on Form 10-K for the most recent
fiscal year or the Prospectus;
(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
more recent of the Company's Annual Report on Form 10-K for the most
recent fiscal year or the Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
more recent of the Company's Annual Report on Form 10-K for the most
recent fiscal year or the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder and, if applicable, the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of those statements;
(E) 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 (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Agent, as agreed
to by the auditors, or
III-2
any increases in any items specified by the Agent, as agreed to by
the auditors, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Agent, as agreed to by the auditors, or any increases in any
items specified by the Agent, as agreed to by the auditors, in each
case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the Agent,
as agreed to by the auditors, 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
(vii)In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages
and financial information specified by the Agent, as agreed to by the
auditors, 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 Agent, as agreed
to by the auditors, or in documents incorporated by reference in the
Prospectus specified by the Agent, as agreed to by the auditors, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(e) thereof and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) as of the date of the
amendment, supplement, incorporation or the Time of Delivery relating to the
Terms Agreement requiring the delivery of such letter under Section 4(j)
thereof.
III-3
ANNEX IV
List of Documents: