1
EXHIBIT 1.1
$500,000,000
H. F. AHMANSON & COMPANY
MEDIUM-TERM NOTES, SERIES A
DISTRIBUTION AGREEMENT
April 4, 1995
Lehman Brothers
Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower, World Financial Center
New York, New York 10281
Dear Sirs:
H. F. Ahmanson & Company, a Delaware corporation (the "Company"),
confirms its agreement with each of you (individually, an "Agent" and
collectively, the "Agents") (which terms shall, for all purposes of this
Agreement, include Lehman Government Securities Inc., an affiliate of Lehman
Brothers Inc.) with respect to the issuance and sale by the Company of up to
an aggregate of $500,000,000 in gross proceeds of its Medium-Term Notes,
Series A (the "Notes"). The Notes are to be issued from time to time pursuant
to an indenture, dated as of April 4, 1995 (as it may be supplemented or
amended from time to time, the "Indenture"), between the Company and Citibank,
N.A., as trustee (the "Trustee").
The Notes shall have the maturity ranges, applicable interest rates or
interest rate formulas, issue price, redemption and repayment provisions and
other terms set forth in the Prospectus referred to in Section 1(a) as it may
be amended or supplemented from time to time, including any supplement
providing for the interest rate, maturity and other terms of any Note (a
"Pricing Supplement"). The Notes will be issued, and the terms thereof
established, from time to time, by the Company in accordance with the
Indenture and the Procedures referred to below. This Agreement shall only
apply to sales of the Notes
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and not to sales of any other securities or evidences of indebtedness of the
Company and only on the specific terms set forth herein.
Subject to the terms and conditions stated herein and to the reservation
by the Company of the right to sell its Notes directly on its own behalf, the
Company hereby (i) appoints each of the Agents as the agent of the Company for
the purpose of soliciting and receiving offers to purchase Notes from the
Company and (ii) agrees that whenever the Company determines to sell Notes
directly to an Agent as principal it will enter into a separate agreement
(each a "Purchase Agreement"). Each such Purchase Agreement, whether oral (and
confirmed in writing, which may be by facsimile transmission) or in writing,
shall be with respect to such information (as applicable) as specified in
Exhibit C hereto, relating to such sale in accordance with Section 2(e)
hereof.
SECTION 1. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each Agent as of the date hereof,
as of the Closing Date (defined herein) and as of the times referred to in
Sections 6(a) and 6(b) hereof (the Closing Date and each such time being
hereinafter sometimes referred to as a "Representation Date"), as follows:
(a) General. The registration statement (No. 33-57395) relating to the
Notes (including a prospectus which, as supplemented, shall be used in
connection with sales of the Notes) has been filed with the Securities and
Exchange Commission ("Commission"); and such registration statement and each
post-effective amendment thereto have been declared effective by the
Commission. As used in this Agreement (i) "Registration Statement" means such
registration statement when it became effective under the Act, and as from
time to time amended or supplemented thereafter (if any post-effective
amendment to such registration statement has been filed with the Commission
prior to the execution and delivery of this Agreement, the time the most
recent such amendment has been declared effective by the Commission); (ii)
"Basic Prospectus" means the prospectus (including all documents incorporated
therein by reference) included in the Registration Statement; and (iii)
"Prospectus" means the Basic Prospectus (together with all documents
incorporated therein by reference) and any amendments or supplements thereto
(including the applicable Pricing Supplement) relating to the Notes, as filed
with the Commission pursuant to paragraph (b) of Rule 424 of the Rules and
Regulations (defined below). The Commission has not issued any order
preventing or suspending the use of the Prospectus. Any reference in this
Agreement to amending or supplementing the Prospectus shall be deemed to
include the filing of materials incorporated by reference in the Prospectus
after the Closing Date (defined herein) and any reference in this Agreement to
any amendment or supplement to the Prospectus shall be deemed to include any
such materials incorporated by reference in the Prospectus after the Closing
Date (defined herein).
(b) Registration Statement, Prospectus and Indenture: Contents. On the
effective date of the Registration Statement, such Registration Statement
conformed in all respects to the requirements of the Securities Act of 1933
("Act") and the rules and regulations of the Commission ("Rules and
Regulations") and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, and the Registration Statement and each
Prospectus will conform as of the applicable Representation Date and at all
times during each period during which, in the opinion of counsel for the
Agents, a prospectus relating to the Notes is required to be delivered under
the Act (each a "Marketing Period"), in all respects to the requirements of
the Act and the Rules and Regulations and will not as of the applicable
Representation Date and at all times during each Marketing Period contain any
untrue statement of a material fact or omit to state any material
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fact required to be stated therein or necessary to make the statements therein
not misleading, except that the Company makes no representation or warranty as
to information contained in or omitted from the Registration Statement or any
Prospectus in reliance upon and in conformity with written information
furnished to the Company by the Agents specifically for inclusion therein.
(c) Validity of the Indenture and the Notes. (i) The Indenture has been
duly authorized, executed and delivered by the Company and constitutes the
valid and legally binding obligation of the Company, enforceable in accordance
with its terms; (ii) the Notes have been validly authorized for issuance and
sale pursuant to this Agreement and, when the terms of the Notes and of their
issue and sale have been duly established in accordance with the Indenture and
this Agreement so as not to violate any applicable law or agreement or
instrument binding on the Company, and the Notes have been duly executed,
authenticated, delivered and paid therefor as provided in this Agreement and
the Indenture, the Notes will be validly issued and outstanding, and will
constitute valid and legally binding obligations of the Company entitled to
the benefits of the Indenture and enforceable in accordance with their terms
and the terms of the Indenture; and (iii) the Notes and the Indenture conform
in all material respects to the descriptions thereof contained in each
Prospectus. The validity, enforceability and legally binding nature of the
Indenture and the Notes are subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(d) Investment Company Act. The Company is not required to register
under the provisions of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and no action need be taken with respect to or
under the Investment Company Act by reason of the issuance of the Notes by the
Company.
(e) Rating. The Notes have been rated by a "nationally recognized
statistical rating organization" (as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act), including one or both of
Moody's Investor Services, Inc. and Standard & Poor's Corporation.
(f) Doing Business with Cuba. The Company confirms as of the date
hereof, and each acceptance by the Company of an offer to purchase Notes will
be deemed to be an affirmation, that the Company is in compliance with all
provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act Relating to
Disclosure of Doing Business with Cuba, and the Company further agrees that if
it commences engaging in business with the government of Cuba or with any
person or affiliate located in Cuba after the date the Registration Statement
becomes or has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"), whichever date is later,
or if the information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in Cuba
changes in any material way, the Company will provide the Department notice of
such business or change, as appropriate, in a form acceptable to the
Department.
SECTION 2. SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL
(a) Appointment. Subject to the terms and conditions stated herein, the
Company hereby appoints each of the Agents as the agent of the Company for the
purpose of soliciting or receiving offers to purchase the Notes from the
Company by others. On the basis of the representations and warranties
contained herein, but subject to the terms and conditions herein set forth,
each Agent agrees, as the agent of the Company, to use its reasonable efforts
to solicit offers to purchase the Notes upon the terms and
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conditions set forth in the Prospectus. The Company may offer the Notes for
sale from time to time otherwise than through an Agent. However, so long as
this Agreement is in effect the Company shall not solicit offers to purchase
Notes through any agent without (i) amending this Agreement to appoint such
agent as an additional Agent hereunder on the same terms and conditions as
provided herein for the Agents (the consent of the then current Agents shall
not be necessary for such purpose) and (ii) delivering 2 days prior written
notice thereof to the Agents. The Company may, however, accept offers to
purchase Notes through an agent other than an Agent, provided that (i) the
Company shall not have solicited such offers, (ii) the Company and such agent
shall have executed an agreement with respect to such purchases having the
same terms and conditions (including, without limitation, commission and
discount rates) as those which would apply to such purchases under this
Agreement if such agent were an Agent (which may be accomplished by
incorporating by reference in such agreement the terms and conditions of this
Agreement) and (iii) the Company shall provide the Agents with a copy of such
agreement promptly following the execution thereof. Each Agent may also
purchase Notes from the Company as principal for purposes of resale, as more
fully described in paragraph (e) of this Section.
(b) Suspension of Solicitation. The Company reserves the right, in its
sole discretion, to suspend solicitation of offers to purchase the Notes
commencing at any time for any period of time or indefinitely. Upon receipt of
at least one business day's prior written or telephonic (confirmed in writing
by facsimile) notice from the Company, the Agents will forthwith suspend
solicitation of offers to purchase Notes from the Company until such time as
the Company has advised the Agents that such solicitation may be resumed. For
the purpose of the foregoing sentence, "business day" shall mean any day which
is not a Saturday or Sunday and which is not a day on which (i) banking
institutions are generally authorized or obligated by law to close in The City
of New York and (ii) the New York Stock Exchange is closed for trading.
Upon receipt of notice from the Company as contemplated by Section 3(b)
hereof, each Agent shall suspend its solicitation of offers to purchase Notes
until such time as the Company shall have furnished it with an amendment or
supplement to the Registration Statement or the Prospectus, as the case may
be, contemplated by Section 3(b) and shall have advised such Agent that such
solicitation may be resumed.
(c) Agent's Commission. Promptly upon the closing of the sale of any
Notes sold by the Company as a result of a solicitation made by or offer to
purchase received by an Agent, the Company agrees to pay such Agent a
commission, in the form of a discount, in accordance with the schedule set
forth in Exhibit A hereto.
(d) Solicitation of Offers. The Agents are authorized to solicit offers
to purchase the Notes only in denominations as are specified in the Prospectus
at a purchase price as shall be specified by the Company. Each Agent shall
communicate to the Company, orally or in writing, each reasonable offer to
purchase Notes received by it as an Agent. The Company shall have the sole
right to accept offers to purchase the Notes and may reject any such offer in
whole or in part. Each Agent shall have the right, in its discretion
reasonably exercised without advising the Company, to reject any offer to
purchase the Notes received by it, in whole or in part, and any such rejection
shall not be deemed a breach of its agreement contained herein.
No Note which the Company has agreed to sell pursuant to this Agreement
shall be deemed to have been purchased and paid for, or sold by the Company,
until such Note shall have been delivered to the purchaser thereof against
payment by such purchaser.
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(e) Purchases as Principal. Each sale of Notes to any Agent as
principal, for resale to one or more investors or to another broker-dealer
(acting as principal for purposes of resale), shall be made in accordance with
the terms of this Agreement and a Purchase Agreement whether oral (and
confirmed in writing by such Agent to the Company, which may be by facsimile
transmission) or in writing, which will provide for the sale of such Notes to,
and the purchase thereof by, such Agent. A Purchase Agreement may also specify
certain provisions relating to the reoffering of such Notes by such Agent. The
commitment of any Agent to purchase Notes from the Company 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 Purchase Agreement shall specify the
principal amount and terms of the Notes to be purchased by an Agent, the time
and date (each such time and date being referred to herein as a "Time of
Delivery") and place of delivery of and payment for such Notes and such other
information (as applicable) as is set forth in Exhibit C hereto. The Company
agrees that if any Agent purchases Notes as principal for resale such Agent
shall receive such compensation, in the form of a discount or otherwise, as
shall be indicated in the applicable Purchase Agreement or, if no compensation
is indicated therein a commission in accordance with Exhibit A hereto. Any
Agent may utilize a selling or dealer group in connection with the resale of
such Notes. In addition, any Agent may offer the Notes it has purchased as
principal to other dealers. Any Agent may sell Notes to any dealer at a
discount and, unless otherwise specified in the applicable Pricing Supplement,
such discount allowed to any dealer will not be in excess of 66 2/3% of the
discount to be received by such Agent from the Company. Such Purchase
Agreement shall also specify any requirements for delivery of opinions of
counsel, accountant's letters and officers' certificates pursuant to Section 5
hereof.
(f) Administrative Procedures. Administrative procedures respecting the
sale of Notes (the "Procedures") are set forth in Exhibit B hereto and may be
amended in writing from time to time by the Agents and the Company. Each Agent
and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them herein and in the
Procedures. The Procedures shall apply to all transactions contemplated
hereunder including sales of Notes to any Agent as principal pursuant to a
Purchase Agreement, unless otherwise set forth in such Purchase Agreement.
(g) Delivery of Documents. The documents required to be delivered by
Section 5 hereof shall be delivered at the offices of Sullivan & Cromwell, 444
South Flower Street, Los Angeles, California 90071, not later that 10:00 A.M.,
Los Angeles time, on the date of this Agreement or at such later time as may
be mutually agreed upon by the Company and the Agents, which in no event shall
be later than the time at which the Agents commence solicitation of offers to
purchase Notes hereunder (the "Closing Date").
SECTION 3. COVENANTS OF THE COMPANY
The Company covenants and agrees:
(a) Delivery of Documents. To deliver promptly to the Agents, and in
such number as they may reasonably request, each of the following documents:
(i) copies of the Registration Statement, including all exhibits, (ii) the
Basic Prospectus, (iii) each Prospectus and (iv) any documents incorporated by
reference in the Prospectus.
(b) Revisions to Prospectus - Material Changes. If, during any
Marketing Period, any event occurs as a result of which the Prospectus would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading, or if it is
necessary at any time
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to amend any Prospectus to comply with the Act, to notify the Agents promptly,
in writing, to suspend solicitation of purchases of the Notes; and if the
Company shall decide to amend or supplement the Registration Statement or any
Prospectus, to promptly advise the Agents by telephone (with confirmation in
writing) and to promptly, in writing, prepare and file with the Commission an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance; provided, however, that if during
the period referred to above any Agent shall own any Notes which it has
purchased from the Company as principal with the intention of reselling them,
the Company shall promptly prepare and timely file with the Commission any
amendment or supplement to the Registration Statement or any Prospectus that
may, in the judgment of the Company or the Agents, be required by the Act or
requested by the Commission.
(c) Commission Filings. To timely file with the Commission during any
Marketing Period, all documents (and any amendments to previously filed
documents) required to be filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act.
(d) Copies of Filings with Commission. At or prior to filing with the
Commission during any Marketing Period, (i) any amendment or supplement to the
Registration Statement, (ii) any amendment or supplement to any Prospectus or
(iii) any document incorporated by reference in any of the foregoing or any
amendment of or supplement to any such incorporated document, to furnish a
copy thereof to the Agents.
(e) Notice to Agent of Certain Events. To advise the Agents immediately
(i) when any post-effective amendment to the Registration Statement relating
to or covering the Notes becomes effective; (ii) of any request or proposed
request by the Commission for an amendment or supplement to the Registration
Statement, to any Prospectus, to any document incorporated by reference in any
of the foregoing or for any additional information and the Company will afford
the Agents a reasonable opportunity to comment on any such proposed amendment
or supplement; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any part thereof
or any order directed to any Prospectus or any document incorporated therein
by reference or the initiation or threat of any stop order proceeding; (iv) of
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 threat of any proceeding for that purpose; (v) of notice received by the
Company (whether formal or informal) of any downgrading in the rating of the
Notes or any other debt securities or preferred stock of the Company, by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act); (vi) any public announcement by
Standard & Poor's Corporation or Moody's Investors Service, Inc. that such
organization has under surveillance or review with possible negative
implications its rating of any debt securities or preferred stock of the
Company; and (vii) of the happening of any event which makes untrue any
statement of material fact made in the Registration Statement or any
Prospectus or which requires the making of a change in the Registration
Statement or any Prospectus in order to make any material statement therein
not misleading.
(f) Stop Orders. If, during any Marketing Period, the Commission shall
issue a stop order suspending the effectiveness of the Registration Statement,
to make every reasonable effort to obtain the lifting of that order at the
earliest possible time.
(g) Earnings Statements. As soon as practicable, but not later than 18
months after the date of each acceptance by the Company of an offer to
purchase Notes hereunder, to make generally available to its security holders
an earnings statement covering a period of at least 12 months beginning after
the later of (i) the effective date of the Registration Statement, (ii) the
effective date of the most recent post-
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effective amendment to the Registration Statement to become effective prior to
the date of such acceptance and (iii) the date of the Company's most recent
Annual Report on Form 10-K filed with the Commission prior to the date of such
acceptance which will satisfy the provisions of Section 11(a) of the Act
(including, at the option of the Company, Rule 158 of the Rules and
Regulations under the Act).
(h) Copies of Reports, Releases and Financial Statements. So long as
any of the Notes are outstanding, to furnish to the Agents, not later than the
time the Company makes the same available to others, copies of all public
reports or releases and all reports and financial statements furnished by the
Company to any securities exchange on which the Notes are listed pursuant to
requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission thereunder.
(i) Blue Sky Qualifications. To endeavor, in cooperation with the
Agents, to qualify the Notes for offering and sale under the securities laws
of such jurisdictions as the Agents may designate, and to maintain such
qualifications in effect for as long as may be required for the distribution
of the Notes; and to file such statements and reports as may be required by
the laws of each jurisdiction in which the Notes have been qualified as above
provided; provided that the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
such jurisdiction.
(j) Holdback. Between the date of a Purchase Agreement and the date of
delivery of the Notes with respect thereto, the Company will not, without the
prior consent of each Agent party to such Purchase Agreement, offer or sell,
or enter into any agreement to sell, any debt securities substantially similar
to the Notes to be sold pursuant to such Purchase Agreement, other than the
Notes which are to be sold pursuant to such Purchase Agreement and commercial
paper, securities sold under agreements to repurchase and borrowings under
bank lines of credit in the ordinary course of business.
(k) Pricing Supplement. To prepare, with respect to any Notes to be
sold through or to the Agents pursuant to this Agreement, a Pricing Supplement
with respect to such Notes in a form previously approved by the Agents and to
file such Pricing Supplement timely pursuant to Rule 424 under the Act with
the Commission.
SECTION 4. PAYMENT OF EXPENSES
The Company will pay: (i) the costs of the Company incident to the
authorization, issuance, sale and delivery of the Notes and any taxes payable
in that connection; (ii) the costs incident to the preparation, printing and
filing under the Act of the Registration Statement and any amendments and
exhibits thereto; (iii) the costs incident to the preparation, printing and
filing of any document and any amendments and exhibits thereto required to be
filed by the Company under the Exchange Act; (iv) the costs of distributing
the Registration Statement as originally filed, and each amendment and post-
effective amendment thereof (including exhibits), the Basic Prospectus, each
Prospectus, any supplement or amendment to any Prospectus and any documents
incorporated by reference in any of the foregoing documents; (v) the fees and
disbursements of the Trustee, any paying agent, any calculation agent, any
exchange agent and any other agents appointed by the Company, and their
respective counsel; (vi) the costs and fees in connection with the listing of
the Notes on any securities exchange; (vii) the cost and fees in connection
with any filings with the National Association of Securities Dealers, Inc.;
(viii) the reasonable fees and disbursements of counsel to the Company and
counsel to the Agents; (ix) the fees paid to rating agencies in connection
with the rating of the Notes; (x) the fees and expenses of qualifying the
Notes under the securities laws of the several jurisdictions as provided in
Section 3(i) hereof and of
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preparing and printing a Blue Sky Memorandum and a memorandum concerning the
legality of the Notes as an investment (including reasonable fees and expenses
of counsel for the Agents in connection therewith); (xi) all advertising
expenses in connection with the offering of the Notes incurred with the
consent of the Company; (xii) all other costs and expenses incurred by the
Company arising out of the transactions contemplated hereunder and incident to
the performance of the Company's obligations under this Agreement; and (xiii)
all reasonable out-of-pocket expenses of the Agents incurred in connection
with the transactions contemplated by this Agreement.
SECTION 5. CONDITIONS OF OBLIGATIONS OF AGENTS
The obligation of the Agents, as agents of the Company, under this
Agreement to solicit offers to purchase the Notes, the obligation of any
person who has agreed to purchase Notes to make payment for and take delivery
of Notes, and the obligation of any Agent to purchase Notes pursuant to any
Purchase Agreement, is subject to the accuracy, on each Representation Date,
of the representations and warranties of the Company contained herein, to the
accuracy of the statements of the Company's officers made in any certificate
furnished pursuant to the provisions hereof, to the performance by the Company
of its obligations hereunder, and to each of the following additional terms
and conditions:
(a) Registration Statement. The Prospectus as amended or supplemented
(including the Pricing Supplement) with respect to such Notes shall have been
filed with the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the Rules and Regulations
and in accordance with Section 3(k) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof nor any order
directed to any document incorporated by reference in any Prospectus shall
have been issued and no stop order proceeding shall have been initiated or
threatened by the Commission; any request of the Commission for inclusion of
additional information in the Registration Statement or any Prospectus or
otherwise shall have been complied with; and the Company shall not have filed
with the Commission any amendment or supplement to the Registration Statement
or any Prospectus (or any document incorporated by reference therein) without
the consent of the Agents, which shall not be unreasonably withheld.
(b) No Suspension of Sale of the Notes. No order suspending the sale of
the Notes in any jurisdiction designated by the Agents pursuant to
Section 3(i) hereof shall have been issued, and no proceeding for that purpose
shall have been initiated or threatened.
(c) No Material Omissions or Untrue Statements. The Agents shall not
have discovered and disclosed to the Company that the Registration Statement
or any Prospectus contains an untrue statement of a fact which, in the opinion
of counsel for the Agents, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or
is necessary to make the statements therein not misleading.
(d) Legal Matters Satisfactory to Counsel. All corporate proceedings
and other legal matters incident to the authorization, form and validity of
this Agreement, the Notes, the Indenture, the form of the Registration
Statement, each Prospectus (other than financial statements and other
financial data) and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be satisfactory in all respects to
counsel for the Agents and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to enable them
to pass upon such matters.
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(e) Opinion of Company Counsel. At the Closing Date, the Agents shall
have received the opinion, addressed to the Agents and dated the Closing Date,
of Tim S. Glassett, Assistant General Counsel of the Company (which counsel
may rely, as to matters of New York law and as to the tax matters set forth in
paragraph (ix) below, on an opinion of Gibson, Dunn & Crutcher delivered
concurrently therewith), or other counsel acceptable to you, in form and
substance reasonably satisfactory to the Agents and their counsel, to the
effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, and
Home Savings of America, FSB ("Home Savings") has been duly organized and
is validly existing as a savings bank in good standing under the laws of
the United States of America, each with all necessary corporate power to
own its properties and conduct its business as described in the Prospectus,
and Home Savings is a member of the Federal Home Loan Bank of San
Francisco; and the savings accounts of depositors in Home Savings are
insured by the Federal Deposit Insurance Corporation ("FDIC") in accordance
with the law and the rules and regulations of the FDIC;
(ii) The Indenture has been duly authorized, executed and delivered by
the Company; the Indenture conforms in all material respects to the
description thereof contained in the Prospectus; the Indenture constitutes
the valid and legally binding obligation of the Company subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights, and to
general equity principles, regardless of whether such enforcement is
considered in a proceeding at law or in equity;
(iii) The Notes have been duly authorized and established in
conformity with the Indenture; the Notes conform in all material respects
to the description thereof contained in the Prospectus; when the terms of a
particular Note and of its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity with the
Indenture, and such Note has been duly completed, executed, authenticated
and issued in accordance with the Indenture and delivered against payment
in accordance with this Agreement, such Note will constitute a valid and
legally binding obligation of the Company subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights, and to general
equity principles, regardless of whether such enforcement is considered in
a proceeding at law or in equity;
(iv) Each of the Company and Home Savings has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction;
(v) To the best of such counsel's knowledge, (A) the Company and Home
Savings are conducting their respective businesses in compliance in all
material respects with all applicable material Federal and State laws and
regulations (including without limitation all regulations and orders of the
Commission and FDIC), and (B) neither the Company nor Home Savings is
charged with or under investigation with respect to any material violation
of any such laws or regulations or the subject of any pending or threatened
material adverse proceedings by any such regulatory authority having
jurisdiction over its business or operations;
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(vi) This Agreement and any Purchase Agreement with respect to the
Notes have been duly authorized, executed and delivered by the Company;
(vii) The execution, delivery and performance by the Company of the
Indenture, this Agreement and any Purchase Agreement with respect to the
Notes and the issuance and sale of the Notes and compliance by the Company
with the terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under (A) any statute, rule, regulation or order known to such counsel of
any governmental agency or body or any court having jurisdiction over the
Company or Home Savings or any of their properties (provided that such
counsel need not express any opinion in this clause (A) with respect to the
anti-fraud provisions of the Federal securities laws, rules and regulations
that are expressly considered in other sections of its opinion, or with
respect to state securities or blue sky laws), (B) any agreement or
instrument listed as material to the Company or Home Savings on the
officer's certificate annexed to such opinion, to which the Company or Home
Savings is a party or by which the Company or Home Savings is bound or to
which any of the properties of the Company or Home Savings is subject, or
(C) the Certificate of Incorporation or Bylaws of the Company or Charter or
Bylaws of Home Savings;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale by the Company of the Notes or the
consummation by the Company of the other transactions contemplated by this
Agreement and any Purchase Agreement with respect to the Notes, except the
registration of the Notes under the Act, the qualification of the Indenture
under the Trust Indenture Act of 1939 and such consents, approvals,
authorizations, registrations or qualifications as have been obtained or
may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Notes; and
(ix) The Registration Statement and Prospectus and any further
amendments and supplements thereto made by the Company prior to such
Closing Date (other than the financial statements and related schedules and
other financial and statistical data therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations; the description in
the Prospectus under the captions "H. F. Ahmanson & Company" and
"Description of Debt Securities" together with the description in the
Prospectus Supplement under the caption "Description of Notes," of
statutes, rules, regulations, legal and governmental proceedings and
contracts and other documents described therein are accurate in all
material respects and fairly present the information required to be shown;
and the description in the Prospectus under the caption "Certain Federal
Income Tax Considerations," together with the description in the Prospectus
Supplement under the caption "Certain United States Federal Income Tax
Considerations" of statutes, rules and regulations described therein
accurately summarize the material United States federal income tax
considerations relevant to the purchase, ownership and disposition of the
Notes.
You shall have also received from such counsel a written statement, dated
the Closing Date, to the effect that, based on his participation in the
preparation thereof, no facts have come to the attention of such counsel that
would lead him to believe that, as of its effective date, the Registration
Statement or any further amendment or supplement thereto made by the Company
prior to such Closing Date (other than the financial statements and related
schedules and other financial or statistical data therein, as to which such
counsel need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not
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misleading or that, as of its date, the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Closing Date (other than
the financial statements and related schedules and other financial or
statistical data therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that as of such
Closing Date, the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Closing Date
(other than the financial statements and related schedules and other financial
or statistical data therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading; provided that such counsel may state that the limitations inherent
in his examination and the knowledge available to him are such that he is
unable to assume, and does not assume, any responsibility for the accuracy,
completeness or fairness of such statements except for those statements under
the captions "H. F. Ahmanson & Company," "Description of Debt Securities" and
"Certain Federal Income Tax Considerations" in the Prospectus and under the
captions "Description of Notes" and "Certain United States Federal Income Tax
Considerations" in the Prospectus Supplement insofar as statutes, rules,
regulations, contracts or other documents are described therein; and such
counsel does not know of any legal or governmental proceedings required to be
described in the Prospectus which are not described as required, or of any
contracts or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by reference into
the Prospectus or required to be described in the Registration Statement or
Prospectus which are not filed or incorporated by reference or described as
required.
(f) Officers' Certificate. The Company shall have furnished to the Agents
on the Closing Date a certificate, dated the Closing Date, of the President or
any Vice President and a principal financial or accounting officer of the
Company stating that to the best of their knowledge after reasonable
investigation in their capacity as officers of the Company (i) the
representations and warranties of the Company herein are true and correct, (ii)
the Company has complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder,
(iii) the matters set forth in subsection (a) of this Section are true and
correct and (iv) there has been no change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Company or its subsidiaries which materially impairs the investment quality
of the Notes.
(g) Accountant's Letter. The Company shall have furnished to the Agents
on the Closing Date a letter of KPMG Peat Marwick LLP, addressed jointly to the
Company and the Agents and dated the Closing Date, of the type described in the
American Institute of Certified Public Accountants' Statement on Auditing
Standards No. 72, in form and substance reasonably satisfactory to the Agents to
the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
Rules and Regulations;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the Rules and Regulations; and they have
made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro
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forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the Agents;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form 10-Q
and the Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(D) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated stockholders' equity,
total deposits or total assets, or changes in allowance for possible
loan losses or other items specified by the Agents, or any increases
in Federal Home Loan Bank advances or any other items specified by the
Agents, in each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases
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which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (D) there were any decreases
in consolidated net interest income, consolidated noninterest income
or total or per share amounts of consolidated net income or other
items specified by the Agents, or any increases in any items specified
by the Agents, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Agents, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(iv) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraph (iii) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Agents which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II
of, or in exhibits and schedules to, the Registration Statement specified
by the Agents or in documents incorporated by reference in the Prospectus
specified by the Agents, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
All references in this subsection 5(g) to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as amended or supplemented in relation to the applicable Notes at the
Closing Date for such Notes.
(h) The Agents shall have received from Sullivan & Cromwell, counsel to
the Agents, such opinion or opinions, dated the Closing Date, with respect to
the issuance and sale of the Notes, the Indenture, the Registration Statement,
the Prospectus and other related matters as the Agents may reasonably require,
and the Company shall have furnished to such counsel such documents as they may
request for the purpose of enabling them to pass upon such matters.
(i) Additional Conditions. There shall not have occurred: (i) any change,
or any development involving a prospective change, in or affecting particularly
the business or properties of the Company or its subsidiaries which, in the
judgment of the Agents, materially impairs the investment quality of the Notes;
(ii) any downgrading in the rating of any debt securities or preferred stock of
the Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act); (iii) neither Standard and
Poor's Corporation nor Moody's Investors Service, Inc. shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its ratings of any of the Company's debt securities or preferred
stock; (iv) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (v) a general
moratorium on commercial banking activities in New York or California declared
by either Federal or applicable state authorities; or (vi) the outbreak or
escalation of major hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of any such
event specified in Clauses (i) or (vi) in the judgment
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of the Agents makes it impracticable to proceed with the solicitation of
offers to purchase Notes or the purchase of Notes from the Company as
principal pursuant to the applicable Purchase Agreement, as the case may be.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in the form and substance satisfactory to
counsel for the Agents.
SECTION 6. ADDITIONAL COVENANTS OF THE COMPANY
The Company covenants and agrees that:
(a) Acceptance of Offer Affirms Representations and Warranties. Each
acceptance by it of an offer for the purchase of Notes shall be deemed to be an
affirmation that the representations and warranties of the Company contained in
this Agreement and in any certificate theretofore given to the Agents pursuant
hereto are true and correct at the time of such acceptance, and an undertaking
that such representations and warranties will be true and correct at the time of
delivery to the purchaser or his agent of the Notes relating to such acceptance
as though made at and as of each such time (and such representations and
warranties shall relate to the Registration Statement and the Prospectus as
amended or supplemented to each such time).
(b) Subsequent Delivery of Officers' Certificates. The Company agrees
that during each Marketing Period, each time that the Registration Statement or
any Prospectus shall be amended or supplemented (other than by a Pricing
Supplement providing solely for the interest rates or maturities of the Notes or
the principal amount of Notes remaining to be sold or similar changes), each
time the Company sells Notes to an Agent as principal and the applicable
Purchase Agreement specifies the delivery of an officers' certificate under this
Section 6(b) as a condition to the purchase of Notes pursuant to such Purchase
Agreement or the Company files with the Commission any document incorporated by
reference into any Prospectus, the Company shall submit to the Agents a
certificate, (i) as of the date of such amendment, supplement, Time of Delivery
relating to such sale or filing or (ii) if such amendment, supplement or filing
was not filed during a Marketing Period, as of the first day of the next
succeeding Marketing Period, representing that the statements contained in the
certificate referred to in Section 5(f) hereof which was last furnished to the
Agents are true and correct at the time of such amendment, supplement or filing,
as the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and each
Prospectus as amended and supplemented to such time).
(c) Subsequent Delivery of Legal Opinions. The Company agrees that during
each Marketing Period, each time that the Registration Statement or any
Prospectus shall be amended or supplemented (other than by a Pricing Supplement
providing solely for the interest rates or maturities of the Notes or the
principal amount of Notes remaining to be sold or similar changes), each time
the Company sells Notes to an Agent as principal and the applicable Purchase
Agreement specifies the delivery of a legal opinion under this Section 6(c) as a
condition to the purchase of Notes pursuant to such Purchase Agreement or the
Company files with the Commission any document incorporated by reference into
any Prospectus, the Company shall, (i) concurrently with such amendment,
supplement, Time of Delivery relating to such sale or filing or (ii) if such
amendment, supplement or filing was not filed during a Marketing Period, on the
first day of the next succeeding Marketing Period, furnish the Agents and their
counsel with the written opinion of counsel to the Company specified in Section
5(e) hereof, addressed
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to the Agents and dated the date of delivery of such opinion, in form
reasonably satisfactory to the Agents, of the same effect as the opinion
referred to in Section 5(e) hereof, but modified, as necessary, to relate to
the Registration Statement and each Prospectus as amended or supplemented to
the time of delivery of such opinion; provided, however, that in lieu of such
opinion, such counsel may furnish the Agents with a letter to the effect that
the Agents may rely on such prior opinion to the same extent as though it was
dated the date of such letter authorizing reliance (except that statements in
such prior opinion shall be deemed to relate to the Registration Statement and
each Prospectus as amended or supplemented to the time of delivery of such
letter authorizing reliance).
(d) Subsequent Delivery of Accountant's Letters. The Company agrees that
during each Marketing Period, each time that the Registration Statement or any
Prospectus shall be amended or supplemented to include additional financial
information, each time the Company sells Notes to an Agent as principal and the
applicable Purchase Agreement specifies the delivery of a letter under this
Section 6(d) as a condition to the purchase of Notes pursuant to such Purchase
Agreement or the Company files with the Commission any document incorporated by
reference into any Prospectus which contains additional financial information,
the Company shall cause KPMG Peat Marwick LLP (or other independent accountants
of the Company reasonably acceptable to the Agents) to furnish the Agents, (i)
concurrently with such amendment, supplement, Time of Delivery relating to such
sale or filing or (ii) if such amendment, supplement, or filing was not filed
during a Marketing Period, on the first day of the next succeeding Marketing
Period, a letter, addressed jointly to the Company and the Agents and dated the
date of delivery of such letter, in form and substance reasonably satisfactory
to the Agents, of the same effect as the letter referred to in Section 5(g)
hereof but modified to relate to the Registration Statement and each Prospectus,
as amended and supplemented to the date of such letter, with such changes as may
be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company; provided,
however, that if the Registration Statement or any Prospectus is amended or
supplemented solely to include financial information as of and for a fiscal
quarter, such accountants may limit the scope of such letter to the unaudited
financial statements included in such amendment or supplement unless there is
contained therein any other accounting, financial or statistical information
that, in the reasonable judgment of the Agents, should be covered by such
letter, in which event such letter shall also cover such other information.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION
(a) Indemnification of Agents. The Company shall indemnify and hold
harmless each Agent and each person, if any, who controls any Agent within the
meaning of the Act from and against any loss, claim, damage or liability, joint
or several, and any action in respect thereof, to which such Agent or
controlling person may become subject, under the Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus, or arises out of, or
is based upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Agent and controlling person for any legal
and other expenses reasonably incurred as such expenses are incurred by such
Agent or controlling person in investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in the Form T-1 or made in the Registration Statement or the Prospectus in
reliance upon and in conformity with written information
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furnished to the Company by the Agents specifically for inclusion therein;
provided further, that as to any prospectus included in the Registration
Statement before it became effective under the Act (a "Preliminary
Prospectus") this indemnity agreement shall not inure to the benefit of any
Agent on account of any loss, claim, damage, liability or action arising from
the sale of Notes to any person by that Agent if that Agent failed to send or
give a copy of the Prospectus, as the same may be amended or supplemented, to
that person within the time required by the Act, and the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Company
with Section 3(a). The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Agent or controlling
person.
(b) Indemnification of the Company. Each Agent shall indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and any person who controls the Company within the
meaning of the Act from and against any loss, claim, damage or liability, joint
or several, and any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Act, the
Exchange Act or federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, or
arises out of, or is based upon, the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Agent specifically for inclusion therein, and shall
reimburse the Company or any such director, officer or controlling person for
any legal and other expenses reasonably incurred as such expenses are incurred
by such indemnified party in investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action. The foregoing
indemnity agreement is in addition to any liability which any Agent may
otherwise have to the Company or any of its directors, officers or controlling
persons.
(c) Notice. Promptly after receipt by an indemnified party under this
Section of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party in writing
of the claim or the commencement of action; provided, however, that the failure
to notify the indemnifying party shall not relieve it from any liability which
it may have to an indemnified party otherwise than under this Section. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein, and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Agents shall have the right to employ counsel to represent the Agents who
may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Agents against the Company under this Section if,
in the reasonable judgment of the Agents, it is advisable for the Agents to be
represented by separate counsel, and in that event the fees and expenses of such
counsel shall be paid by the Company. It is understood, however, that the
Company shall not be liable for the fees and expenses of more than one counsel
for the Agents in any claim or action, or any separate but substantially similar
or related claims or actions in the same jurisdiction arising out of the same
general factual allegations or circumstances. The indemnifying party shall not
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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, 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 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) Contribution. If the indemnification provided for in this Section 7
shall for any reason be unavailable to an indemnified party under Section 7(a)
or 7(b) hereof in respect of any loss, claim, damage or liability, or any action
in respect thereof, referred to therein, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and any Agents on the other from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and any Agents on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and any Agents on the
other with respect to such offering shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Notes (before deducting
expenses) received by the Company bears to the total commissions received by the
such Agent with respect to such offering. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or any Agent, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Agents agree that it
would not be just and equitable if contributions pursuant to this Section 7(d)
were to be determined by pro rata allocation (even if the Agents were treated as
one entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
7(d) shall be deemed to include, for purposes of this Section 7(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the Notes sold
through such Agent and distributed to the public were offered to the public
exceeds the amount of any damages which such Agent has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
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SECTION 8. STATUS OF EACH AGENT
In soliciting offers to purchase the Notes from the Company pursuant to
this Agreement (other than in respect of any Purchase Agreement), each Agent is
acting individually and not jointly and is acting solely as agent for the
Company and not as principal. Each Agent will make reasonable efforts to assist
the Company in obtaining performance by each purchaser whose offer to purchase
Notes from the Company has been solicited by such Agent and accepted by the
Company but such Agent shall have no 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 (i) hold the Agents harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii), in
particular, pay to the Agents any commission to which they would be entitled in
connection with such sale.
SECTION 9. REPRESENTATIONS, WARRANTIES AND OBLIGATIONS TO SURVIVE DELIVERY
The respective indemnities, agreements, representations, warranties and
other statements of the Company and the Agents contained in this Agreement, or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Agent or any person controlling such Agent or by or
on behalf of the Company, and shall survive each delivery of and payment for any
of the Notes.
SECTION 10. TERMINATION
This Agreement may be terminated for any reason with respect to any party
hereto, at any time, by any party hereto upon the giving of one day's written
notice of such termination to the other parties hereto; provided, however, if
such terminating party is an Agent, such termination shall be effective only
with respect to such terminating party. If, at the time of a termination, an
offer to purchase any of the Notes has been accepted by the Company but the time
of delivery to the purchaser has not occurred, the provisions of this Agreement
shall remain in effect until such Notes are delivered. The provisions of
Sections 2(c), 3(c), 3(g), 3(h), 4, 7, 8 and 9 hereof shall survive any
termination of this Agreement.
SECTION 11. NOTICES
Except as otherwise provided herein, all notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Agents shall be directed to them as follows: Lehman Brothers Inc., 3 World
Financial Center, New York, New York 10285-1200, Attention: Medium Term Note
Department, 12th Floor, Telephone No.: (212) 526-2040, Telecopy No.: (212)
528-1718; Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167,
Attention: Medium-Term Note Department, Telephone No.: (212) 272-5371, Telecopy
No.: (212) 272-6227; CS First Boston Corporation, Park Avenue Plaza, New York,
New York 10055, Attention: Short and Medium-Term Finance Department, Telephone
No.: (212) 909-3842, Telecopy No.: (212) 318-1498; Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower,
10th Floor, New York, New York 10281-1310, Attention: MTN Product Management,
Telephone No.: (212) 449-7476, Telecopy No.: (212) 449-2234; notices to the
Company shall be directed to it as follows: H. F. Ahmanson & Company, 4900
Rivergrade Road, Irwindale, California 91706, Attention: Wholesale
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Funding Manager, Mail Code #2520, Building 515 C-2, Telephone No.: (818) 814-
7342, Telecopy No.: (818) 962-9679, provided, however, that the Agents agree
to use reasonable efforts to advise orally Charles R. Rinehart, Kevin M.
Twomey or George G. Gregory of the mailing or transmission of any such notice
concurrently with such mailing or transmission, but the failure to advise any
of the foregoing individuals of any such notice shall not invalidate such
notice.
SECTION 12. BINDING EFFECT; BENEFITS
This Agreement shall be binding upon each Agent, the Company, and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (a) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Agent within the meaning of Section 15 of the Act, and
(b) the indemnity agreement of the Agents contained in Section 7 hereof shall be
deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company. Nothing in this Agreement is intended or shall be construed to give
any persons other than the persons referred to in this Section, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
SECTION 13. GOVERNING LAW; COUNTERPARTS
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. This Agreement may be executed in counterparts
and the executed counterparts shall together constitute a single instrument.
-19-
20
SECTION 14. PARAGRAPH HEADINGS
The paragraph headings used in this Distribution Agreement are for
convenience of reference only, and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
H. F. AHMANSON & COMPANY
By:
-------------------------------------------------
CONFIRMED AND ACCEPTED
as of the date first above written:
LEHMAN BROTHERS INC.
By:
-------------------------------
BEAR, STEARNS & CO. INC.
By:
-------------------------------
CS FIRST BOSTON CORPORATION
By:
-------------------------------
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------
-20-
21
EXHIBIT A
H. F. AHMANSON & COMPANY
MEDIUM-TERM NOTES, SERIES A
SCHEDULE OF PAYMENTS
The Company agrees to pay each Agent a commission equal to the following
percentage of the aggregate U.S. dollar equivalent of the principal amount of
Notes sold by it:
TERM COMMISSION RATE
9 months to less than 12 months .125%
12 months to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .650%
20 years to 30 years .750%
More than 30 years Determined at time of issue
22
EXHIBIT B
H. F. AHMANSON & COMPANY
MEDIUM-TERM NOTES, SERIES A
ADMINISTRATIVE PROCEDURES
Medium-Term Notes, Series A, due nine months or more from date of
issue (the "Notes") are to be offered on a continuing basis by H. F. Ahmanson &
Company (the "Company"). Lehman Brothers Inc., Bear, Stearns & Co. Inc., CS
First Boston Corporation and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, as agents (each an "Agent" and collectively, the
"Agents", which shall include Lehman Government Securities Inc., an affiliate
of Lehman Brothers Inc.), have each agreed to use their reasonable efforts to
solicit offers to purchase the Notes. The Notes are being sold pursuant to a
Distribution Agreement between the Company and the Agents dated April 4, 1995
(as it may be supplemented or amended from time to time, the "Distribution
Agreement") to which these administrative procedures are attached as an
exhibit. The Notes will be issued under the Company's Indenture, dated as of
April 4, 1995, between the Company and Citibank, N.A., as trustee (the
"Trustee"). The Notes will rank equally with all other unsecured and
unsubordinated indebtedness of the Company and will have been registered with
the Securities and Exchange Commission (the "Commission"). Terms defined in the
Prospectus relating to the Notes (the "Prospectus," which term shall include
any Prospectus Supplement relating to the Notes and any Pricing Supplement
relating to an applicable Note) and in the Distribution Agreement shall have
the same meaning when used in this exhibit.
The Notes will be issued either (a) in certificated fully registered
form without coupons (each, a "Certificated Note") delivered to the purchaser
thereof or a person designated by such purchaser or (b) in book-entry form
(each, a "Book-Entry Note") represented by one or more fully registered global
Notes (each, a "Global Security") delivered to the Trustee, as custodian for
The Depository Trust Company ("DTC"), and recorded in the book-entry system
maintained by DTC. Owners of beneficial interests in Book- Entry Notes will not
be entitled to physical delivery of Certificated Notes equal in principal
amount to their respective beneficial interests.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Certificated Notes will be issued in accordance with the
procedures set forth in Part II. Book-Entry Notes will be issued in accordance
with the procedures set forth in Part III.
Administrative responsibilities, document control and record-keeping
functions to be performed by the Company will be performed by its Treasury
Operations Supervisor. Administrative procedures for the offering are explained
below.
PART I: PROCEDURES OF GENERAL APPLICABILITY
PRICE TO PUBLIC
Each Note will be issued at 100% of principal amount, unless otherwise
determined by the Company.
23
DATE OF ISSUANCE
Each Note will be dated and issued as of the date of its authentication
by the Trustee.
MATURITIES
Each Note will mature on a day at least nine months or more from the
date of issuance selected by the purchaser and agreed upon by the Company. Each
Floating Rate Note (as defined below) will mature on an Interest Payment Date
(as defined below).
REGISTRATION
Notes will be issued only in fully registered form as either a
Book-Entry Note or a Certificated Note.
INTEREST PAYMENTS
Each Note bearing interest at a fixed rate (a "Fixed Rate Note") will
bear interest from its issue date at the annual rate stated on the face
thereof, payable in the case of Fixed Rate Notes other than Amortizing Notes,
unless otherwise specified in an applicable Pricing Supplement, on June 15 and
December 15 of each year (each an "Interest Payment Date" with respect to such
Fixed Rate Note) and at Stated Maturity or upon redemption, if applicable.
Special provisions are set forth in the Prospectus relating to Notes
bearing interest at a rate or rates determined by reference to an interest rate
formula ("Floating Rate Notes") at a rate determined pursuant to the formula
stated on the face thereof, payable in arrears on such dates as are specified
therein (each an "Interest Payment Date" with respect to such Floating Rate
Note).
Unless otherwise specified in an applicable Pricing Supplement,
interest on Fixed Rate Notes will be calculated and paid on the basis of a
360-day year of twelve 30-day months. Unless otherwise specified in an
applicable Pricing Supplement, interest will be payable to the person in whose
name such Note is registered at the close of business on May 31 or November 30
(whether or not a Business Day) with respect to Fixed Rate Notes other than
Amortizing Notes (as hereinafter defined) or the fifteenth day (whether or not
a Business Day) next preceding an Interest Payment Date with respect to Fixed
Rate Amortizing Notes and Floating Rate Notes (the "Record Dates"); provided,
however, that interest payable at Stated Maturity will be payable to the person
to whom principal shall be payable. Payments of principal and interest on Notes
for which payments of principal and interest are made in equal installments
over the life of the security ("Amortizing Notes") will be made either
quarterly on each March 15, June 15, September 15 and December 15 or
semiannually on each June 15 and December 15 as set forth in the applicable
Pricing Supplement, and at maturity or upon earlier redemption or repayment.
Payments with respect to Amortizing Notes will be applied first to interest due
and payable thereon and then to the reduction of the unpaid principal amount
thereof. A table setting forth repayment information in respect of each
Amortizing Note will be provided to the original purchaser and will be
available, upon request, to subsequent Holders. Any payment of principal and
interest on any such Note required to be paid on an Interest Payment Date or at
Stated Maturity or upon redemption, if applicable,
B-2
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which is not a Business Day shall be postponed to the next day which is a
Business Day, except that in the case of a LIBOR Note, if such Business Day is
in the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day. The first payment of interest on any Note
originally issued between a Record Date and an Interest Payment Date will be
made on the Interest Payment Date following the next succeeding Record Date.
All interest payments (and, in the case of Amortizing Notes, principal
payments) excluding interest payments and, in the case of Amortizing Notes,
principal payments made at Stated Maturity or upon redemption, if applicable,
will be made by check mailed to the person entitled thereto as provided above,
or, at the option of the Company, by wire transfer of immediately available
funds to an account maintained by such person with a bank located in the United
States as designated by such person not less than 15 calendar days prior to the
applicable Interest Payment Date. Notwithstanding the foregoing, the holder of
$10 million or more in aggregate principal amount of Notes of like tenor and
terms with the same Interest Payment Date may request payment by wire transfer
if appropriate payment instructions have been received in writing by the Paying
Agent not less than 15 calendar days prior to the applicable Interest Payment
Date.
On the fifth Business Day immediately preceding each Interest Payment
Date, or, in the case of Floating Rate Notes when the amount is not
determinable on such date, as soon as practicable thereafter, the Trustee will
furnish the Company with the total amount of the interest payments and, in the
case of Amortizing Notes, principal payments, to be made on such Interest
Payment Date. The Trustee (or any duly selected paying agent) will provide
monthly to the Company's Treasury Operations Supervisor a list of the principal
and interest to be paid on Notes maturing in the next succeeding month. The
Company will provide to the Trustee not later than 9:00 A.M., Pacific time, on
the payment date sufficient moneys to pay in full all principal and interest
payments due on such payment date. The Trustee will assume responsibility for
withholding taxes on interest paid as required by law.
ACCEPTANCE AND REJECTION OF OFFERS
The Company shall have the sole right to accept offers to purchase
Notes and may reject any such offer in whole or in part. Each Agent shall
promptly communicate to the Company, orally or in writing, each reasonable
offer to purchase Notes from the Company received by it other than those
rejected by such Agent. Each Agent shall have the right, in its discretion
reasonably exercised without advising the Company, to reject any offers in
whole or in part.
SETTLEMENT
The receipt of immediately available funds in U.S. dollars by the
Company in payment for a Note (less the applicable commission) and the
authentication and issuance of such Note shall, with respect to such Note,
constitute "Settlement." All offers accepted by the Company will be settled
from one to five Business Days from the date of acceptance by the Company
pursuant to the timetable for Settlement set forth below unless the Company and
the purchaser agree to Settlement on a later date; provided, however, that the
Company will so notify the Trustee of any such later date on or before the
Business Day immediately prior to the Settlement date.
B-3
25
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Company and the Agents will discuss from time to time the rates to
be borne by the Notes that may be sold as a result of the solicitation of
offers by the Agents. Once any Agent has recorded any indication of interest in
Notes upon certain terms, and communicated with the Company, if the Company
accepts an offer to purchase Notes upon such terms, it will prepare a Pricing
Supplement in the form previously approved by the Agents, reflecting the terms
of such Notes and, after approval from the Presenting Agent (as defined below
under "Settlement Procedures"), will arrange to have such Pricing Supplement
(together with the Prospectus, if amended or supplemented) filed with the
Commission and will supply an appropriate number of copies of the Prospectus,
as then amended or supplemented, together with such Pricing Supplement, to the
Presenting Agent. See "Delivery of Prospectus" below. No settlements with
respect to Notes upon such terms may occur prior to such filing and the
Presenting Agent will not, prior to such filing, mail confirmations to
customers who have offered to purchase Notes upon such terms. After such
filing, sales, mailing of confirmations and settlements may occur with respect
to Notes upon such terms, subject to the provisions of "Delivery of Prospectus"
below.
If the Company decides to post rates and a decision has been reached
to change interest rates, the Company will promptly notify each Agent. Each
Agent will forthwith suspend solicitation of purchases. At that time, the
Agents will recommend and the Company will establish rates to be so "posted."
Following establishment of posted rates and prior to the filing described in
the following sentence, the Agents may only record indications of interest in
purchasing Notes at the posted rates. Once any Agent has recorded any
indication of interest in Notes at the posted rates and communicated with the
Company, if the Company accepts an offer at the posted rate, it will prepare a
Pricing Supplement reflecting such posted rates and, after approval from the
Presenting Agent, will arrange to have such Pricing Supplement (together with
the Prospectus if amended or supplemented) filed with the Commission and will
supply an appropriate number of copies of the Prospectus, as then amended or
supplemented, to the Presenting Agent. See "Delivery of Prospectus." No
settlements at the posted rates may occur prior to such filing and the
Presenting Agent will not, prior to such filing, mail confirmations to
customers who have offered to purchase Notes at the posted rates. After such
filing, sales, mailing of confirmations and settlements may resume, subject to
the provisions of "Delivery of Prospectus" below.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
In the event that at the time the Agents, at the direction of the
Company, suspend solicitation of offers to purchase from the Company there
shall be any orders outstanding which have not been settled, the Company will
promptly advise the Agents and the Trustee whether such orders may be settled
and whether copies of the Prospectus as theretofore amended and/or supplemented
as in effect at the time of the suspension may be delivered in connection with
the settlement of such orders. The Company will have the sole responsibility
for such decision and for any arrangements which may be made in the event that
the Company determines that such orders may not be settled or that copies of
such Prospectus may not be so delivered.
B-4
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DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or supplemented on
the date of delivery thereof, together with the applicable Pricing Supplement,
must be delivered to a purchaser prior to or together with the earlier of the
delivery by the Agents of (i) the written confirmation of a sale sent to a
purchaser or his agent and (ii) any Note purchased by such purchaser. The
Company shall ensure that the Presenting Agent receives copies of the
Prospectus and each amendment or supplement thereto (including the applicable
Pricing Supplement) in such quantities and within such time limits as will
enable the Presenting Agent to deliver such confirmation or Note to a purchaser
as contemplated by these procedures and in compliance with the preceding
sentence. Copies of Pricing Supplements should be delivered by 11:00 A.M. on
the Business Day following the applicable trade date by telecopy to (i) Lehman
Brothers Inc. c/o ADP Prospectus Services, 536 Broad Hollow Road, Melville, New
York 11747, Attention: Eric Johnson, Telephone No.: (516) 254-7106, Telecopy
No.: (516) 249-7942 and by hand to Lehman Brothers Inc., 3 World Financial
Center, 9th Floor, New York, New York 10285-0900, Attention: Brunie Vazquez,
Telephone No.: (212) 526-8400; (ii) Bear Stearns Securities Corporation, One
Metrotech Center North, 7th Floor Administration, Brooklyn, New York
11201-3859, Attention: Matthew Redshaw, Telecopy No.: (212) 272-1634; (iii) CS
First Boston Corporation, 5 World Trade Center, New York, New York 10048,
Attention: Joan Bryan, Telecopy No.: (212) 803-4096, with a copy for
record-keeping purposes to Short and Medium-Term Finance, Park Avenue Plaza, 55
East 52nd Street, New York, New York 10055, Attention: Robert W. Mitchell,
Telecopy No.: (212) 318-1498; or (iv) Merrill Lynch & Co. -- Tritech Services,
4 Corporate Place, Corporate Park 287, Piscataway, New Jersey 08854, Attention:
Prospectus Operations/Nachman Kimmerling, Telephone No.: (908) 885-2769,
Telecopy No.: (908) 885-2774/2775/2776; also, for record keeping purposes, send
a copy to: Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Merrill Lynch World Headquarters, World Financial Center, North
Tower, 10th Floor, New York, New York 10281-1310, Attention: MTN Product
Management and to Citibank, N.A., 111 Wall Street, New York, New York 10043,
MTN Unit, Attention: Sharon Nixon and to Citibank, N.A., 120 Wall Street, 13th
Floor, New York, New York 10043, Attention: Corporate Administration, Reynaldo
Duma. If, since the date of acceptance of a purchaser's offer, the Prospectus
shall have been supplemented solely to reflect any sale of Notes on terms
different from those agreed to between the Company and such purchaser or a
change in posted rates not applicable to such purchaser, such purchaser shall
not receive the Prospectus as supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect the terms of the Notes being
purchased by such purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the Prospectus. The Company will make
all such deliveries with respect to all Notes sold directly by the Company.
REDEMPTION AND REPAYMENT
Unless one or more Redemption Dates are specified in the applicable
Pricing Supplement, the Notes will not be redeemable prior to their Stated
Maturity. If one or more Redemption Dates are so specified with respect to any
Note, the applicable Pricing Supplement will also specify one or more
redemption prices (expressed as a percentage of the principal amount of such
Note) ("Redemption Prices") and the redemption period or periods ("Redemption
Periods") during which such Redemption Prices shall apply. Unless otherwise
specified in the Pricing Supplement, any such Note shall be redeemable at the
option of the Company at the specified Redemption Price applicable to the
Redemption Period during which such Note is to be redeemed, together with
interest accrued to the Redemption Date. Unless otherwise specified in the
applicable Pricing Supplement, the Notes will not be subject to any sinking
fund. The
B-5
27
Company may redeem any of the Notes that are redeemable and remain outstanding
either in whole or from time to time in part, upon not less than 30 nor more
than 60 days' notice. In the event of a redemption in part of any Note, a new
Note for the amount of the unredeemed portion shall be issued in the name of
the Holder upon cancellation of the redeemed Note.
The Pricing Supplement relating to each Note will indicate either that
such Note cannot be repaid prior to Stated Maturity or that such Note will be
repayable at the option of the holder on a date or dates specified prior to
Stated Maturity at a price or prices set forth in the applicable Pricing
Supplement, together with accrued interest to the date of repayment.
In order for a Note that is subject to repayment at the option of the
Holder to be repaid, the Trustee must receive at least 30 days but not more
than 60 days prior to the repayment date (a) appropriate wire instructions and
(b) the Note with the form entitled "Option to Elect Repayment" attached to the
Note duly completed. Exercise of the repayment option by the Holder of a Note
shall be irrevocable, except as otherwise described under "Interest Rate Reset"
and "Extendible Notes" in the Prospectus Supplement. The repayment option may
be exercised by the Holder of a Note for less than the entire principal amount
of the Note provided that the principal amount of the Note remaining
outstanding after repayment is an authorized denomination. No transfer or
exchange of any Note (or, in the event that any Note is to be repaid in part,
the portion of the Note to be repaid) will be permitted after exercise of a
repayment option. All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Note for repayment will be determined by the
Company, whose determination will be final, binding and non-appealable.
If a Note is represented by a Global Security, the Depositary's
nominee will be the Holder of such Note and therefore will be the only entity
that can exercise a right to repayment. In order to ensure that the
Depositary's nominee will timely exercise a right to repayment with respect to
a particular Note, the beneficial owner of such Note must instruct the broker
or other direct or indirect participant through which it holds an interest in
such Note to notify the Depositary of its desire to exercise a right to
repayment. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner
should consult the broker or other direct or indirect participant through which
it holds an interest in a Note in order to ascertain the cut-off time by which
such an instruction must be given in order for timely notice to be delivered to
the Depositary.
Unless otherwise specified in the applicable Pricing Supplement, if a
Note is an Original Issue Discount Note, the amount payable on such Note in the
event of redemption or repayment prior to its Stated Maturity shall be the
Amortized Face Amount of such Note, as specified in the applicable Pricing
Supplement, as of the Redemption Date or the date of repayment, as the case may
be.
AUTHENTICITY OF SIGNATURES
The Company will cause the Trustee to furnish the Agents from time to
time with the specimen signatures of each of the Trustee's officers, employees
and agents who have been authorized by the Trustee to authenticate Notes, but
the Agents will have no obligation or liability to the Company or the Trustee
in respect of the authenticity of the signature of any officer, employee or
agent of the Company or the Trustee on any Note.
B-6
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ADVERTISING COSTS
The Company will determine with the Agents the amount and nature of
advertising that may be appropriate in offering the Notes. Advertising expenses
incurred with the consent of the Company will be paid by the Company.
BUSINESS DAY
"Business Day" shall mean any Monday, Tuesday, Wednesday, Thursday or
Friday that in The City of New York is not a day on which banking institutions
are authorized or required by law, regulation or executive order to close and,
with respect to Notes as to which LIBOR is an applicable Base Rate, is also a
London Business Day. As used herein, "London Business Day" means any day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
PART II: PROCEDURES FOR CERTIFICATED NOTES
CURRENCY
Certificated Notes will be denominated in U.S. dollars.
IDENTIFICATION NUMBERS
The Company will arrange, on or prior to commencement of a program for
the offering of Certificated Notes, with the CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP Service Bureau") for the reservation of a series
of CUSIP numbers, consisting of approximately 900 CUSIP numbers and relating to
Certificated Notes. The Company will obtain a written list of such series of
reserved CUSIP numbers and will deliver to the Trustee such written list of 900
CUSIP numbers of such series. The Trustee, on the advice of the Company, will
assign CUSIP numbers to Certificated Notes as described below under Settlement
Procedure "B."
REGISTRATION
Certificated Notes may be presented for registration of transfer or
exchange at the Trustee's Office at 111 Wall Street, 5th Floor, New York, New
York 10043.
DENOMINATIONS
Except as provided in the applicable Pricing Supplement, Certificated
Notes will be issued and payable in U.S. dollars in the denomination of $1,000
and any larger denomination which is an integral multiple of $1,000.
B-7
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MATURITY
Upon presentation of each Certificated Note at Maturity the Trustee
(or any duly appointed Paying Agent) will pay the principal amount thereof,
together with accrued interest due at maturity. Such payment shall be made in
immediately available funds in U.S. dollars, provided that the Certificated
Note is presented to the Trustee (or any such Paying Agent) in time for the
Trustee (or such Paying Agent) to make payments in such funds in accordance
with its normal procedures. The Company will provide the Trustee (and any such
Paying Agent) with funds available for immediate use for such purpose in
accordance with the Indenture. Certificated Notes presented at Maturity will be
cancelled by the Trustee as provided in the Indenture.
SETTLEMENT PROCEDURES
In the event of a purchase of Certificated Notes by an Agent, as
principal, appropriate Settlement details will be as set forth below unless
such details are set forth in the applicable Purchase Agreement to be entered
into between such Agent and the Company pursuant to the Distribution Agreement.
Other than as contemplated above, settlement procedures with regard to
each Certificated Note sold through each Agent shall be as follows:
A. Such Agent (the "Presenting Agent") will advise the Company by
telephone, telex or facsimile, of the following Settlement information:
1. Exact name in which the Note is to be registered
("Registered Owner").
2. Exact address of the Registered Owner and address for
payment of principal and interest, if any.
3. Taxpayer identification number of the Registered
Owner.
4. Principal amount of the Note (and, if multiple Notes
are to be issued, denominations thereof).
5. Settlement date.
6. Stated Maturity and, if the Company has the option to
extend the Stated Maturity, the Extension Periods and
the Final Maturity Date.
7. Issue Price and any OID information.
8. Trade Date/Original Issue Date.
9. If such Note is a Fixed Rate Note, whether such Note
is an Amortizing Note.
10. Interest rate (including, if appropriate, such
interest rate information applicable to any Extension
Period):
B-8
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(a) Fixed Rate Certificated Notes:
(i) interest rate
(ii) interest payment dates, if other than as specified
under "Interest Payments" above
(iii) overdue rate, if any
(b) Floating Rate Certificated Notes:
(i) interest rate basis
(ii) initial interest rate
(iii) spread or spread multiplier, if any
(iv) date or dates, if any, on which the spread or
spread multiplier may be reset and the basis or
formula, if any, for such resetting
(v) interest rate reset periods
(vi) interest payment dates
(vii) index maturity
(viii) maximum and minimum interest rates, if any
(ix) record dates
(x) interest determination dates
(xi) overdue rate, if any
11. The date on or after which the Certificated Notes are
redeemable at the option of the Company or are to be repaid at
the option of the Holder, and additional redemption or
repurchase provisions, if any.
12. Wire transfer information.
13. Presenting Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the Company upon
Settlement).
14. That the Note will be a Certificated Note.
B. The Company will confirm the above Settlement information to the
Trustee by telephone and telex or facsimile, and the Trustee will assign a
CUSIP number to the transaction. If the Company rejects an offer, the Company
will promptly notify the Presenting Agent and the Trustee by telephone.
C. The Trustee will complete the first page of the preprinted 4-ply
Certificated Note packet, the form of which was previously approved by the
Company, the Agents and the Trustee.
D. The Trustee will deliver the Certificated Note (with the attached
white confirmation) and the yellow and blue stubs to the Presenting Agent at
one of the following addresses: (i) Lehman Government Securities Inc., 101
Hudson Street, 29th Floor, Jersey City, New Jersey 07302, Attention: Eddie
Steffens; (ii) Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York
10167, Attention: Matthew Redshaw; (iii) CS First Boston Corporation, 5 World
Trade Center, New York, New York 10048, Attention: Paul Riley; or (iv) Merrill
Lynch Money Markets Clearance, 55 Water Street, Concourse Level, N.S.C.C.
Window, New York, New York 10041, Attention: Al Mitchell, Telephone No.: (212)
B-9
31
558-2405, Telecopy No.: (212) 558-2457. The Presenting Agent will acknowledge
receipt of the Certificated Note by completing the yellow stub and returning it
to the Trustee.
E. The Presenting Agent will cause to be wire transferred to a bank
account designated by the Company immediately available funds in U.S. dollars
in the amount of the principal amount of the Certificated Note, less the
applicable commission or discount, if any.
F. The Presenting Agent will deliver the Certificated Note (with the
white confirmation) to the purchaser against payment in immediately available
funds in the amount of the principal amount of the Certificated Note. The
Presenting Agent will deliver to the purchaser a copy of the most recent
Prospectus applicable to the Certificated Note with or prior to any written
offer of Certificated Notes, delivery of the Certificated Note and the
confirmation and payment by the purchaser for the Certificated Note.
G. The Presenting Agent will obtain the acknowledgment of receipt for
the Certificated Note and Prospectus by the purchaser through the purchaser's
completion of the blue stub.
H. The Trustee will mail the pink stub to the Company's Treasury
Operations Supervisor at H. F. Ahmanson & Company, Treasury Operations, Mail
Code # 2520, Building 515 C-2, 4900 Rivergrade Road, Irwindale, California
91706.
SETTLEMENT PROCEDURES TABLE
For offers to purchase Certificated Notes accepted by the Company,
Settlement procedures "A" through "H" set forth above shall be completed on or
before the respective times set forth below:
SETTLEMENT PROCEDURE TIME (NEW YORK)
===============================================================================
A 5 PM on the Trade Date
-------------------------------------------------------------------------------
B 12 Noon, two Business Days prior to Settlement Date
-------------------------------------------------------------------------------
C-D 12 Noon on the Settlement Date
-------------------------------------------------------------------------------
E 2:15 PM on the Settlement Date
-------------------------------------------------------------------------------
F-G 3 PM on the Settlement Date
-------------------------------------------------------------------------------
H 5 PM on the Business Day after the Settlement Date
================================================================================
FAILS
In the event that a purchaser of a Certificated Note shall either fail to
accept delivery of or make payment for such Certificated Note on the date fixed
by the Company for Settlement, the Presenting Agent will immediately notify the
Trustee and the Company's Wholesale Funding Manager by telephone,
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confirmed in writing, of such failure and return the Certificated Note to the
Trustee. Upon the Trustee's receipt of the Certificated Note from the
Presenting Agent, the Company will promptly return to the Presenting Agent an
amount of immediately available funds in U.S. dollars equal to any amount
previously transferred to the Company in respect of the Certificated Note
pursuant to advances made by the Agent. Such returns will be made on the
Settlement Date, if possible, and in any event not later than 12 noon (New York
City time) on the Business Day following the Settlement Date. The Company will
reimburse the Presenting Agent on an equitable basis for its loss of the use of
the funds during the period when the funds were credited to the account of the
Company. Upon receipt of the Certificated Note in respect of which the default
occurred, the Trustee will mark the Certificated Note "cancelled," make
appropriate entries in its records and deliver the Certificated Note to the
Company with an appropriate debit advice. The Presenting Agent will not be
entitled to any commission with respect to any Certificated Note which the
purchaser does not accept or make payment for.
PART III: SPECIAL ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform or cause to be performed the custodial, document control and
administrative functions described below, in accordance with its respective
obligations under a Letter of Representations from the Company and the Trustee
to DTC and a Medium- Term Note Certificate Agreement previously entered into
between the Trustee and DTC, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS"). Except as otherwise
set forth in this Exhibit B, Book-Entry Notes will be issued in accordance with
the administrative procedures set forth below.
ISSUANCE
On any date of settlement (as defined under "Settlement" below) for one
or more Fixed Rate Book-Entry Notes, the Company will issue a single Global
Security in fully registered form without coupons representing up to
$200,000,000 principal amount of all of such Notes that have the same original
issuance date, interest rate, redemption or repayment provisions and Stated
Maturity. Similarly, on any settlement date for one or more Floating Rate
Book-Entry Notes, the Company will issue a single Global Security representing
up to $200,000,000 principal amount of all of such Notes that have the same
interest rate formula, original issuance date, Initial Interest Rate, Interest
Payment Dates, Index Maturity, Spread, Spread Multiplier, minimum interest rate
(if any), maximum interest rate (if any), redemption or repayment provisions
and Stated Maturity. Each Global Security will be dated and issued as of the
date of its authentication by the Trustee. Each Global Security will have an
interest accrual date (the "Interest Accrual Date"), which will be (i) with
respect to an original Global Security (or any portion thereof), its original
issuance date and (ii) with respect to any Global Security (or 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. No Global Security will represent (i) both Fixed Rate and Floating
Rate Book-Entry Notes or (ii) any Certificated Note.
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IDENTIFICATION NUMBERS
The Company will arrange, on or prior to commencement of a program for
the offering of Book-Entry Notes, with the CUSIP Service Bureau for the
reservation of a series of CUSIP numbers (including tranche numbers),
consisting of approximately 900 CUSIP numbers and relating to Global Securities
representing the Book-Entry Notes. The Company will obtain a written list of
such series of reserved CUSIP numbers and will deliver to the Trustee and DTC
such written list of 900 CUSIP numbers of such series. The Trustee, on the
advice of the Company, will assign CUSIP numbers to Global Securities as
described below under Settlement Procedure "B." DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the Trustee has assigned
to Global Securities. When fewer than 100 of the reserved CUSIP numbers remain
unassigned to Global Securities, 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 such additional CUSIP numbers to the Trustee and DTC.
REGISTRATION
Each Global Security will be registered in the name of Cede & Co., as
nominee for DTC, on the Securities Register maintained under the Indenture
governing such Global Security. The beneficial owner of a Book-Entry Note (or
one or more indirect participants in DTC designated by such owner) will
designate one or more participants in DTC with respect to such Book-Entry Note
(the "Participants") to act as agent or agents for such owner in connection
with the book-entry system maintained by DTC, and DTC will record in book-entry
form, in accordance with instructions provided by such Participants, a credit
balance with respect to such Book-Entry Note in the account of such
Participants. The ownership interest of such beneficial owner in such
Book-Entry 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.
VOTING
In the event of any solicitation of consents from or voting by holders of
the Book-Entry Notes, the Company or the Trustee shall establish a record date
for such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date.
TRANSFERS
Transfers of a Book-Entry Note will be accomplished by book entries made
by DTC and, in turn, by Participants (and in certain cases, one or more
indirect participants in DTC ) acting on behalf of beneficial transferors and
transferees of such Book-Entry Note.
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CONSOLIDATION AND EXCHANGE
The Trustee 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 (A) Fixed Rate Book-Entry Notes
having the same original issuance date, interest rate, redemption and repayment
provisions and Stated Maturity and with respect to which interest has been paid
to the same date or (B) Floating Rate Book-Entry Notes having the same interest
rate formula, original issuance date, Initial Interest Rate, Interest Payment
Dates, Index Maturity, Spread or Spread Multiplier, minimum interest rate (if
any), maximum interest rate (if any), redemption and repayment provisions and
with respect to 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, obtained from the
Company, to be assigned to such replacement Global Security. Upon receipt of
such a notice, DTC will send to its Participants (including the Trustee) a
written reorganization notice to the effect that such exchange will occur on
such date. Prior to the specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau a written notice setting forth such exchange date and
the new CUSIP number and stating that, as of such exchange date, the CUSIP
numbers of the Global Securities to be exchanged will no longer be valid. On
the specified exchange date, the Trustee will exchange such Global Securities
for a single Global Security bearing the new CUSIP number and a new Interest
Accrual Date, and the CUSIP numbers of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing, if the Global Securities
to be exchanged exceed $200,000,000 in aggregate principal amount, one Global
Security will be authenticated and issued to represent each $200,000,000 of
principal amount of the exchanged Global Securities and an additional Global
Security will be authenticated and issued to represent any remaining principal
amount of such global Securities (see "Denominations" below).
NOTICE OF REDEMPTION AND REPAYMENT DATES
The Trustee will give notice to DTC prior to each redemption date or
repayment date (as specified in the Book-Entry 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 $1,000 or any
amount in excess thereof that is an integral multiple of $1,000. Global
Securities representing one or more Book-Entry Notes will be denominated in
principal amounts not in excess of $200,000,000. If one or more Book-Entry
Notes having an aggregate principal amount in excess of $200,000,000 would, but
for the preceding sentence, be represented by a single Global Security, then
one Global Security will be issued to represent each $200,000,000 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.
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INTEREST
General. Interest on each Book-Entry Note will accrue from the date of
issue of the Global Security representing such Note or from and including the
last date in respect of which interest has been paid or duly provided for. Each
payment of interest on a Book-Entry Note will include interest accrued up to,
but not including, the Interest Payment Date or the date of Maturity,
redemption or repayment; provided, however, that if the Interest Reset Dates
with respect to any such Note are daily or weekly, interest payable on any
Interest Payment Date, other than interest payable on any date on which
principal for such Note is payable, will include interest accrued from the date
of issue of the Global Security, or from and including the last Interest
Payment Date as the case may be, to and including the regular record date
immediately preceding the applicable Interest Payment Date except that at the
Stated Maturity the interest payments will include accrued interest from and
including the date of issue, or from and including the last day in respect of
which interest has been paid or duly provided for, as the case may be, to, but
excluding, the Stated Maturity. Interest payable at the Maturity or upon
earlier redemption or repayment of a Book-Entry Note will be payable to the
Person to whom the principal of such Note is payable. Standard & Poor's
Corporation will use the information received in the pending deposit message
described under Settlement Procedure "C" below in order to include the amount
of any interest payable and certain other information regarding the related
Global Security in the appropriate weekly bond report published by Standard &
Poor's Corporation.
Floating Rate Note Notices. On the first Business Day of January, April,
July and October of each year, the Trustee will deliver to the Company and DTC
a written list of Regular Record Dates and Interest Payment Dates that will
occur with respect to Floating Rate Book-Entry Notes during the six-month
period beginning on such first Business Day. Promptly after each Interest
Determination Date (as defined in Appendix A hereto) for Floating Rate Notes,
the Company will notify the Trustee, and the Trustee in turn will notify
Standard & Poor's Corporation, of the interest rates determined on such
Interest Determination Date.
PAYMENTS OF PRINCIPAL AND INTEREST
Payments of Interest Only. Promptly after each Regular Record Date, the
Trustee 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 on the
following Interest Payment Date (other than an Interest Payment Date coinciding
with Maturity or an earlier redemption or repayment date) and the total of such
amounts. DTC will confirm the amount payable on each Global Security on such
Interest Payment Date by reference to the daily bond reports published by
Standard & Poor's Corporation. The Company will pay to the Trustee, as paying
agent, the total amount of interest due on such Interest Payment Date (other
than at Maturity), and the Trustee will pay such amount to DTC at the times and
in the manner set forth below under "Manner of Payment." Promptly after each
Interest Determination Date for Floating Rate Book-Entry Notes, the Calculation
Agent will notify the Trustee, Standard & Poor's Corporation and the Company of
the interest rates determined on such Interest Determination Date.
Payments at Maturity or Upon Redemption or Repayment. On or about the
second Business Day of each month, the Trustee will deliver to the Company and
DTC a written list of principal and interest to be paid on each Global Security
maturing either at maturity or any redemption or repayment date in the
following month. The Company, the Trustee 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
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preceding the Maturity or redemption or repayment date of such Global Security.
The Company will pay to the Trustee, as the paying agent, the principal amount
of such Global Security, together with interest due at such Maturity or
redemption or repayment date, as the case may be. The Trustee will pay such
amount to DTC at the times and in the manner set forth below under "Manner of
Payment."
Promptly after payment to DTC of the principal and interest due at the
Maturity of such Global Security, the Trustee will cancel such Global Security
and deliver it to the Company with an appropriate debit advice. On the first
Business Day of each month, the Trustee will prepare a written statement
indicating the total principal amount of Outstanding Global Securities for
which it serves as paying agent as of the immediately preceding Business Day.
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 or repayment shall be paid by the Company to the Trustee in funds
available for use by the Trustee as of 9:30 A.M. (New York City time) or in any
event not later than 12:00 noon (New York City time) on such date. The Company
will make such payment on such Global Securities by instructing the Trustee to
withdraw funds from an account maintained by the Company at the Trustee. For
maturity, redemption or any other principal payments: prior to 10 A.M. (New
York City time) on such date or as soon as possible thereafter, the Trustee
will make such payments to DTC in same day funds in accordance with DTC's Same
Day Funds Settlement Paying Agent Operating Procedures. For interest payments:
the Trustee will make such payments to DTC in accordance with existing
arrangements between DTC and the Trustee. DTC will allocate such payments to
its Participants in accordance with its existing operating procedures. Neither
the Company, the Trustee (as Trustee or as Paying Agent nor any other Paying
Agent) shall have any direct 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 and materials directly to the
beneficial owner of such Note.
SETTLEMENT PROCEDURES
In the event of a purchase of Book-Entry Notes by an Agent, as principal,
Settlement details will be as set forth below unless such details are set forth
in the applicable Purchase Agreement to be entered into between such Agent and
the Company pursuant to the Distribution Agreement.
Other than as contemplated above, settlement procedures with regard to
each Book-Entry Note sold by the Company through an Agent, as agent, shall be
as follows:
A. The Presenting Agent will advise the Company by telephone, telex or
facsimile, of the following settlement information:
1. Principal amount of the Book-Entry Note (and, if multiple
Notes are to be issued, denominations thereof).
2. Settlement date.
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3. Stated Maturity and, if the Company has the option to extend
the Stated Maturity, the Extension Periods and the Final
Maturity Date.
4. Earliest Redemption Date, Redemption Price and other
redemption provisions, if any.
5. Issue Price and any OID information.
6. Trade date.
7. If such Book-Entry Note is a Fixed Rate Note, whether such
Note is an Amortizing Note.
8. The DTC Participant account number of such Agent.
9. Interest rate (including, if appropriate, such interest rate
information applicable to any Extension Period):
(a) Fixed Rate Notes:
(i) interest rate
(ii) interest payment dates, if other than as specified
under "Interest Payments" above
(iii) overdue rate, if any
(b) Floating Rate Notes:
(i) interest rate basis
(ii) initial interest rate
(iii) spread or spread multiplier, if any
(iv) date or dates, if any, on which the spread or
spread multiplier may be reset and the basis or
formula, if any, for such resetting
(v) interest rate reset periods
(vi) interest payment dates
(vii) index maturity
(viii) maximum and minimum interest rates, if any
(ix) record dates
(x) interest determination dates
(xi) overdue rate, if any
10. The date on or after which the Book-Entry Notes are redeemable
at the option of the Company or are to be repaid at the option
of the Holder, and additional redemption or repurchase
provisions, if any.
11. Wire transfer information.
12. Presenting Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the Company upon
settlement).
13. That the Note will be a Book-Entry Note.
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B. On advice from the Company, the Trustee will assign a CUSIP number
to the Global Security representing such Note. The Company will advise the
Trustee by telephone (confirmed in writing at any time on the same date) or
electronic transmission of the information set forth in Settlement Procedure
"A" above, and the name of such Agent.
C. The Trustee will enter a pending deposit message through DTC's
Participant Terminal System, providing the following settlement information to
DTC, the Presenting Agent and Standard & Poor's Corporation:
1. The information set forth in Settlement Procedure "A."
2. Identification as a Fixed Rate Book-Entry Note or a Floating
Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note, number of days by
which such date succeeds the related "DTC Record Date" (which
term means the Regular Record Date except in the case of
floating rate notes which reset daily or weekly in which case
it means the date 5 calendar days immediately preceding the
Interest Payment Date) and amount of interest payable on such
Interest Payment Date.
4. Frequency of interest payments (monthly, semiannually,
quarterly, etc.).
5. CUSIP number of the Global Security representing such
Book-Entry Note.
6. Whether such Global Security will represent any other
Book-Entry Note (to the extent known at such time).
7. The number of Participant accounts to be maintained by DTC on
behalf of the Agents or the Trustee.
The Company will deliver to the Trustee a Global Security to represent
such Book-Entry Note, in a form that has been approved by the Company, the
Presenting Agent and the Trustee.
D. The Trustee will complete and authenticate the note certificate
evidencing the Global Security representing such Book- Entry Note.
E. DTC will credit such Book-Entry Note to the Trustee's participant
account at DTC.
F. The Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such Book-Entry Note
to the Trustee's participant account and credit such Note to the Presenting
Agent's participant account and (ii) debit the Presenting Agent's settlement
account and credit the Trustee's settlement account for an amount equal to the
price of such Book-Entry Note less the Presenting Agent's commission.
G. The Presenting Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such Book-Entry Note
to the Presenting Agent's participant account and credit such Note to the
participant accounts of the Participants with respect to such Book-Entry Note
and (ii) to debit the settlement accounts of such Participants and credit the
settlement account of the Presenting Agent for an amount equal to the price of
such Note.
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H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. The Trustee will credit to an account of the Company maintained at
the Trustee funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure "F."
J. The Presenting Agent will deliver to the purchaser a copy of the
most recent Prospectus applicable to the Book-Entry Note with or prior to any
written offer of Book-Entry Notes and the confirmation and payment by the
purchaser of the Book-Entry Note.
The Presenting Agent will confirm the purchase of such Book-Entry Note to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Note a confirmation order or orders through DTC's institutional
delivery system or by mailing a written confirmation to such purchaser.
SETTLEMENT PROCEDURES TIMETABLE
For offers to purchase Book-Entry Notes solicited by an Agent, as agent,
and accepted by the Company for settlement, 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 PROCEDURES TIME
-------------------------------------------------------------------
A-B 11:00 A.M. on the Sale date
-------------------------------------------------------------------
C 2:00 P.M. on the Sale date
-------------------------------------------------------------------
D 3:00 P.M. on date before 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., 11:00 A.M. and 2:00 P.M., as the case
may be, on the first Business Day after the sale date. If the initial interest
rate for a Floating Rate Book-Entry Note has not been determined at the time
that Settlement Procedure "A" is completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has been determined but not later than
11:00 A.M. and 12:00 Noon, respectively, on the second Business Day before the
settlement date. Settlement Procedure "I" 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.
B-18
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If settlement of a Book-Entry Note is rescheduled or canceled, the
Trustee will deliver to DTC, through DTC's Participant Terminal System, a
cancellation message to such effect by no later than 2:00 P.M. on the Business
day immediately preceding the scheduled Settlement date.
FAILURE TO SETTLE
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Note pursuant to Settlement Procedure "F," the Trustee may deliver
to DTC, through DTC's Participant Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such Book-Entry Note to the
Trustee's participant account. DTC will process the withdrawal message,
provided that the Trustee's participant account contains a principal amount to
be debited. If a withdrawal message is processed with respect to all the
Book-Entry Notes represented by a Global Security, the Trustee will mark such
Global Security "canceled," make appropriate entries in the Trustee's records
and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry Notes
represented by a Global Security, the Trustee will exchange such Global
Security for two Global Securities, one of which shall represent such
Book-Entry Note or Notes and shall be canceled immediately after issuance and
the other of which shall represent the other 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 Book-Entry 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 for such
Book-Entry Note may enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered pursuant to Settlement Procedures
"F" and "G," respectively. Thereafter, the Trustee will deliver the withdrawal
message and take the related actions described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to settle with respect to
a Book-Entry Note, DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Security, the Trustee will provide, in accordance with
Settlement Procedure "D," for the authentication and issuance of a Global
Security representing the other Book-Entry Notes to have been represented by
such Global Security and will make appropriate entries in its records.
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EXHIBIT C
PURCHASE AGREEMENT
H. F. AHMANSON & COMPANY [DATE]
4900 Rivergrade Road
Irwindale, California 91706
Attention: Chief Financial Officer
The undersigned agrees to purchase the following principal amount of the
Notes described in the Distribution Agreement dated April 4, 1995 (as it may be
supplemented or amended from time to time, the "Distribution Agreement"):
PRINCIPAL AMOUNT: $__________
INTEREST RATE: ____%
DISCOUNT: ____% of Principal Amount
AGGREGATE PRICE TO BE PAID TO COMPANY (IN $__________
IMMEDIATELY AVAILABLE FUNDS):
SETTLEMENT DATE:
OTHER TERMS:
Terms defined in the Prospectus relating to the Notes and in the
Distribution Agreement shall have the same meaning when used herein.
Our obligation to purchase Notes hereunder is subject to the continued
accuracy of your representations and warranties contained in the Distribution
Agreement and to your performance and observance of all applicable covenants
and agreements contained therein, including, without limitation, your
obligations pursuant to Section 7 thereof. Our obligation hereunder is subject
to the further condition that we shall receive (a) the opinion required to be
delivered pursuant to Section 5(e) of the Distribution Agreement, (b) the
certificate required to be delivered pursuant to Section 5(f) of the
Distribution Agreement, (c) the letter referred to in Section 5(g) of the
Distribution Agreement in each case dated as of the above Settlement Date and
(d) [insert other conditions as appropriate].
In further consideration of our agreement hereunder, you agree that
between the date hereof and the above Settlement Date, you will not, without
our prior consent, offer or sell, or enter into any agreement to sell, any debt
securities substantially similar to the Notes to be sold hereby, other than the
Notes which are to be sold hereby and commercial paper, securities sold under
agreements to repurchase and borrowings under bank lines of credit in the
ordinary course of business.
We may terminate this Agreement, immediately upon notice to you, at any
time prior to the Settlement Date, if prior thereto there shall have occurred:
(i) any change, or any development involving a prospective change, in or
affecting particularly the business or properties of the Company or its
subsidiaries which, in our judgment, materially impairs the investment quality
of the Notes; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act);
42
(iii) neither Standard and Poor's Corporation nor Moody's Investors Service,
Inc. shall have publicly announced that it has under surveillance or review,
with possible negative implications, its ratings of any of the Company's debt
securities or preferred stock; (iv) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market;
(v) a general moratorium on commercial banking activities in New York or
California declared by either Federal or applicable state authorities; or (vi)
the outbreak or escalation of major hostilities involving the United States or
the declaration by the United States of a national emergency or war, if the
effect of any such event specified in Clauses (i) or (vi) in our judgment makes
it impracticable to proceed with the solicitation of offers to purchase Notes or
the purchase of Notes from the Company as principal pursuant to this Purchase
Agreement, as the case may be, or you are unable to provide any of the opinions,
certificates or letters referred to in the second preceding paragraph. In the
event of such termination, no party shall have any liability to the other party
hereto, except as provided in Sections 4, 7 and 13 of the Distribution
Agreement.
This Agreement shall be governed by and construed in accordance with the
laws of New York.
[INSERT NAME[S] OF AGENT[S]]
By:________________________________
[Title]
ACCEPTED: ,
H. F. AHMANSON & COMPANY
By:_________________________________
[Authorized Signatory]
C-2