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EXHIBIT 1.2
Williams Holdings of Delaware, Inc.
$________________
Medium-Term Notes
Due More Than 9 Months from Date of Issue
U.S. DISTRIBUTION AGREEMENT
______________ 199__
[Underwriter ____________
_________________________
_________________________]
Dear Sirs:
Williams Holdings of Delaware, Inc., a Delaware corporation
(the "Company"), confirms its agreement with you with respect to the issue and
sale by the Company of up to $______________ (or the equivalent thereof in a
foreign currency or composite currency) aggregate initial public offering price
of its Medium-Term Notes due more than 9 months from date of issue (the
"Notes"). The Notes may be issued as senior indebtedness (the "Senior Notes")
or as subordinated indebtedness (the "Subordinated Notes") of the Company. The
Senior Notes will be issued pursuant to the provisions of a senior debt
indenture dated as of ___________ 199__ (as it may be supplemented or amended
from time to time, the "Senior Debt Indenture"), between the Company and
Citibank, N.A., as trustee. The Subordinated Notes will be issued pursuant to
the provisions of a subordinated debt indenture dated as of ___________, 199__
(as it may be supplemented or amended from time to time, the "Subordinated Debt
Indenture"), between the Company and Citibank, N.A., as trustee. The Senior
Debt Indenture and the Subordinated Debt Indenture are sometimes hereinafter
referred to individually as an "Indenture" and collectively as the
"Indentures", and Citibank, N.A. is sometimes referred to as the "Trustee".
The Notes will be issued in denominations of $100,000 (or, in the case of Notes
not denominated in U.S. dollars, the equivalent thereof in such foreign
currency or composite currency, rounded down to the nearest 1,000 units of such
foreign currency or composite currency) or any amount in excess thereof which
is an integral multiple of $1,000 (or, in the case of Notes not denominated in
U.S. dollars, 1,000 units of such foreign currency or composite currency). The
Notes will bear interest at rates to be provided in a supplement to the Basic
Prospectus referred to below.
The Company hereby appoints you as its exclusive agent for the purpose
of soliciting offers to purchase Notes from the Company by
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others and, on the basis of the representations and warranties herein
contained, but subject to terms and conditions herein set forth, you agree to
use your best efforts to solicit offers to purchase Notes upon terms acceptable
to the Company at such times and in such amounts as the Company shall from time
to time specify. In addition, you may also purchase Notes as principal for
resale to others, and, if requested by you, the Company will enter into a Terms
Agreement relating to such sale (a "Terms Agreement") in accordance with the
provisions of Section 2(b) hereof.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Notes. Such registration statement, including the exhibits thereto, as amended
at the date of this Agreement, is hereinafter referred to as the "Registration
Statement". The Company proposes to file with the Commission from time to
time, pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Securities Act"), supplements to the prospectus included in the Registration
Statement that will describe certain terms of the Notes. The prospectus in the
form in which it appears in the Registration Statement is hereinafter referred
to as the "Basic Prospectus". The term "Prospectus" means the Basic Prospectus
together with the prospectus supplement or supplements (each a "Prospectus
Supplement") specifically relating to Notes, as filed with, or transmitted for
filing to, the Commission pursuant to Rule 424. As used herein, the terms
"Registration Statement", "Basic Prospectus", "Prospectus" and "Prospectus
Supplement" shall include in each case the documents, if any, incorporated by
reference therein. The terms "supplement" and "amendment" or "amend" as used
herein shall include all documents filed by the Company pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent to
the date of the Basic Prospectus that are deemed to be incorporated by
reference in the Prospectus.
1. Representations and Warranties. The Company
represents and warrants to you as of the Commencement Date (as hereinafter
defined), as of each date on which the Company accepts an offer to purchase
Notes, as of each date the Company issues and sells Notes and as of each date
the Registration Statement or the Basic Prospectus is amended or supplemented,
as follows (it being understood that such representations and warranties shall
be deemed to relate to the Registration Statement, the Basic Prospectus and the
Prospectus, each as amended and supplemented to each such date):
(a) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to the
knowledge of the Company, threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the Registration
Statement and the Prospectus complied or will comply when
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so filed in all material respects with the Exchange Act and the applicable
rules and regulations thereunder, (ii) each part of the Registration Statement,
when such part became effective or was incorporated by reference into the
Registration Statement, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of circumstances under which
they were made, not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act and the applicable rules and
regulations thereunder and (iv) the Registration Statement and the Prospectus
do not contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 1(b) do not apply (i) to statements or
omissions in the Registration Statement or the Prospectus based upon
information concerning the Agent furnished to the Company in writing by you
expressly for use therein or (ii) to that part of the Registration Statement
that constitutes the Statements of Eligibility and Qualification (Form T-1)
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
of the Trustees.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Delaware and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, considered as one
enterprise.
(d) Each of Williams Communications Group, Inc. and
Williams Energy Group (the "Material Subsidiaries") has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(e) Each of this Agreement and any applicable Terms
Agreement has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, except
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as rights to indemnity and contribution hereunder or thereunder may be limited
under applicable law.
(f) The Indenture pursuant to which the Notes will be
issued has been duly authorized, executed and delivered by the Company, is a
valid and binding agreement of the Company and has been duly qualified under
the Trust Indenture Act.
(g) The forms of Notes have been duly authorized, and,
when the Notes have been executed and authenticated in accordance with the
provisions of the relevant Indenture and delivered to and duly paid for by the
purchasers thereof, they will be valid and legally binding obligations of the
Company and will be entitled to the benefits of such Indenture.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indentures, the Notes and any applicable Terms Agreement will not contravene
any provision of applicable law or the certificate of incorporation or by-laws
of the Company or any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its subsidiaries,
considered as one enterprise, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval or authorization of any governmental body
or agency is required for the performance by the Company of its obligations
under this Agreement, the Indentures, the Notes or any applicable Terms
Agreement, except such as may be required by the securities or blue sky laws of
the various states in connection with the offer and sale of the Notes.
(i) There has not been any material adverse change, or
any development which could reasonably be expected to result in a prospective
material adverse change, in the financial condition, or in the earnings,
business or operations of the Company and its subsidiaries, considered as one
enterprise, from that set forth in the Registration Statement.
(j) There are no legal or governmental proceeding pending
or, to the knowledge of the Company, threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that are not described or filed as
required.
(k) Each of the Company and its subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings
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with, all federal, state, local and other governmental authorities and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Prospectus,
as then amended or supplemented, except to the extent that the failure to
obtain or file would not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. In connection with your
actions as Agent hereunder, you will use your best efforts to solicit offers to
purchase Notes upon the terms and conditions set forth in the Prospectus as
then amended or supplemented.
The Company reserves the right, in its sole discretion, to
instruct you to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Notes. Upon receipt of at least one
business day's prior notice from the Company, you will forthwith suspend
solicitations of offers to purchase Notes from the Company until such time as
the Company has advised you that such solicitation may be resumed. During the
period of time that such solicitation is suspended, the Company shall not be
required to deliver any certificates, opinions or letters in accordance with
Sections 5(a), 5(b) and 5(c); provided, however, that if the Registration
Statement or Prospectus is amended or supplemented (other than by an amendment
or supplement providing solely for a change in the interest rates, redemption
provisions, amortization schedules or maturities offered on the Notes or for a
change deemed immaterial in your reasonable opinion) during the period of
suspension, you shall not be required to resume soliciting offers to purchase
Notes until the Company has delivered such certificates, opinions and letters
as you may request.
The Company agrees to pay to you, as consideration for the
sale of each Note resulting from a solicitation made by you, a commission in
the form of a discount from the purchase price of such Note equal to between
.___% and .___% of such purchase price, depending upon such Note's maturity.
You are authorized to solicit offers to purchase Notes only in
the principal amount of $100,000 (or, in the case of Notes not denominated in
U.S. dollars, the equivalent thereof in such foreign currency or composite
currency, rounded down to the nearest 1,000 units of such foreign currency or
composite currency)' or any amount in excess thereof which is an integral
multiple of $1,000 (or, in the case of Notes not denominated in U.S. dollars,
1,000 units of such foreign currency or composite currency). You shall
communicate to the Company, orally or in writing, each offer to purchase Notes
received by you as agent that in your judgment should be considered by the
Company. The Company shall have the sole right to accept offers to purchase
Notes and may reject any offer in whole or in part. You
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shall have the right to reject any offer to purchase Notes that you consider to
be unacceptable, and any such rejection shall not be deemed a breach of your
agreements contained herein.
(b) Purchases as Principal. If requested by you in connection
with a sale of Notes directly to you as principal for resale to others, the
Company will enter into a separate Terms Agreement (with terms acceptable to it
and to you) that will provide for the sale of such Notes to and the purchase
and re-offering thereof by you in accordance with the terms of this Agreement
and the Terms Agreement. Each Terms Agreement shall be substantially in the
form of Exhibit A hereto but may take the form of an exchange of any form of
written telecommunication between you and the Company.
Your commitment to purchase Notes as principal shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions
herein set forth. Each agreement by you to purchase Notes as principal
(whether or not set forth in a Terms Agreement) shall specify the principal
amount of Notes to be purchased by you pursuant thereto, the maturity date
thereof, the price to be paid to the Company for such Notes and the time and
place of delivery of and payment for such Notes (each such date, a "Settlement
Date"). Each such agreement shall also specify any requirements for officers'
certificates, opinions of counsel and letters from the independent public
accountants of the Company pursuant to Section 4 hereof.
(c) Procedures. You and the Company agree to perform the
respective duties and obligations specifically provided to be performed in the
Medium Term Notes Administrative Procedures (attached hereto as Exhibit B) (the
"Procedures"), as amended from time to time. The Procedures may be amended
only by written agreement of the Company and you.
(d) Delivery. The documents required to be delivered by
Section 4 of this Agreement shall be delivered at the office of Davis Polk &
Wardwell, your counsel, not later than 4 p.m., New York time, on the date
hereof, or at such other time and/or place as you and the Company may agree upon
in writing (the "Commencement Date").
3. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes
pursuant to this Agreement or any Terms Agreement, the Company will not file
any Prospectus Supplement relating to the Notes or any amendment to the
Registration Statement unless the Company has previously furnished to you a
copy thereof for your review and will not file any such proposed supplement or
amendment to which you reasonably object; provided, however, that the foregoing
requirement shall not apply to any of the Company's periodic filings with the
Commission which may be required to be filed pursuant to Section
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13(a), 13(c), 13(f), 14 or 15(d) of the Exchange Act, copies of which filings,
if any, the Company will cause to be delivered to you promptly after being
transmitted for filing with the Commission. Subject to the foregoing sentence,
the Company will promptly cause each Prospectus Supplement to be filed with or
transmitted for filing to the Commission in accordance with Rule 424(b). The
Company will promptly advise you (i) of the filing of any amendment or
supplement to the Basic Prospectus, (ii) of the filing and effectiveness of any
amendment to the Registration Statement, (iii) of any request by the Commission
for any amendment of the Registration Statement or any amendment of or
supplement to the Basic Prospectus or for any additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Notes
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or notice of suspension of qualification and,
if issued, to obtain as soon as possible the withdrawal thereof. If the Basic
Prospectus is amended or supplemented as a result of the filing under the
Exchange Act of any document incorporated by reference in the Prospectus, you
shall not be obligated to solicit offers to purchase Notes so long as you are
not reasonably satisfied with such document.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, any event occurs or
condition exists as a result of which the Registration Statement or the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact, or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances when the Prospectus, as
then amended or supplemented, is delivered to a purchaser, not misleading, or
if, in the opinion of the Company, it is necessary at any time to amend or
supplement the Registration Statement or the Prospectus, as then amended or
supplemented, to comply with law, the Company will immediately notify you by
telephone (with confirmation in writing) to suspend solicitation of offers to
purchase Notes and, if so notified by the Company, you shall forthwith suspend
such solicitation and cease using the Prospectus as then amended or
supplemented. If in your opinion it is necessary at any time to amend or
supplement the Registration Statement or the Prospectus, as then amended or
supplemented, to comply with law, you shall so notify the Company by telephone
(with confirmation in writing) and may suspend solicitation of offers to
purchase Notes. If the Company shall decide to amend or supplement the
Registration Statement or Prospectus as then amended or supplemented, it shall
so advise you promptly by telephone (with confirmation in writing) and, at its
expense, shall prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or Prospectus as then
amended or supplemented that will correct such statement or omission or effect
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such compliance and will supply such amended or supplemented Prospectus to you
in such quantities as you may reasonably request. If such amendment or
supplement and any documents, certificates, opinions and letters furnished to
you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) in
connection with the preparation and filing of such amendment or supplement are
satisfactory in all respects to you, upon the filing of such amendment or
supplement with the Commission or effectiveness of an amendment to the
Registration Statement, you will resume the solicitation of offers to purchase
Notes hereunder. Notwithstanding any other provision of this Section 3(b),
until the distribution of any Notes you may have purchased as principal for
resale pursuant to Section 2(b) has been completed, if any event described
above in this paragraph (b) occurs, the Company will, at its own expense,
forthwith prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or Prospectus as then
amended or supplemented, satisfactory in all respects to you, and will supply
such amended or supplemented Prospectus to you in such quantities as you may
reasonably request. If such amendment or supplement and any documents,
certificates, opinions and letters furnished to you pursuant to paragraph (f)
below and Sections 5(a), 5(b) and 5(c) in connection with the preparation and
filing of such amendment or supplement are satisfactory in all respects to you,
upon the filing of such amendment or supplement with the Commission or
effectiveness of an amendment to the Registration Statement, you may resume
your resale of Notes as principal.
(c) The Company will make generally available to its
security holders and to you as soon as practicable earnings statements that
satisfy the provisions of Section 11(a) of the Securities Act covering twelve
month periods beginning, in each case, not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined in
Rule 158 under the Securities Act) of the Registration Statement with respect
to each sale of Notes. If such fiscal quarter is the last fiscal quarter of the
Company's fiscal year, such earning statements shall be made available not
later than 90 days after the close of the period covered thereby and in all
other cases shall be made available not later than 45 days after the close of
the period covered thereby.
(d) The Company will furnish to you without charge two
signed copies of the Registration Statement and all amendments thereto,
including exhibits and any documents incorporated by reference therein, and
during the period mentioned in Section 3(b) above, as many copies of the
Prospectus, any documents incorporated by reference therein and any supplements
and amendments thereto as you may reasonably request.
(e) The Company will qualify the Notes for offer and sale
under the securities or blue sky laws of such jurisdictions as you shall
reasonably request, will maintain such qualifications for as long as you shall
reasonably request and will pay all expenses
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(including fees and disbursements of counsel) in connection with such
qualification and in connection with the determination of the eligibility of
the Notes for investment under the laws of such jurisdictions as you may
designate.
(f) During the term of this Agreement, the Company shall
furnish to you such relevant documents and certificates of officers of the
Company relating to the business, operations and affairs of the Company, the
Registration Statement, the Basic Prospectus, any amendments or supplements
thereto, the Indentures, the Notes, this Agreement, the Procedures, any Terms
Agreement and the performance by the Company of its obligations hereunder or
thereunder as you may from time to time reasonably request and shall notify you
promptly in writing of any downgrading or of its receipt of any notice of (A)
any intended or potential downgrading or (B) any review or possible change that
does not indicate the direction of a possible change in the rating accorded any
of the Company's securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act.
(g) The Company will, whether or not any sale of Notes is
consummated, pay all reasonable expenses incident to the performance of its
obligations under this Agreement and any Terms Agreement, including: (i) the
preparation and filing of the Registration Statement and the Prospectus and all
amendments and supplements thereto, (ii) the preparation, issuance and delivery
of the Notes, (iii) the reasonable fees and disbursements of the Company's
counsel and accountants and of the Trustees and their counsel, (iv) the
qualification of the Notes under securities or blue sky laws in accordance with
the provisions of Section 3(e), including filing fees and the reasonable fees
and disbursements of your counsel in connection therewith and in connection
with the preparation of any Blue Sky Memoranda, (v) the printing and delivery
to you in quantities as hereinabove stated of copies of the Registration
Statement and all amendments thereto, and of the Basic Prospectus and any
amendments or supplements thereto, (vi) the printing and delivery to you of
copies of the Indentures and any Blue Sky Memoranda, (vii) any fees charged by
rating agencies for the rating of the Notes, (viii) the fees and expenses, if
any, incurred with respect to any filing with the National Association of
Securities Dealers, Inc., (ix) the reasonable fees and disbursements of your
counsel incurred in connection with the offering and sale of the Notes and (x)
any reasonable out-of-pocket expenses incurred by you, including any
advertising expenses incurred by you with the approval of the Company.
(h) Between the date of any agreement pursuant to Section
2(b) by you to purchase Notes as principal and the Settlement Date with respect
to such agreement, the Company will not, without your prior consent, offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company substantially similar to the Notes (other than (i) the Notes that are
to be sold pursuant to such
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agreement and (ii) commercial paper issued in the ordinary course of business),
except as may otherwise be provided in such agreement.
4. Conditions of the Obligations of the Agent. Your
obligations to solicit offers to purchase Notes as agent of the Company, your
obligations to purchase Notes pursuant to any Terms Agreement or otherwise and
the obligations of any other purchaser to purchase Notes will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of the Company's officers made in
each certificate furnished pursuant to the provisions hereof prior to or
concurrently with any such solicitation or purchase, to the performance and
observance by the Company of all covenants and agreements herein contained on
its part to be performed and observed, in each case, at the time of such
solicitation or purchase and to the following additional conditions precedent:
(a) (i) There shall not have occurred any material
adverse change, or any development which could reasonably be expected to result
in a prospective material adverse change, in the financial condition, or in the
earnings, business or operations, of the Company and its subsidiaries, taken as
a whole, from that set forth in the Registration Statement and the Prospectus.
(ii) Since the date of this Agreement, there shall not
have occurred any (A) suspension or material limitation of trading generally on
or by, as the case may be, the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade, (B) suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market, (C) declaration of a general
moratorium on commercial banking activities in New York by either Federal or
New York State authorities or (D) any outbreak or escalation of any hostilities
or any change in financial markets or any calamity or crisis that, in your
judgment, is material and adverse and, in the case of any of the events
described in clauses (ii) (A) through (D), such event, singly or together with
any other such event, makes it, in your judgment, impracticable to market the
Notes on the terms and in the manner contemplated by the Prospectus, as amended
or supplemented.
(iii) As of each Settlement Date, there shall not have been,
since the date of this Agreement, any downgrading, nor any notice given of (A)
any intended or potential downgrading or (B) any review or possible change that
does not indicate the direction of a possible change, in the rating accorded
any of the Company's securities by any "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act, except as disclosed to you in writing by the Company
prior to the date the Company accepted the offer to purchase the Notes to be
issued on such Settlement Date.
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(b) On the Commencement Date and, if called for by any
agreement by you to purchase Notes as principal, on the corresponding
Settlement Date, you shall have received:
(i) The opinion, dated as of such date, of William G.
von Glahn, Esq., General Counsel of the Company, to the effect that:
(A) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(B) each of Williams Communications Group, Inc. and
Williams Energy Group (the "Material Subsidiaries") has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(C) each of the Company and the Material Subsidiaries has
all consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities, and all
courts and other tribunals, necessary to conduct its business in the
manner described in the Prospectus, except to the extent that the lack
of such consents, authorizations, approvals, orders, certificates or
permits would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(D) each Indenture pursuant to which the Notes will be
issued (i) has been duly authorized, executed and delivered by the
Company, (ii) assuming due authorization, execution and authentication
by the Trustee, is a valid and binding agreement of the Company,
enforceable in accordance with its terms and (iii) has been duly
qualified under the Trust Indenture Act of 1939, as amended;
(E) the forms of Notes have been duly authorized and,
when executed and authenticated in accordance with the provisions of
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the relevant Indenture and delivered to and paid for by the purchasers
thereof, will be valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, and will be
entitled to the benefits of such Indenture;
(F) each of this Agreement and any applicable Terms
Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder or thereunder may be limited
under applicable law;
(G) the execution, delivery and performance of this
Agreement, the Indentures, the Notes and any applicable Terms
Agreement will not contravene any provision of applicable law or the
Certificate of Incorporation or By-laws of the Company or any material
agreement or other material instrument binding upon the Company, and
no consent, approval or authorization of any governmental body or
agency other than pursuant to any state securities or Blue Sky law is
required for the performance of this Agreement and the issuance and
sale of the Notes pursuant to this Agreement;
(H) the statements (l) in the Prospectus under the
captions "Description of Notes" (in the Prospectus Supplement),
"Description of Debt Securities" (in the Basic Prospectus) and "Plan
of Distribution" (in the Prospectus Supplement and in the Basic
Prospectus), (2) in the Registration Statement under Item 15 and (3)
in the Company's [Form 10] [most recent Annual Report on Form 10-K]
under "Business" and "Legal Proceedings" [and in "Note 8 - Contingent
Liabilities in the Company's most recent quarterly report on Form 10-
Q, in each case] insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the matters
referred to therein;
(I) after due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject which
is required to be described in the Registration Statement or the
Prospectus and is not so described or of any contract or other
document which is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required;
and
(J) such counsel (l) is of the opinion that each
document, if any, filed pursuant to the Securities Exchange Act of
1934,
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as amended (the "Exchange Act") (except as to financial statements
included therein, as to which such counsel need not express any
opinion), and incorporated by reference in the Registration Statement
and the Prospectus, as amended or supplemented, complied when so filed
as to form in all material respects with the Exchange Act and the
rules and regulations of the Commission thereunder, (2) believes that
(except as to financial statements and except for that part of the
Registration Statement that constitutes the Statements of Eligibility
and Qualification ("Form T-1") under the Trust Indenture Act of 1939,
as amended, as to all of which such counsel need not express any
belief) each part of the Registration Statement, as amended, if
applicable, when such part became effective or was incorporated by
reference into the Registration Statement did not, and as of the date
such opinion is delivered, does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary-to make the statements therein, in light of the
circumstances under which they were made, not misleading, (3) is of
the opinion that the Registration Statement and Prospectus, as amended
or supplemented, if applicable (except as to financial statements
included therein and except for that part of the Registration
Statement that constitutes the Form T- 1, as to all of which such
counsel need not express any opinion), comply as to form in all
material respects with the Securities Act and the applicable rules and
regulations thereunder and (4) believes that (except as to financial
statements, and except for that part of the Registration Statement
that constitutes the Form T-1 heretofore referred to as to all of
which such counsel need not express any belief) the Registration
Statement and the Prospectus, as amended or supplemented, if
applicable, as of the Commencement Date or the date of your agreement
to purchase Notes as principal pursuant to Section 2(b), as the case
may be, did not, and as of the date such opinion is delivered, do not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
In rendering such opinions, such counsel may qualify any
opinions as to enforceability by stating that such enforceability may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting the rights and remedies of creditors and is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Such counsel
may rely, as to all matters governed by the laws of jurisdictions other than
the State of Oklahoma, the Delaware General Corporation Law, and the federal
law of the United States, upon the opinions of your and other counsel (copies
of which shall be delivered to you), who shall be counsel satisfactory to your
counsel, in which case the opinion shall state
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that such counsel believes he and you are entitled so to rely. Such counsel
may also state that, insofar as such opinion involves factual matters, he has
relied, to the extent he deems proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(ii) The opinion, dated as of such date, of Davis Polk &
Wardwell, counsel to you, in substantially the form as set forth as Exhibit C
hereto.
[(iii) The opinion, dated as of such date, of
_____________________, special tax counsel to the Company, confirming the
accuracy of the opinion of such counsel set forth under the caption "United
States Federal Taxation" in the Prospectus Supplement.]
(c) On the Commencement Date and, if called for by any
agreement by you to purchase Notes as principal pursuant to Section 2(b), on
the corresponding Settlement Date, you shall have received a certificate, dated
such Commencement Date or Settlement Date, as the case may be, signed by an
officer of the Company to the effect that the representations and warranties of
the Company contained herein are true and correct as of such date and the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before such date.
The officer signing and delivering such certificate may rely
upon the best knowledge of the Company as to proceedings threatened.
(d) On the Commencement Date and, if called for by any
agreement by you to purchase Notes as principal pursuant to Section 2(b), on
the corresponding Settlement Date, the Company's independent public accountants
shall have furnished to you a letter or letters, dated as of the Commencement
Date or such Settlement Date, as the case may be, in form and substance
satisfactory to you containing statements and information of the type
ordinarily included in accountant's "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Registration Statement and the
Prospectus, as amended or supplemented.
(e) On the Commencement Date and on each Settlement Date
of a purchase pursuant to Section 2(b), the Company shall have furnished to you
such appropriate further information, certificates and documents as you may
reasonably request.
5. Additional Agreements of the Company. (a) Each time
the Registration Statement or Prospectus is amended or supplemented (other than
by an amendment or supplement providing solely for a change in the interest
rates, redemption provisions, amortization schedules or maturities offered on
the Notes or for a change deemed immaterial in your reasonable opinion), the
Company will deliver or
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cause to be delivered forthwith to you a certificate signed by an officer of
the Company, dated the date of such amendment or supplement, as the case may
be, in form reasonably satisfactory to you, of the same tenor as the
certificate referred to in Section 4(c) relating to the Registration Statement
or the Prospectus as amended and supplemented to the time of delivery of such
certificate.
(b) Each time the Company furnishes a certificate
pursuant to Section 5(a), the Company shall furnish or cause to be furnished
forthwith to you a written opinion of counsel for the Company. Any such
opinion shall be dated the date of such amendment or supplement, as the case
may be, shall be in a form satisfactory to you and shall be of the same tenor
as the opinion referred to in Section 4(b)(i), but modified to relate to the
Registration Statement or the Prospectus as amended and supplemented to the
time of delivery of such opinion. In lieu of such opinion, counsel last
furnishing such an opinion to you may furnish to you a letter to the effect
that you may rely on such last opinion to the same extent as though it were
dated the date of such letter (except that statements in such last opinion will
be deemed to relate to the Registration Statement or the Prospectus as amended
and supplemented to the time of delivery of such letter.)
(c) Each time the Registration Statement or the
Prospectus is amended or supplemented to set forth amended or supplemental
financial information or such amended or supplemental information is
incorporated by reference in the Registration Statement or the Prospectus, the
Company shall cause its independent public accountants forthwith to furnish you
with a letter, dated the date of such amendment or supplement, as the case may
be, in form satisfactory to you, of the same tenor as the letter referred to in
Section 4(d), with regard to the amended or supplemental financial information
included or incorporated by reference in the Registration Statement or the
Prospectus as amended or supplemented to the date of such letter.
6. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless you and each person, if any, who controls
you within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act from and against any and all losses, claims, damages or
liabilities caused by any untrue statement or allegedly untrue statement of a
material fact contained in the Registration Statement or in any amendment
thereof or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or allegedly untrue statement or omission based upon
information relating to you furnished to the Company in writing by you
expressly for use therein.
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(b) You agree to indemnify and hold harmless the Company,
its directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to you, but only with reference to
information relating to you furnished to the Company in writing by you
expressly for use in the Registration Statement or the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by you in the case of parties indemnified pursuant to the second
preceding paragraph and by the Company in the case of parties indemnified
pursuant to the first preceding paragraph. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the third
sentence of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the
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indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in paragraph (a) or
(b) of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein in
connection with any offering of Notes, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and you
from the offering of such Notes or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and you in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and you in connection with the offering of such Notes shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of such Notes before deducting expenses received by the Company and
the total discounts and commissions received by you in respect thereof, in each
case as set forth in the Prospectus Supplement relating to such Notes, bear to
the aggregate public offering price of such Notes. The relative fault of the
Company and of you shall be determined by reference to, among other things,
whether the untrue or allegedly untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by you and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Company and you agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, you shall not be required to contribute any
amount in excess of the amount by which the total price at which the Notes
referred to in paragraph (d) above that were offered and sold to the public
through you exceeds the amount of any damages that you have otherwise been
required to pay by reason of such
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untrue or allegedly untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 6 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
7. Position of the Agent. In soliciting offers to
purchase the Notes, you are acting solely as agent for the Company, and not as
principal, and do not assume any obligation towards or relationship of agency
or trust with any purchaser of Notes. You shall make reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes has been solicited by you and accepted by the Company, but you
shall not have any liability to the Company in the event any such purchase is
not consummated for any reason. If the Company shall default in its
obligations to deliver Notes to a purchaser whose offer it has accepted, the
Company shall hold you harmless against any loss, claim, damage or liability
arising from or as a result of such default and shall, in particular, pay to
you the commission you would have received had such sale been consummated.
8. Termination. This Agreement may be terminated at any
time either by the Company or by you upon the giving of written notice of such
termination to the other party hereto. Any Terms Agreement shall be subject to
termination on the terms set forth therein. The termination of this Agreement
shall not require termination of any agreement by you to purchase Notes as
principal, and the termination of any such agreement shall not require
termination of this Agreement. If this Agreement is terminated, the provisions
of the third paragraph of Section 2(a), the last two sentences of Section 3(b)
and Sections 3(c), 3(g), 6, 7 and 9 shall survive; provided that if at the time
of termination an offer to purchase Notes has been accepted by the Company but
the time of delivery to the purchaser or its agent of such Notes has not
occurred, the provisions of Sections 2(c), 3(a) and 3(f) shall also survive.
If any Terms Agreement is terminated, the provisions of Sections 3(c), 3(g), 6
and 9 and the last two sentences of Section 3(b) (which shall have been
incorporated by reference in such Terms Agreement) shall survive.
9. Representations and Indemnities to Survive. The
respective indemnity and contribution agreements, representations, warranties
and other statements of the Company, its officers and you set forth in or made
pursuant to this Agreement or any agreement by you to purchase Notes as
principal will remain in full force and effect, regardless of any termination
of this Agreement, any investigation made by or on behalf of you or the Company
or any of the officers, directors or controlling persons referred to in Section
6 and delivery of and payment for the Notes.
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10. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to you, will be mailed,
delivered or telegraphed and confirmed to you at _____________________, with a
copy to Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017,
Attention: Keith L. Kearney or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at One Williams Center, Tulsa,
Oklahoma 74172 Attention: Chief Financial Officer, with a copy to its General
Counsel at the same address.
11. Successors. This Agreement and any Terms Agreement
will inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers, directors and controlling persons
referred to in Section 6 and the purchasers of Notes (to the extent expressly
provided in Section 4), and no other person will have any right or obligation
hereunder.
12. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement will be governed by
and construed in accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and you.
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Very truly yours,
WILLIAMS HOLDINGS OF DELAWARE, INC.
By________________________________
Title:
The foregoing Agreement
is hereby confirmed
and accepted as of the
date first above written.
[UNDERWRITER]
By_________________________
Title:
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Exhibit A
WILLIAMS HOLDINGS OF DELAWARE, INC.
MEDIUM-TERM NOTES
TERMS AGREEMENT
___________________, 19___
Williams Holdings of Delaware, Inc.
One Williams Center
Tulsa, OK 74172
Attention:
Re: Distribution Agreement dated ________, 199__
(the Distribution Agreement")
The undersigned agrees to purchase the following principal
amount of your Medium-Term Notes: $
Floating
Fixed Rate Rate
All Notes: Notes: Notes:
- ---------- ------ --------
Purchase Interest Base rate:
price: Rate:
Settlement Applicability Applicability
date and time: of modified of modified
payment upon following
Place of acceleration banking
delivery: day convention:
Amortization
Specified schedule: Index
currency: maturity:
Maturity Spread:
date:
Spread
Interest multiplier:
payment dates:
Alternate rate
Original issue event spread:
discount
provisions: Initial interest
rates:
Redemption
provisions: Initial interest
reset date:
22
Ranking:
Interest reset
Other terms: dates:
Maximum rate:
Minimum rate:
Interest reset
period:
Calculation agent:
The provisions of Sections l, 2(b), 2(c), 2(d), 3, 4, 5, 6 and
8 through 14 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same force and
effect as if set forth in full herein.
The following information, opinions, certificates, letters and
documents referred to in Section 4 of the Distribution Agreement will be
required: _______________
[UNDERWRITER]
By _____________________________
Title:
Accepted:
WILLIAMS HOLDINGS OF DELAWARE, INC.
By ______________________
Title:
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EXHIBIT B
WILLIAMS HOLDINGS OF DELAWARE, INC.
MEDIUM-TERM NOTES, ADMINISTRATIVE PROCEDURES
Explained below are the administrative procedures and specific
terms of the offering of Medium-Term Notes (the "Notes") on a continuous basis
by Williams Holdings of Delaware, Inc. (the "Company") pursuant to the
Distribution Agreement, dated as of _____________, 199__ (the "Distribution
Agreement") between the Company and __________________ (the "Agent"). The
Notes may be issued as senior indebtedness (the "Senior Notes") or subordinated
indebtedness (the "Subordinated Notes") of the Company, and as used herein the
term "Notes" includes the Senior Notes and the Subordinated Notes. Subordinated
Notes will be subordinate to all Senior Notes. In the Distribution Agreement,
the Agent has agreed to use its best efforts to solicit purchases of the Notes.
[The Agent, as principal, may purchase Notes for its own account and if
requested by the Agent, the Company and the Agent will enter into a terms
agreement, as contemplated by the Distribution Agreement.]
The Senior Notes will be issued pursuant to the provisions of
a senior debt indenture dated as of ___________ 1990 (as it may be supplemented
or amended from time to time, the "Senior Debt Indenture"), between the Company
and Citibank, N.A. ("Citibank"), as trustee. The Subordinated Notes will be
issued pursuant to the provisions of a subordinated debt indenture dated as of
________________ 1995 (as it may be supplemented or amended from time to time,
the "Subordinated Debt Indenture"), between the Company and Citibank, as
trustee. The Senior Debt Indenture and the Subordinated Debt Indenture are
sometimes hereinafter referred to individually as an "Indenture" and
collectively as the "Indentures." Citibank, will be the Registrar, the
Calculation Agent, Authenticating Agent, and Paying Agent for both the Senior
Notes and the Subordinated Notes and will perform the duties specified herein.
Notes will bear interest at a fixed rate (the "Fixed Rate Notes"), which may be
zero in the case of certain original issue discount notes (the "OID Notes"), or
at floating rates (the "Floating Rate Notes"). Fixed Rate Notes may pay a
level amount in respect of both interest and principal amortized over the life
of the Notes (the "Amortizing Notes"). The Notes will be issued in U.S.
dollars or other currencies, including composite currencies such as the
European Currency Unit (the "Specified Currency"). Each Note will be
represented by either a Global Security (as defined below) delivered to
Citibank, as agent for the Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC (a "Book-Entry Note") or a certificate
delivered to the holder thereof or a person designated
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by such holder (a "Certificated Note"). Except in limited circumstances, an
owner of a Book-Entry Note will not be entitled to receive a Certificated Note.
Book-Entry Notes, which may only be denominated and payable in
U.S. dollars, will be issued in accordance with the administrative procedures
set forth in Part I hereof as they may subsequently be amended as the result of
changes in DTC'S operating procedures, and Certificated Notes will be issued in
accordance with the administrative procedures set forth in Part II hereof.
Unless otherwise defined herein, terms defined in the Indentures or the Notes
shall be used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, Citibank 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 Citibank to DTC, dated as of the date
hereof (the "Letter of Representation"), and a Medium Term Note Certificate
Agreement between Citibank and DTC, dated as of _______________, and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry Notes,
the Company will issue a single global security in
fully registered form without coupons (a "Global
Security") representing up to $100,000,000 principal
amount of all such Notes that have the same Maturity
Date, redemption provisions, ranking, Interest
Payment Dates, Original Issue Date, original issue
discount provisions (if any) and, in the case of
Fixed Rate Notes, Interest Rate and amortization
schedule (if any) or, in the case of Floating Rate
Notes, Initial Interest Rate, Base Rate, Index
Maturity, Interest Reset Period, Interest Reset
Dates, Spread or Spread Multiplier (if any), Minimum
Interest Rate (if any) and Maximum Interest Rate (if
any) and, in each case, any other relevant terms
(collectively "Terms"). Each Global Security will be
dated and issued as of the date of its authentication
by Citibank. Each Global Security will bear an
"Interest Accrual Date," which will be
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(i) with respect to an original Global Security (or
any portion thereof), its original issuance date and
(ii) with respect to any Global Security (or any
portion thereof) issued subsequently upon exchange of
a Global Security, or in lieu of a destroyed, lost or
stolen Global Security, the most recent Interest
Payment Date to which interest has been paid or duly
provided for on the predecessor Global Security or
Securities (or if no such payment or provision has
been made, the original issuance date of the
predecessor Global Security), regardless of the date
of authentication of such subsequently issued Global
Security. Book-Entry Notes may only be denominated
and payable in U.S. dollars. No Global Security will
represent any Certificated Note.
Identification The Company has arranged with the CUSIP
Numbers: Service Bureau of Standard & Poor's Corporation (the
"CUSIP Service Bureau") for the reservation of a
series of CUSIP numbers (including tranche numbers)
for each of the Senior Notes and the Subordinated
Notes, each of which series consists of approximately
900 CUSIP numbers and relates to Global Securities
representing the Book-Entry Notes. The Company has
obtained from the CUSIP Service Bureau a written list
of each series of reserved CUSIP numbers and has
delivered to Citibank and DTC the written list of 900
CUSIP numbers of each such series. Citibank will
assign CUSIP numbers to Global Securities as
described below under Settlement Procedure "B". DTC
will notify the CUSIP Service Bureau periodically of
the CUSIP numbers that Citibank has assigned to
Global Securities. At any time when fewer than 100
of the reserved CUSIP numbers of either series remain
unassigned to Global Securities, Citibank shall so
advise the Company and, if it deems necessary, the
Company will reserve additional CUSIP numbers for
assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional
CUSIP numbers, the Company shall deliver a list
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of such additional CUSIP numbers to Citibank and DTC.
Registration: Each Global Security will be registered in the name
of Cede & Co., as nominee for DTC, on the Security
register maintained under the relevant Indenture.
The beneficial owner of a Book- Entry Note (or one or
more indirect participants in DTC designated by such
owner) will designate one or more participants in DTC
(with respect to such Note, the "Participants") to
act as agent or agents for such owner in connection
with the book-entry system maintained by DTC, and DTC
will record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such beneficial owner in such
Note in the account of such Participants. The
ownership interest of such beneficial owner in such
Note will be recorded through the records of such
Participants or through the separate records of such
Participants and one or more indirect participants in
DTC.
Transfers: Transfers of a Book-Entry Note will be accompanied by
book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
Exchanges: Citibank may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of consolidation
specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent
Book-Entry Notes having the same Terms and for which
interest has been paid to the same date, (ii) a date,
occurring at least thirty days after such written
notice is delivered and at least thirty days before
the next Interest Payment Date for such Book-Entry
Notes, on which such Global Securities shall be
exchanged for a single replacement Global Security
and (iii) a new CUSIP number to be assigned to such
replacement Global Security. Upon receipt of such a
notice,
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DTC will send to its Participants (including
Citibank) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, Citibank will
deliver to the CUSIP Service Bureau a written notice
setting forth such exchange date and the new CUSIP
number and stating that, as of such exchange date,
the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified
exchange date, Citibank will exchange such Global
Securities for a single Global Security bearing the
new CUSIP number and a new Interest Accrual -Date,
and the CUSIP numbers of the exchanged Global
Securities will, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately
reassigned. Not withstanding the foregoing, if the
Global Securities to be exchanged exceed $100,000,000
in aggregate principal amount, one Global Security
will be authenticated and issued to represent each
$100,000,000 principal amount of the exchanged Global
Security and an additional Global Security will be
authenticated and issued to represent any remaining
principal amount of such Global Securities (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a date more than
nine months after the settlement date for such Note.
Notice of Citibank will give notice to DTC
Redemption Dates: prior to each Redemption Date (as specified in the
Note), if any, at the time and in the manner set
forth in the Letter of Representation.
Denominations: Book-Entry Notes will be issued in principal amounts
of $100,000 or any amount in excess thereof that is
an integral multiple of $1,000. Global Securities
will be denominated in principal amounts not in
excess of $100,000,000. If one or more Book-Entry
Notes having an aggregate principal amount in excess
of $100,000,000 would, but for the preceding
sentence, be
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represented by a single Global Security, then one
Global Security will be issued to represent each
$100,000,000 principal amount of such Book-Entry Note
or Notes and an additional Global Security will be
issued to represent any remaining principal amount of
such Book-Entry Note or Notes. In such a case, each
of the Global Securities representing such Book-Entry
Note or Notes shall be assigned the same CUSIP
number.
Interest: General. Interest on each Book-Entry Note will
accrue from the Interest Accrual Date of the Global
Security representing such Note. Each payment of
interest on a Book-Entry Note will include interest
accrued to but excluding the Interest Payment Date;
provided that in the case of Floating Rate Notes that
reset daily or weekly, interest payments will include
interest accrued to and including the Record Date
immediately preceding the Interest Payment Date,
except that at maturity or earlier redemption, the
interest payable will include interest accrued to,
but excluding, the maturity date or the date of
redemption, as the case may be. Interest payable at
the maturity or upon redemption of a Book-Entry Note
will be payable to the person to whom the principal
of such Note is payable. Standard & Poor's
Corporation will use the information received in the
pending deposit message described under Settlement
Procedure "C" below in order to include the amount of
any interest payable and certain other.information
regarding the related Global Security in the
appropriate weekly bond report published by Standard
& Poor's Corporation.
Record Date. The Record Date with respect to any
Interest Payment Date shall be the date fifteen
calendar days immediately preceding such Interest
Payment Date.
Fixed Rate Book-Entry Notes. Interest payments on
Fixed Rate Book-Entry Notes
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29
other than Amortizing Notes will be made semiannually
on March l and September 1 of each year and at
maturity and Book-Entry Amortizing Notes will pay
principal and interest semiannually each March 1 and
September l, or quarterly each March l, June 1,
September 1, and December l, and at maturity;
provided, however, that in the case of a Fixed Rate
Book-Entry Note issued between a Record Date and an
Interest Payment Date, the first interest payment
will be made on the Interest Payment Date following
the next succeeding Record Date.
Floating Rate Book-Entry Notes. Interest payments
will be made on Floating Rate Book-Entry Notes
monthly, quarterly, annually or annually. Unless
otherwise agreed upon, interest will be payable, in
the case of Floating Rate Book-Entry Notes with a
daily, weekly or monthly Interest Reset Date, on the
third Wednesday of each month or on the third
Wednesday of March, June, September and December, as
specified pursuant to Settlement Procedure "A" below;
in the case of Notes with a quarterly Interest Reset
Date, on the third Wednesday of March, June,
September and December of each year; in the case of
Notes with a semi annual Interest Reset Date, on the
third Wednesday of the two months specified pursuant
to Settlement Procedure "A" below; and in the case of
Notes with an annual Interest Reset Date, on the
third Wednesday of the month specified pursuant to
Settlement Procedure "A" below; provided however,
that if an Interest Payment Date for Floating Rate
Book-Entry Notes would otherwise be a day that is not
a Business Day with respect to such Floating Rate
Book-Entry Notes, such Interest Payment Date will be
the next succeeding Business Day with respect to such
Floating Rate Book-Entry Notes, except in the case of
a LIBOR Note if such Business Day is in the next
succeeding calendar month, such Interest Payment Date
will be the immediately preceding Business Day;
and provided, further, that in the case of a
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30
Floating Rate Book-Entry Note issued between a Record
Date and an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date
following the next succeeding Record Date.
Notice of Interest Payment and Record Dates. On the
first Business Day of January, April, July and
October of each year, Citibank will deliver to the
Company and DTC a written list of Record Dates and
Interest Payment Dates that will occur with respect
to Book-Entry Notes during the six-month period
beginning on such first Business Day.
Calculation of Fixed Rate Book-Entry Notes.
Interest: Interest on Fixed Rate Book-Entry Notes (including
interest for partial periods) will be calculated on
the basis of a year of twelve thirty-day months.
Floating Rate Book-Entry Notes. Interest rates on
Floating Rate Book-Entry Notes will be determined as
set forth in the form of Notes. Interest on Floating
Rate Book-Entry Notes will be calculated on the basis
of actual days elapsed and a year of 360 days except
that in the case of Treasury Rate Notes, interest
will be calculated on the basis of the actual number
of days in the year.
Payments of Payments of Interest. Promptly after each
Principal and after each Record Date, Citibank
Interest: will deliver to the Company and DTC a written notice
specifying by CUSIP number the amount of interest to
be paid on each Global Security (other than an
Amortizing Note) on the following Interest Payment
Date (other than an Interest Payment Date coinciding
with maturity) and the total of such amounts. DTC
will confirm the amount payable on each such Global
Security on such Interest Payment Date by reference
to the daily bond reports published by Standard &
Poor's Corporation. In the case of Amortizing Notes,
Citibank will provide separate written notice to DTC
prior to each
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31
Interest Payment Date at the times and in the manner
set forth in the Letter of Representation. The
Company will pay to Citibank, as paying agent, the
total amount of interest due on such Interest Payment
Date (and, in the case of an Amortizing Note,
principal and interest) (other than at maturity), and
Citibank will pay such amount to DTC at the times and
in the manner set forth below under "Manner of
Payment." If any Interest Payment Date for a Fixed
Rate Book- Entry Note is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue
on such payment for the period from and after such
Interest Payment Date.
Payments at Maturity or Upon Redemption. On or about
the first Business Day of each month, Citibank will
deliver to the Company and DTC a written list of
principal and interest to be paid on each Global
Security (other than an Amortizing Note) maturing
either at maturity or on a redemption date in the
following month. The Company and DTC will confirm
the amounts of such principal and interest payments
with respect to each such Global Security on or about
the fifth Business Day preceding the Maturity Date or
redemption date of such Global Security. In the case
of Amortizing Notes, Citibank will provide separate
written notice to DTC prior to each Interest Payment
Date at the times and in the manner set forth in the
Letter of Representation. The Company will pay to
Citibank, as the paying agent, the principal amount
of such Global Security, together with interest due
at such Maturity Date or redemption date. Citibank
will pay such amounts to DTC at the times and in the
manner set forth below under "Manner of Payment." If
any Maturity Date or redemption date of a Global
Security representing Book-Entry Notes is not a
Business Day, the payment due on such day shall be
made on the next succeeding Business Day and, in the
case of Fixed Rate Notes, no interest shall accrue on
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32
such payment for the period from and after such
Maturity Date or redemption date. Promptly after
payment to DTC of the principal and interest due on
the Maturity Date or redemption date of such Global
Security, Citibank will cancel such Global Security
in accordance with the terms of the relevant
Indenture and deliver it to the Company with a
certificate of cancellation.
Manner of Payment. The total amount of any principal
and interest due on Global Securities on any Interest
Payment Date or at maturity or upon redemption shall
be paid by the Company to Citibank in funds available
for immediate use by Citibank as of 9:30 A.M. (New
York City time) on such date. The Company will make
such payment on such Global Securities by instructing
Citibank to withdraw funds from an account maintained
by the Company at Citibank. The Company will confirm
such instructions in writing to Citibank. Prior to 10
A.M. (New York City time) on each Maturity Date or
redemption date or as soon as possible thereafter,
Citibank will pay by separate wire transfer (using
Fedwire message entry instructions in a form
previously specified by DTC) to an account at the
Federal Reserve Bank of New York previously specified
by DTC, in funds available for immediate use by DTC,
each payment of interest or principal (together with
interest thereon) due on Global Securities on any
Maturity Date or redemption date. On each Interest
Payment Date, interest payments (and, in the case of
Amortizing Notes, interest and principal payments)
shall be made to DTC in same day funds in accordance
with existing arrangements between Chemical and DTC.
Thereafter on each such date, DTC will pay, in
accordance with its SDFS operating procedures then in
effect, such amounts in funds available for immediate
use to the respective Participants in whose names the
Book-Entry Notes represented by such Global
Securities are recorded in the book-entry system
maintained by DTC. Neither the Company
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33
nor Citibank shall have any responsibility or
liability for the payment by DTC to such Participants
of the principal of and interest on the Book-Entry
Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in
DTC or other person responsible for forwarding
payments directly to the beneficial owner of such
Note.
Preparation of If any order to purchase a Book-Entry
Pricing Note is accepted by or on behalf of the
Supplement: Company, the Company will prepare a pricing
supplement (a "Pricing Supplement") reflecting the
terms of such Note and will arrange to file 10 copies
of such Pricing Supplement with the Commission in
accordance with the applicable paragraph of Rule
424(b) under the Act, will deliver the number of
copies of such Pricing Supplement to the Agent as the
Agent shall request by the close of business on the
following Business Day and will, on the Agent's
behalf, file five copies of such Pricing Supplement
with the National Association of Securities Dealers,
Inc. (the "NASD"). The Agent will cause such Pricing
Supplement to be delivered to the purchaser of the
Note.
In each instance that a Pricing Supplement is
prepared, the Agent will affix the Pricing Supplement
to Prospectuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which they are
attached (other than those retained for files), will
be destroyed.
Settlement: The receipt by the Company of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Note shall constitute "settlement"
with respect to such Note.
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34
All orders accepted by the Company will be settled on
the fifth Business Day pursuant to the timetable for
settlement set forth below unless the Company and the
purchaser agree to settlement on another day which
shall be no earlier than the next Business Day.
Settlement Settlement Procedures with regard to
Procedures: each Book-Entry Note sold by the Company to or
through the Agent, (except pursuant to a Terms
Agreement, as defined in the Distribution Agreement),
shall be as follows:
A. The Agent will advise the Company by
telephone that such Note is a Book-Entry Note
and of the following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate
Book-Entry Note, the interest rate
and whether such Note is an
Amortizing Note, or in the case of a
Floating Rate Book-Entry Note, the
Initial Interest Rate (if known at
such time), Base Rate, Index
Maturity, Interest Reset Period,
Initial Interest Reset Date,
Interest Reset Dates, Spread or
Spread Multiplier (if any), Minimum
Interest Rate (if any), Maximum
Interest Rate (if any), the
Alternate Rate Event Spread (if any)
and the applicability of the
Modified Following Banking Day
Convention.
4. Interest Payment Dates.
5. Redemption provisions, if any.
6. Ranking.
7. Settlement date.
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35
8. Price.
9. Agent's commission, if any,
determined as provided in the
Distribution Agreement.
10. Whether the Note is an OID Note, and
if it is an OID Note, the total
amount of OID, the yield to
maturity, the initial accrual period
OID and the applicability of
Modified Payment upon Acceleration.
11. Any other applicable Terms.
B. The Company will advise Citibank by telephone
or electronic transmission (confirmed in
writing at any time on the same date) of the
information set forth in Settlement Procedure
"A" above. Citibank will then assign a CUSIP
number to the Global Security representing
such Note and will notify the Company and the
Agent of such CUSIP number by telephone as
soon as practicable.
C. Citibank will enter a pending deposit message
through DTC's Participant Terminal System,
providing the following settlement
information to DTC, the Agent and Standard &
Poor's Corporation:
1. The information set forth in
Settlement Procedure "A".
2. The Initial Interest Payment Date
for such Note, the number of days by
which such date succeeds the related
DTC Record Date (which in the case
of Floating Rate Notes which reset
daily or weekly, shall be the date
five calendar days immediately
preceding the applicable Interest
Payment Date and, in the case of all
other Notes, shall be the Record
Date as defined in the Note) and
amount of interest
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payable on such Initial Interest
Payment Date.
3. The CUSIP number of the Global
Security representing such Note.
4. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
5. Whether such Note is an Amortizing
Note (by appropriate notation in the
comments field of DTC's Participant
Terminal System).
D. Citibank will complete and authenticate the
Global Security representing such Note.
E. DTC will credit such Note to Citibank's
participant account at DTC.
F. Citibank will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to
Citibank's participant account and credit
such Note to the Agent's participant account
and (ii) debit the Agent's settlement account
and credit Chemical's settlement account for
an amount equal to the price of such Note
less the Agent's commission, if any. The
entry of such a deliver order shall
constitute a representation and warranty by
Chemical to DTC that (a) the Global Security
representing such Book-Entry Note has been
issued and authenticated and (b) Citibank is
holding such Global Security pursuant to the
Medium Term Note Certificate Agreement
between Citibank and DTC.
G. Unless the Agent purchased such Note as
principal, the Agent will enter an SDFS
deliver order through DTC's
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37
Participant Terminal System instructing DTC
(i) to debit such Note to the Agent's
participant account and credit such Note to
the participant accounts of the Participants
with respect to such Note and (ii) to debit
the settlement accounts of such Participants
and credit the settlement account of the
Agent for an amount equal to the price of
such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. Citibank will credit to the account of the
Company maintained at Citibank Bank, New
York, New York, in funds available for
immediate use in the amount transferred to
Citibank in accordance with Settlement
Procedure "F".
J. Unless the Agent purchased such Note as
principal, the Agent will confirm the
purchase of such Note to the purchaser either
by transmitting to the Participants with
respect to such Note a confirmation order or
orders through DTC's institutional delivery
system or by mailing a written confirmation
to such purchaser.
K. Monthly, Citibank will send to the Company a
statement setting forth the principal amount
of Notes Outstanding as of that date under
the Indentures and setting forth a brief
description of any sales of which the Company
has advised Citibank but which have not yet
been settled.
Settlement For sales by the Company of Book-
Procedures Entry Notes to or through the Agent
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38
Timetable: (except pursuant to a Terms Agreement) for settlement
on the first Business Day after the sale date,
Settlement Procedures 'A" through "J" set forth above
shall be completed as soon as possible but not later
than the respective times (New York City time) set
forth below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on settlement date
E 10:00 A.M. on settlement date
F-G 2:00 P.M. on settlement date
H 4:45 P.M. on settlement date
I-J 5:00 P.M. on settlement date
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures "A", "B"
and "C" shall be completed as soon as practicable but
no later than 11:00 A.M., 12 Noon and 2:00 P.M.,
respectively, on the first Business Day after the
sale date. If the Initial Interest Rate for a
Floating Rate Book-Entry Note has not been determined
at the time that Settlement Procedure "A" is
completed, Settlement Procedure "B" and "C" shall be
completed as soon as such rate has been determined
but no later than 12 Noon and 2:00 P.M.,
respectively, on the second Business Day before the
settlement date. Settlement Procedure "H" is subject
to extension in accordance with any extension of
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect
on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
cancelled, Citibank, after receiving notice from the
Company or the Agent, will deliver to DTC, through
DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 P.M. on
the
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39
Business Day immediately preceding the scheduled
settlement date.
Failure to If Citibank fails to enter an SDFS
Settle: deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "F", Citibank may
deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable withdrawal message
instructing DTC to debit such Note to Citibank's
participant account, provided that Citibank's
participant account contains a principal amount of
the Global Security representing such Note that is at
least equal to the principal amount to be debited. If
a withdrawal message is processed with respect to all
the Book-Entry Notes represented by a Global
Security, Citibank will mark such Global Security
"cancelled," make appropriate entries in Citibank's
records and send such cancelled Global Security to
the Company. The CUSIP number assigned to such
Global Security shall, in accordance with CUSIP
Service Bureau procedures, be cancelled and not
immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all,
of the Book-Entry Notes represented by a Global
Security, Citibank will exchange such Global Security
for two Global Securities, one of which shall
represent such Book-Entry Note or Notes and shall be
cancelled immediately after issuance and the other
of which shall represent the remaining Book-Entry
Notes previously represented by the surrendered
Global Security and shall bear the CUSIP number of
the surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Agent may enter SDFS
deliver orders through DTC's Participant Terminal
System reversing the orders entered pursuant to
Settlement Procedures "F" and
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40
"G", respectively. Thereafter, Citibank will deliver
the withdrawal message and take the related actions
described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect.
In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes to
have been represented by a Global Security, Citibank
will provide, in accordance with Settlement
Procedures "D" and "F", for the authentication and
issuance of a Global Security representing the
Book-Entry Notes to be represented by such Global
Security and will make appropriate entries in its
records.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Citibank will serve as registrar in connection with the
Certificated Notes.
Issuance: Each Certificated Note will be dated and issued as of
the date of its authentication by Citibank. Each
Certificated Note will bear an Original Issue Date,
which will be (i)with respect to an original
Certificated Note (or any portion thereof), its
original issuance date (which will be the settlement
date) and (ii) with respect to any Certificated Note
(or portion thereof) issued subsequently upon
transfer or exchange of a Certificated Note or in
lieu of a destroyed, lost or stolen Certificated
Note, the original issuance date of the predecessor
Certificated Note, regardless of the date of
authentication of such subsequently issued
Certificated Note.
Registration: Certificated Notes will be issued only in fully
registered form without coupons.
Transfers and A Certificated Note may be presented
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41
Exchanges: for transfer or exchange at the corporate trust
office of Citibank. Certificated Notes will be
exchange-able for other Certificated Notes having
identical terms but different denominations without
service charge. Certificated Notes will not be
exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date more
than nine months from the settlement date for such
Note.
Currency: The currency denomination with respect to any
Certificated Note and the payment of interest and the
repayment of principal with respect to any such
Certificated Note shall be as set forth therein and
in the applicable Pricing Supplement.
Denominations: The denomination of any Certificated Note will be a
minimum of U.S. $100,000 or any amount in excess
thereof that is an integral multiple of U.S. $1,000
or the equivalent, as determined pursuant to the
provisions of the applicable Prospectus Supplement,
of U.S. $100,000 (rounded down to an integral
multiple of 1,000 units of such Specified Currency)
and any amount in excess thereof which is an integral
multiple of 1,000 units of such Specified Currency.
Interest: General. Interest on each Certificated Note will
accrue from the Original Issue Date of such Note for
the first interest period and from the most recent
date to which interest has been paid for all
subsequent interest periods. Each payment of
interest on a Certificated Note will include interest
accrued to but excluding the Interest Payment Date;
provided that in the case of Floating Rate Notes
which reset daily or weekly, interest payments will
include the Record Date immediately preceding the
Interest Payment Date, except that at maturity or
earlier redemption, the interest payable will include
interest accrued to, but excluding the Maturity Date
or the date of redemption, as the case may be.
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42
Fixed Rate Certificated Notes. Unless otherwise
specified pursuant to Settlement Procedure "A" below,
interest payments on Fixed Rate Certificated Notes
other than Amortizing Notes will be made
semi-annually on March 1 and September 1 of each year
and at maturity and Certificated Amortizing Notes
will pay principal and interest semi-annually each
March l and September l, or quarterly each March l,
June l, September 1, and December l, and at maturity;
provided, however, that in the case of Certificated
Fixed Rate Notes issued between a Record Date and an
Interest Payment Date, the first interest payment
will be made on the Interest Payment Date following
the next succeeding Record Date.
Floating Rate Certificated Notes. Interest payments
will be made on Floating Rate Certificated Notes
monthly, quarterly, semi-annually or annually.
Interest will be payable, in the case of Floating
Rate Certificated Notes with a daily, weekly or
monthly Interest Reset Date, on the third Wednesday
of each month or on the third Wednesday of March,
June, September and December, as specified pursuant
to settlement procedure "A" below; in the case of
Notes with a quarterly interest Payment Reset Date,
on the third Wednesday of March, June, September and
December of each year; in the case of Notes with a
semi-annual Interest Reset Date, on the third
Wednesday of the two months specified pursuant to
Settlement Procedure All below; and in the case of
Notes with an annual Interest Reset Date, on the
third Wednesday of the month specified pursuant to
Settlement Procedure "A" below; provided, however,
that if an Interest Payment Date for Floating Rate
Certificated Notes would otherwise be a day that is
not a Business Day with respect to such Floating Rate
Certificated Notes, such Interest Payment Date will
be the next succeeding Business Day with respect to
such Floating Rate Certificated Notes, except in the
case of a LIBOR Note if such Business Day is in
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43
the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding
Business Day; and provided, further, that in the case
of a Floating Rate Certificated Note issued between a
Record Date wand an Interest Payment Date, the first
interest payment will be made on the Interest Payment
Date following the next succeeding Record Date.
Calculation of Fixed Rate Certificated Notes.
Interest: Interest on Fixed Rate Certificated Notes (including
interest for partial periods) will be calculated on
the basis of a year of twelve thirty-day months.
Floating Rate Certificated Notes.
Interest rates on Floating Rate Certificated Notes
will be determined as set forth in the form of Notes.
Interest on Floating Rate Certificated Notes will be
calculated on the basis of actual days elapsed and a
year of 360 days except that in the case of Treasury
Rate Notes, interest will be calculated on the basis
of the actual number of days in the year.
Payments of Citibank will pay the principal
Principal and amount of each Certificated Note at
Interest: maturity or upon redemption upon presentation and
surrender of such Note to Citibank. Such payment,
together with payment of interest due at maturity or
upon redemption of such Note, will be made in funds
available for immediate use by Citibank and in turn
by the holder of such Note. Certificated Notes
presented to Citibank at maturity or upon redemption
for payment will be cancelled by Citibank and
delivered to the Company with a certificate of
cancellation. All interest payments on a
Certificated Note (other than interest due at
maturity or upon redemption) will be made by check
drawn on Citibank (or another person appointed by
Citibank) and mailed by Citibank to the person
entitled thereto as provided in such Note and the
relevant Indenture; provided, however, that the
holder of $10,000,000 or more of Notes having the
same Interest Payment Date
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44
will be entitled to receive payment by wire transfer
of immediately available funds. Following each
Record Date, Citibank will furnish the Company with a
list of interest payments to be made on the following
Interest Payment Date for each Certificated Note and
in total for all Certificated Notes. Interest at
maturity or upon redemption will be payable to the
person to whom the payment of principal is payable.
Citibank will provide monthly to the Company lists of
principal and interest, to the extent ascertainable,
to be paid on Certificated Notes maturing or to be
redeemed in the next month. Citibank will be
responsible for withholding taxes on interest paid on
Certificated Notes as required by applicable law.
If any Interest Payment Date or the Maturity Date or
redemption date of a Fixed-Rate Certificated Note is
not a Business Day, the payment due on such day shall
be made on the next succeeding Business Day and no
interest shall accrue on such payment for the period
from and after such Interest Payment Date, Maturity
Date or redemption date, as the case may be. If any
Interest Payment Date or the Maturity Date or
redemption date for any Certificated Floating Rate
Note would fall on a day that is not a Business Day
with respect to such Note, such Interest Payment
Date, Maturity Date or redemption date will be the
following day that is a Business Day with respect to
such Note, except that, in the case of a Certificated
LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date
shall be the immediately preceding day that is a
Business Day with respect to such Certificated LIBOR
Note.
Preparation of If any order to purchase a Certificated
Pricing Note is accepted by or on behalf of the
Supplement: Company, the Company will prepare a pricing
supplement (a "Pricing Supplement") reflecting the
terms of such Note and will arrange to file 10 copies
of such Pricing Supplement with the
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45
Commission in accordance with the applicable
paragraph of Rule 424(b) under the Act, will deliver
the number of copies of such Pricing Supplement to
the Agent as the Agent shall request by the close of
business on the following Business Day and will, on
the Agent's behalf, file five copies of such Pricing
Supplement with the NASD. The Agent will cause such
Pricing Supplement to be delivered to the purchaser
of the Note.
In each instance that a Pricing Supplement is
prepared, the Agent will affix the Pricing Supplement
to Prospectuses prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which they are
attached (other than those retained for files), will
be destroyed.
Settlement: The receipt by the Company of immediately available
funds in exchange for an authenticated Certificated
Note delivered to the Agent and the Agent's delivery
of such Note against receipt of immediately available
funds shall constitute "settlement" with respect to
such Note. All orders accepted by the Company will
be settled on or before the fifth Business Day next
succeeding the date of acceptance pursuant to the
timetable for settlement set forth below, unless the
Company and the purchaser agree to settlement on
another date.
Settlement Settlement Procedures with regard to each
Procedures: Certificated Note sold by the Company to or through
the Agent (except pursuant to a Terms Agreement)
shall be as follows:
A. The Agent will advise the Company by
telephone that such Note is a Certificated
Note and of the following settlement
information:
l. Name in which such Note is to be
registered ("Registered Owner").
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46
2. Address of the Registered Owner and
address for payment of principal and
interest.
3. Taxpayer identification number of
the Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate
Certificated Note, the interest rate
and whether such Note is an
Amortizing Note or, in the case of a
Floating Rate Certificated Note, the
Initial Interest Rate (if known at
such time), Base Rate, Index
Maturity, Interest Reset Period,
Initial Interest Reset Date,
Interest Reset Dates, Spread or
Spread Multiplier (if any), Minimum
Interest Rate (if any), Maximum
Interest Rate (if any), the
Alternate Rate Event Spread (if any)
and the applicability of the
Modified Following Banking Day
Convention.
7. Interest Payment Dates.
8. Redemption provisions, if any.
9. Ranking.
10. Settlement date.
11. Price.
12. Agent's commission if any,
determined as provided in the
Distribution Agreement between the
Company and the Agent.
13. Whether the Note is an OID Note, and
if it is an OID Note, the total
amount of OID, the yield to
maturity, the initial accrual period
OID and the
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applicability of Modified Payment
upon Acceleration.
14. Any other applicable Terms.
B. The Company will advise Citibank by telephone
or electronic transmission (confirmed in
writing at any time on the sale date) of the
information set forth in Settlement Procedure
"A" above.
C. The Company will have delivered to Citibank a
pre-printed four-ply packet for such Note,
which packet will contain the following
documents in forms that have been approved by
the Company, the Agent and the Trustee:
1. Note with customer confirmation.
2. Stub One - For Citibank.
3. Stub Two - For Agent.
4. Stub Three - For the Company.
D. Citibank will complete such Note and
authenticate such Note and deliver it (with
the confirmation) and Stubs One and Two to
the Agent, and the Agent will acknowledge
receipt of the Note by stamping or otherwise
marking Stub One and returning it to
Citibank. Such delivery will be made only
against such acknowledgment of receipt and
evidence that instructions have been given
by the Agent for payment to the account of
the Company at Citibank Bank, New York, New
York, in funds available for immediate use,
of an amount equal to the price of such Note
less the Agent's commission, if any. In the
event that the instructions given by the
Agent for payment to the account of the
Company are revoked, the Company will as
promptly as possible wire
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transfer to the account of the Agent an
amount of immediately available funds equal
to the amount of such payment made.
E. Unless the Agent purchased such Note as
principal, the Agent will deliver such Note
(with confirmation) to the customer against
payment in immediately payable funds. The
Agent will obtain the acknowledgment of
receipt of such Note by retaining Stub Two.
F. Citibank will send Stub Three to the Company
by first-class mail. Periodically, Citibank
will also send to the Company a statement
setting forth the principal amount of the
Notes Outstanding as of that date under each
Indenture and setting forth a brief
description of any sales of which the Company
has advised Citibank but which have not yet
been settled.
Settlement For sales by the Company of Certificated
Procedures Notes to or through the Agent (except
Timetable: Agent (except pursuant to a Terms Agreement),
Settlement Procedures "A" through "F" set forth above
shall be completed on or before the respective times
(New York City time) set forth below:
Settlement
Procedure Time
--------- ----
A 2:00 P.M. on day before
settlement date
B 3:00 P.M. on day before
settlement date
C-D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
Failure to If a purchaser fails to accept delivery
Settle: of and make payment for any Certificated Note, the
Agent will notify the Company and Citibank by
telephone and return such Note to Citibank. Upon
receipt of such
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notice, the Company will immediately wire transfer to
the account of the Agent an amount equal to the
amount previously credited thereto in respect of such
Note. Such wire transfer will be made on the
settlement date, if Possible, and in any event not
later than the Business Day following the settlement
date. If the failure shall have occurred for any
reason other than a default by the Agent in the
performance of its obligations hereunder and under
the Distribution Agreement with the Company, then the
Company will reimburse the Agent or Citibank, as
appropriate, on an equitable basis for its loss of
the use of the funds during the Period when they were
credited to the account of the Company. Immediately
upon receipt of the Certificated Note in respect of
which such failure occurred, Citibank will mark such
Note "cancelled," make appropriate entries in
Citibank's records and send such Note to the Company.
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