EXHIBIT 1.1
EXECUTION COPY
CSX Corporation
Medium-Term Notes Series B Due From
Nine Months or Longer from Date of Issue
DISTRIBUTION AGREEMENT
April 22, 1998
Chase Securities Inc.
270 Park Ave.
New York, NY 10017
BancAmerica Robertson Stephens
231 South LaSalle Street, 18/th/ floor
Chicago, IL 60697
Credit Suisse First Boston Corporation
Eleven Madison Ave.
New York, NY 10010-3629
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Lehman Brothers Inc.
3 World Financial Center
New York, NY 10285
Merrill Lynch & Co.
World Financial Center; North Tower
New York, NY 10281-1310
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
NationsBanc Montgomery Securities LLC
100 North Tryon Street
Charlotte, NC 28255
NC1007-07-01
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
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Ladies and Gentlemen:
CSX Corporation, a Virginia corporation (the "Company"), confirms its
agreement with Chase Securities Inc., BancAmerica Robertson Stephens, Credit
Suisse First Boston Corporation, Goldman, Sachs & Co., Lehman Brothers Inc.,
Merrill Lynch & Co., Morgan Stanley & Co. Incorporated, NationsBanc Montgomery
Securities LLC and Salomon Brothers Inc (the "Agents") with respect to the issue
and sale by the Company of its Medium-Term Notes Series B described herein (the
"Notes"). The Notes are to be issued pursuant to an Indenture dated as of
August 1, 1990 between the Company and The Chase Manhattan Bank, as trustee (the
"Trustee") as supplemented by a First Supplemental Indenture dated as of June
15, 1991, a Second Supplemental Indenture dated as of May 6, 1997 and a Third
Supplemental Indenture dated as of April 22, 1998 (as supplemented, the
"Indenture"). As of the date hereof, the Company has authorized the issuance
and sale of up to U.S. $248,000,000 aggregate initial offering price (or its
equivalent, based upon the applicable exchange rate at the time of issuance, in
such foreign currencies or units of two or more currencies as the Company shall
designate at the time of issuance) of Notes through the Agents pursuant to the
terms of this Agreement. It is understood, however, that the Company may from
time to time authorize the issuance of additional Notes and that such additional
Notes may be sold through or to one or more of the Agents pursuant to the terms
of this Agreement, all as though the issuance of such Notes were authorized as
of the date hereof.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers, in which case the Agents will act as agents of the
Company in soliciting Note purchasers, and (as may from time to time be agreed
to by the Company and an Agent) to an Agent as principal for resale to
purchasers. In addition, the Company reserves the right to sell Notes directly
to investors, and solicit and accept offers to purchase Notes directly from
investors from time to time on its own behalf.
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement (No. 33-41236) and a registration statement (No.
33-48841), both on Form S-3 for the registration of debt securities, including
the Notes, warrants to purchase debt securities and currency warrants, under the
Securities Act of 1933, as amended (the "1933 Act") and the offering thereof
from time to time in accordance with Rule 415 of the rules and regulations of
the SEC under the 1933 Act (the "1933 Act Regulations"). Such registration
statements have been declared effective by the SEC and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
Such registration statements (and any further registration statements which may
be filed by the Company for the purpose of registering additional Notes and in
connection with which this Agreement is included as an exhibit) and the
prospectus constituting a part of Registration Statement No. 33-48841, and any
prospectus supplement relating to the Notes, including all documents
incorporated therein by reference, as from time to time amended or supplemented
by the filing of documents pursuant to the Securities Exchange Act of 1934, as
amended (the
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"1934 Act") or the 1933 Act or otherwise, are referred to herein as the
"Registration Statement" and the "Prospectus", respectively, except that if any
revised prospectus shall be provided to the Agents by the Company for use in
connection with the offering of the Notes which is not required to be filed by
the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Agents for such use.
SECTION 1. Appointment as Agents.
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(a) Appointment of Agents. Subject to the terms and conditions
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stated herein, and subject to the reservation by the Company of the right to
sell Notes directly to investors, and to solicit and accept offers to purchase
Notes directly from investors from time to time on its own behalf, the Company
hereby appoints the Agents as the exclusive agents for the purpose of soliciting
purchases of the Notes from the Company by others and agrees that whenever the
Company determines to sell Notes directly to an Agent as principal for resale to
others, it will enter into a Terms Agreement (hereafter defined) relating to
such sale in accordance with the provisions of Section 3(b) hereof. The Agents
are not authorized to appoint sub-agents or to engage the services of any other
broker or dealer in connection with the offer or sale of the Notes. The Company
agrees that, during the period the Agents are acting as the Company's agents
hereunder, the Company will not appoint other agents to act on its behalf, or to
assist it, in the placement of the Notes.
(b) Best Efforts Solicitations; Right to Reject Offers. Upon
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receipt of instructions from the Company, each Agent will use its best efforts
to solicit purchases of such principal amount of the Notes as the Company and
such Agent shall agree upon from time to time during the term of this Agreement,
it being understood that the Company shall not approve the solicitation of
purchases of Notes in excess of the amount which shall be authorized by the
Company from time to time. Each Agent will communicate to the Company, orally or
in writing, each offer to purchase Notes, other than those offers rejected by
such Agent. An Agent shall have the right, in its discretion reasonably
exercised, to reject any proposed purchase of Notes made to it, as a whole or in
part, and any such rejection shall not be deemed a breach of such Agent's
agreement contained herein. The Company may accept or reject any proposed
purchase of the Notes, in whole or in part.
(c) Solicitations as Agent; Purchases as Principal. In soliciting
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purchases of the Notes on behalf of the Company, each Agent shall act solely as
agent for the Company and not as principal. Each Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company. No Agent shall have any liability to the Company if any such purchase
is not consummated for any reason. No Agent shall have any obligation to
purchase Notes from the Company as principal, but an Agent may agree from time
to time to purchase Notes as principal. Any such purchase of Notes by
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an Agent as principal shall be made pursuant to a Terms Agreement in accordance
with Section 3(b) hereof.
(d) Delayed Delivery Contracts. The Company authorizes the Agents
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to solicit offers to purchase Notes pursuant to delayed delivery contracts (the
"Contract Notes") substantially in the form of Exhibit D attached hereto
("Delayed Delivery Contracts") with such changes therein as the Company may
approve. Delayed Delivery Contracts are to be with institutional investors,
including commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions. Upon execution
of a Delayed Delivery Contract by the Company, the Company will pay the Agent
which arranged such contract as compensation the fee set forth in Schedule A
hereto in respect of the principal amount of Contract Notes purchased as a
result of solicitations made by such Agent. The Company will make Delayed
Delivery Contracts in all cases where sales of Contract Notes arranged by the
Agents have been approved by the Company. The Agents will not have any
responsibility in respect of the validity or the performance of Delayed Delivery
Contracts.
(e) Reliance. The Company and the Agents agree that any Notes the
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placement of which an Agent arranges shall be placed by such Agent, and any
Notes purchased by an Agent shall be purchased, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties.
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(a) Representations and Warranties. The Company represents and
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warrants to each Agent as of the date hereof, as of the date of each acceptance
by the Company of an offer for the purchase of Notes (whether through such Agent
as agent or to such Agent as principal), as of the date of each delivery of
Notes (whether through such Agent as agent or to an Agent as principal) (the
date of each such delivery to an Agent as principal being hereafter referred to
as a "Settlement Date"), and as of the times referred to in Section 7(b) hereof
(each a "Representation Date") as follows:
(i) Registration Statement and Prospectus. At the time the
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Registration Statement became effective, the Registration Statement
complied, and as of each Representation Date will comply, in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations
and the 1939 Act and the rules and regulations of the SEC promulgated
thereunder. The Registration Statement, at the time it became effective,
did not, and at each time thereafter at which any amendment to the
Registration Statement becomes effective and any Annual Report on Form l0-K
is filed by the Company with the SEC and as of each Representation Date
will not, contain an untrue statement of a material fact or omit to state a
material fact required
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to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, as of the date hereof, does not, and as of each
Representation Date will not, contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representation or warranty as to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by or on
behalf of an Agent expressly for use in the Registration Statement or
Prospectus or to that part of the Registration Statement which constitutes
the Trustee's Statement of Eligibility and Qualification under the 1939 Act
("Form T-1").
(ii) Incorporated Documents. The documents incorporated by
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reference in the Prospectus, at the time they were or hereafter are filed
with the SEC, complied or when so filed will comply, as the case may be, in
all material respects with the requirements of the 1934 Act and the rules
and regulations promulgated thereunder (the "1934 Act Regulations"), and,
when read together and with the other information in the Prospectus, did
not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were or are made, not misleading.
(iii) Material Changes. Since the respective dates as of which
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information is given in the Registration Statement and Prospectus, except
as may otherwise be stated therein or contemplated thereby, there has been
no material adverse change in the condition, financial or otherwise, or in
the earnings, business or properties of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business.
(iv) Ratings. The Medium-Term Note Program under which the Notes
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are issued (the "Program"), as well as the Notes, are rated BBB by Standard
& Poor's Ratings Services, or such other rating as to which the Company
shall have most recently notified the Agents pursuant to Section 4(a)
hereof.
(b) Additional Certifications. Any certificate signed by any
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officer of the Company and delivered to an Agent or to counsel for the Agents in
connection with an offering of Notes or the sale of Notes to an Agent as
principal shall be deemed a representation and warranty by the Company to such
Agent as to the matters covered thereby on the date of such certificate and at
each Representation Date subsequent thereto.
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SECTION 3. Solicitations as Agent; Purchases as Principal.
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(a) Solicitations as Agent. On the basis of the representations and
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warranties herein contained, but subject to the terms and conditions herein set
forth, each Agent agrees, as an agent of the Company, to use its best efforts to
solicit offers to purchase the Notes upon the terms and conditions set forth
herein and in the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agents, as agents, commencing
at any time for any period of time or permanently. Upon receipt of instructions
from the Company, the Agents will immediately suspend solicitation of purchases
from the Company until such time as the Company has advised the Agents that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as set
forth in Schedule A hereto. Without the prior approval of the Company, no Agent
may reallow any portion of the commission payable pursuant hereto to dealers or
purchasers in connection with the offer and sale of any Notes.
The purchase price, interest rate, maturity date and other terms of
the Notes shall be agreed upon by the Company and the Agents and set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes. Except as may be otherwise
provided in such supplement to the Prospectus, the Notes will be issued in
denominations of U.S. $1,000 or any amount in excess thereof which is an
integral multiple of U.S. $1,000. All Notes sold through an Agent as agent will
be sold at 100% of their principal amount unless otherwise agreed to by the
Company and such Agent.
(b) Purchases as Principal. Each sale of Notes to an Agent as
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principal shall be made in accordance with the terms contained herein and
pursuant to a separate agreement which will provide for the sale of such Notes
to, and the purchase and reoffering thereof by, such Agent. Each such separate
agreement (which may be an oral agreement and confirmed in writing as described
below between the relevant Agent and the Company) is herein referred to as a
"Terms Agreement". Unless the context otherwise requires, each reference
contained herein to "this Agreement" shall, as between the Company and the Agent
that is party to a Terms Agreement, be deemed to include any applicable Terms
Agreement between the Company and such Agent. Each such Terms Agreement,
whether oral (and confirmed in writing, which may be by facsimile transmission
sent by the Company to the applicable Agent) or in writing, shall be with
respect to such information (as applicable) as is specified in Exhibit A hereto.
An Agent's commitment to purchase Notes as principal pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the
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representations and warranties of the Company contained herein and shall be
subject to the terms and conditions set forth herein. Each Terms Agreement shall
specify the principal amount of Notes to be purchased by an Agent pursuant
thereto, the price to be paid to the Company for such Notes, the time and place
of delivery of and payment for such Notes and such other provisions (including
further terms of the Notes) as may be mutually agreed upon. Unless expressly
authorized by the Company pursuant to the Terms Agreement, no Agent is
authorized to utilize a selling or dealer group in connection with the resale of
the Notes purchased. Such Terms Agreement shall also specify the requirements
for any opinion of counsel, officer's certificate or comfort letter to be
delivered by, or on behalf of, the Company.
(c) Administrative Procedures. Administrative procedures with
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respect to the sale of Notes shall be agreed upon from time to time by the
Agents and the Company (the "Procedures"). The Agents and the Company agree to
perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
SECTION 4. Covenants of the Company
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The Company covenants with the Agents as follows:
(a) Notice of Certain Events. The Company will notify the Agents as
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soon as reasonably practicable (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the transmittal to the SEC for filing of any
supplement to the Prospectus or any document to be filed pursuant to the 1934
Act which will be incorporated by reference in the Prospectus and (iii) of the
receipt of any comments from the SEC with respect to the Registration Statement
or the Prospectus. The Company will notify the Agents immediately of (x) any
request by the SEC for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (y) the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose and
(z) any change in the rating assigned by any nationally recognized statistical
rating organization to the Program or any debt securities (including the Notes)
of the Company, or the public announcement by any nationally recognized
statistical rating organization that is has under surveillance or review, with
possible negative implications, its rating of the Program or any such debt
securities, or the withdrawal by any nationally recognized statistical rating
organization of its rating of the Program or any such debt securities. The
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will not amend
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or supplement the Registration Statement or Prospectus (other than (i) by filing
documents under the 1934 Act which are incorporated by reference therein or (ii)
an amendment or
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supplement providing solely for a change in the interest rates of Notes or other
terms of Notes commonly included in a pricing supplement), without having
previously advised and furnished to the Agents copies of any such amendment or
supplement to which the Agents, on advice from counsel, have not reasonably
objected within a reasonable period of time (it being understood and agreed that
the Agents will receive such copies in confidence and that such copies will not
be disseminated outside the Agents' offices or within the Agents' offices to
anyone other than those persons having a need to know such information in
connection with the performance of the Agents' services under this Agreement).
The Company will furnish the Agents with copies of filings pursuant to the 1934
Act on or after the date of such filing.
(c) Copies of the Registration Statement and the Prospectus. The
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Company will deliver to each Agent as many conformed copies of the Registration
Statement (as originally filed) and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and documents
incorporated by reference in the Prospectus) as such Agent may reasonably
request. The Company will furnish to each Agent as many copies of the
Prospectus (as amended or supplemented) as such Agent shall reasonably request
so long as such Agent is required to deliver a Prospectus in connection with
sales or solicitations of offers to purchase the Notes.
(d) Revisions of Prospectus -- Material Changes. Except as
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otherwise provided in subsection (k) of this Section 4 and Section 11(c) hereof,
if at any time during the term of this Agreement any event shall occur or
condition exist as a result of which it is necessary, in the reasonable opinion
of counsel for the Agents or counsel for the Company, to further amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
or if it shall be necessary, in the reasonable opinion of either such counsel,
to amend or supplement the Registration Statement or the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
immediate notice shall be given, and confirmed in writing, to the Agents to
cease the solicitation of offers to purchase the Notes in their capacity as
agents and to cease sales of any Notes an Agent may then own as principal
pursuant to a Terms Agreement, and the Company will promptly prepare and file
with the SEC such amendment or supplement, whether by filing documents pursuant
to the 1934 Act, the 1933 Act or otherwise, as may be necessary to correct such
untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements.
(e) Prospectus Revisions -- Periodic Financial Information. Except
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as otherwise provided in subsections (b) and (k) of this Section 4, on or prior
to the date on which there shall be released to the general public preliminary
interim financial statement information related to the Company with respect to
each of the first three quarters of any
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fiscal year or preliminary financial statement information with respect to any
fiscal year (the "Flash Earnings Report"), the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented as soon as reasonably practicable thereafter to
include or incorporate by reference capsule financial information with respect
thereto and corresponding information for the comparable period of the preceding
fiscal year, as well as such other information and explanations as shall be
necessary for an understanding thereof or as shall be required by the 1933 Act
or the 1933 Act Regulations. The Agents shall, upon the request of the Company,
suspend solicitation of purchases of the Notes for the period from the release
of the Flash Earnings Report until the Company has caused the Prospectus to be
amended or supplemented to include or incorporate by reference such information
and the Company will not accept any offer to purchase Notes during such period.
(f) Prospectus Revisions -- Audited Financial Information. Except
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as otherwise provided in subsection (k) of this Section 4, on or prior to the
date on which there shall be released to the general public financial
information included in or derived from the audited financial statements of the
Company for the preceding fiscal year, the Company shall cause the Registration
Statement and the Prospectus to be amended, whether by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate
by reference such audited financial statements and the report or reports, and
consent or consents to such inclusion or incorporation by reference, of the
independent auditors with respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
(g) Earnings Statements. The Company will make generally available
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to its security holders as soon as practicable, but not later than 90 days after
the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the 1933 Act) covering each
twelve-month period beginning, in each case, not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined in such
Rule 158) of the Registration Statement with respect to each sale of Notes.
(h) Blue Sky Qualifications. The Company will cooperate with the
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Agents, in arranging for the qualification of the Notes for offering and sale
under the applicable securities laws of such states and other jurisdictions of
the United States as the Agents may reasonably designate, and will maintain such
qualifications in effect for as long as may be required for the distribution of
the Notes; provided, however, that the Company shall not be obligated to file
any general consent to service of process, qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or subject itself to taxation
in excess of a nominal dollar amount in any such jurisdiction where it is not
then so subject. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in
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which the Notes have been qualified as above provided. The Company will promptly
advise the Agents of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Notes for sale in any such state
or jurisdiction or the initiating or threatening of any proceeding for such
purpose.
(i) 1934 Act Filings. The Company, during the period when the
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Prospectus is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed by it with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act.
(j) Stand-Off Agreement. If required pursuant to the terms of a
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Terms Agreement, between the date of any Terms Agreement and the Settlement Date
with respect to such Terms Agreement, the Company will not, without the relevant
Agent's prior consent, offer or sell, or enter into any agreement to sell, any
debt securities of the Company (other than the Notes that are to be sold
pursuant to such Terms Agreement, commercial paper sold in the ordinary course
of business and private sales of debt securities exempt from registration under
the 1933 Act other than pursuant to Rule 144A thereunder).
(k) Suspension of Certain Obligations. The Company shall not be
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required to comply with the provisions of subsection (b) (to the extent that
subsection (b) requires the Company to furnish to the Agents prior to filing
documents proposed to be filed pursuant to the 1934 Act), (c), (d), (e) or (f)
of this Section 4 during any period from the time (i) the Agents shall have
suspended solicitation of purchases of the Notes in their capacity as agents
pursuant to a request from the Company and (ii) no Agent shall then hold any
Notes as principal purchased pursuant to a Terms Agreement, to the time the
Company shall determine that solicitation of purchases of the Notes should be
resumed or shall subsequently enter into a new Terms Agreement with an Agent.
SECTION 5. Conditions of Obligations.
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The obligations of the Agents to solicit offers to purchase the
Notes as agents of the Company, the obligations of any purchasers of the Notes
sold through an Agent as agent, and any obligation of an Agent to purchase Notes
pursuant to a Terms Agreement will be subject to the accuracy, as of each
Representation Date, of the representations and warranties on the part of the
Company herein and to the accuracy, as of each Representation Date, of the
statements of the Company's officers made in any certificate furnished pursuant
to the provisions hereof, to the performance and observance by the Company of
all its covenants and agreements herein contained and to the following
additional conditions precedent:
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(a) Legal Opinions. On the date hereof, the Agents shall have
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received the following legal opinions, dated as of the date hereof and in
form and substance satisfactory to the Agents:
(1) Opinions of Company Counsel. (A) The opinion of any General
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Counsel or Assistant General Counsel of the Company, to the effect
that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
Commonwealth of Virginia.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, except
where the failure to so qualify or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries considered as one enterprise.
(iv) Each subsidiary of the Company that is a significant
subsidiary (each a "Significant Subsidiary") as defined in Rule
405 of Regulation C of the 1933 Act Regulations has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Prospectus, and, to the best of such counsel's knowledge, is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the Company
and its subsidiaries considered as one enterprise; all of the
issued and outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued, is fully
paid and nonassessable, and, except for directors' qualifying
shares, is owned by the Company, free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity.
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required for the
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consummation of the transactions contemplated by this Agreement,
except for a filing of a prospectus under Rule 424 and such as
may be required under state securities laws.
(vi) The execution, delivery and performance of the
Indenture and this Agreement and the issuance and sale of the
Notes and compliance with the terms and provisions thereof will
not result in a material breach or violation of any of the terms
and provisions of, or constitute a default under, any statute,
any rule, regulation or order of any governmental agency or body
or any court having jurisdiction over the Company or any
Significant Subsidiary or any of their properties or, to the best
of such counsel's knowledge, any agreement or instrument known to
such counsel to which the Company or any such Significant
Subsidiary is a party or by which the Company or any Significant
Subsidiary is bound or to which any of the properties of the
Company or any Significant Subsidiary is subject, or the charter
or by-laws of the Company or any Significant Subsidiary, and the
Company has full power and authority to authorize, issue and sell
the Notes as contemplated by this Agreement.
(vii) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus complied when filed
as to form in all material respects with the 1934 Act and the
1934 Act Regulations thereunder.
In addition, such counsel shall state (the "Additional
Statements") that he or she has participated in conferences with
officers and other representatives of the Company, representatives of
Ernst & Young LLP, independent auditors for the Company, and the
representatives of the Agents and Counsel for the Agents, at which the
contents of the Registration Statement, the Prospectus and any
amendment thereof or supplement thereto and related matters were
discussed and although such counsel has not undertaken to investigate
or verify independently, and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto, no facts have come to the attention of such
counsel which would lead such counsel to believe (A) that the
Registration Statement and the Prospectus included therein (other than
the historical, pro forma, projected or other financial statements,
information and data and statistical information and data included or
incorporated by reference therein or omitted therefrom, and Form T-1,
in each case as to which no opinion need be rendered), as of the date
of filing of the Company's Annual Report on Form 10-K for the fiscal
year ended
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December 26, 1997, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or (B) that
the Prospectus as amended or supplemented on date of the Prospectus
and the date of such opinion (other than historical, pro forma,
projected or other financial statements, information and data and
statistical information and data included or incorporated by reference
therein or omitted therefrom, in each case as to which no opinion need
be rendered) contains or contained any untrue statement of a material
fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(B) The opinion of McGuire, Woods, Battle & Boothe LLP, counsel
to the Company, to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and (assuming the Indenture has been
duly authorized, executed and delivered by the Trustee)
constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles, and except further as enforcement
thereof may be limited by (A) requirements that a claim with
respect to any Notes denominated other than in U.S. dollars (or a
foreign currency or foreign currency unit judgment in respect of
such claim) be converted into United States dollars at a rate of
exchange prevailing on a date determined pursuant to applicable
law or (B) governmental authority to limit, delay or prohibit the
making of payments in foreign currency or currency units or
payments outside the United States.
(iii) The Notes are in due and proper form, have been duly
authorized for issuance, offer and sale pursuant to this
Agreement, and when the terms of a particular Note and of the
issue and sale thereof have been duly authorized and established
in conformity with the Indenture and such Note has been duly
completed, executed, authenticated and issued in accordance with
the Indenture and the Action of Authorized Pricing Officers and
delivered against payment
14
therefor as contemplated by this Agreement, such Note will
constitute a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, and except
further as enforcement thereof may be limited by (A) requirements
that a claim with respect to any Notes denominated other than in
U.S. dollars (or a foreign currency or foreign currency unit
judgment in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (B) governmental
authority to limit, delay or prohibit the making of payments in
foreign currency or currency units or payments outside the United
States, and each holder of Notes will be entitled to the benefits
of the Indenture.
(iv) The Indenture is qualified under the 1939 Act.
(v) The Registration Statement is effective under the
1933 Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act nor proceedings therefor
initiated or threatened by the SEC.
(vi) At the time the Registration Statement became
effective, the Registration Statement (other than the historical,
pro forma, projected or other financial statements, information
and data and statistical information and data included or
incorporated by reference therein or omitted therefrom and
Form T-1, in each case as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the 1933 Act and the applicable rules and
regulations promulgated thereunder.
(vii) The statements in the Prospectus under the captions
"Description of Debt Securities", "Description of Debt Warrants",
"Description of Currency Warrants", "Description of Notes" and
"Special Provisions Relating to Foreign Currency Notes", insofar
as they purport to summarize certain provisions of documents
specifically referred to therein, are accurate summaries of such
provisions.
(viii) The information contained in the Prospectus under
the caption "United States Taxation", to the extent that it
constitutes matters
15
of law or legal conclusions, has been reviewed by such counsel
and is correct in all material respects.
In addition, subject to such counsel's customary qualifications
about the scope of its obligations in connection with its
participation in the preparation of documents, such counsel shall make
the Additional Statements.
In rendering such opinion, McGuire, Woods, Battle & Boothe LLP
may (A) assume that the Notes and the Indenture are governed by
Virginia law and (B) rely as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company
and public officials. Except as otherwise set forth herein, all
references in this Section 5(a)(1)(B) to the Prospectus shall be
deemed to include any amendment or supplement thereto as of the date
of such opinion.
(2) Opinion of Counsel to the Agent. The opinion of Shearman &
-------------------------------
Sterling ("Counsel to the Agents") shall cover such matters as shall
reasonably be requested by the Agents. In addition, such counsel
shall make the Additional Statements.
(b) Officer's Certificate. At the date hereof the Agents shall have
---------------------
received a certificate of the Chairman of the Board, the President, an
Executive Vice President or the Managing Director--Corporate Finance and
another person who is the principal financial or accounting officer of the
Company, or in their absence, other proper officers of the Company
satisfactory to the Agents, substantially in the form of Exhibit B hereto
and dated as of the date hereof, to the effect that, to the best of such
officer's knowledge, (i) the representations and warranties of the Company
contained in Section 2 hereof are true and correct in all material respects
with the same force and effect as though expressly made at and as of the
date of such certificate, (ii) the Company has performed or complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the date of such certificate, and (iii)
no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the SEC.
(c) Comfort Letter. On the date hereof, the Agents shall have
--------------
received a letter from Ernst & Young, dated as of the date hereof and in
form and substance satisfactory to the Agents, to the effect that:
(i) They are independent auditors with respect to the Company
and its subsidiaries within the meaning of the 1933 Act and the 1933
Act Regulations.
16
(ii) In their opinion, the consolidated financial statements of
the Company audited by them and included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 26, 1997 and
incorporated by reference in the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the 1934 Act and the related published rules and
regulations thereunder.
(iii) They have performed specified procedures, not constituting
an audit, including a reading of the unaudited interim consolidated
financial statements included or incorporated by reference in the
Prospectus and the latest available interim consolidated financial
statements of the Company, a reading of the minute books of the
Company since the end of the most recent fiscal year with respect to
which an audit report has been issued, inquiries of and discussions
with certain officials of the Company responsible for financial and
accounting matters with respect to the unaudited interim consolidated
financial statements included or incorporated by reference in the
Registration Statement and Prospectus and the latest available
unaudited interim consolidated financial statements of the Company and
such other inquiries and procedures as may be specified in such letter
carried out to a specified date not more than five days prior to the
date hereof, and on the basis of such inquiries and procedures nothing
came to their attention that caused them to believe that: (A) the
unaudited interim consolidated financial statements of the Company
included or incorporated by reference in the Registration Statement
and Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the 1934 Act and the 1934
Act Regulations or were not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with
that of the audited financial statements included or incorporated by
reference therein or that the latest available interim consolidated
financial statements of the Company are not stated on a basis
substantially consistent with that of the audited consolidated
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus, or (B) at the date of the
latest available balance sheet read by such independent auditors,
there were any net decreases in the consolidated shareholders' equity
of the Company or any increase in consolidated long-term debt of the
Company in each case as compared with the amounts shown on the most
recent consolidated balance sheet of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement
and Prospectus or, for the period from the date of the latest income
statement included or incorporated by reference in the Prospectus to
the date of the latest available income statement read by such
independent auditors there were any net changes, as compared with the
corresponding period of the previous year, in the consolidated
operating revenues except in each such case as set forth in or
17
contemplated by the Registration Statement and Prospectus or except
for such exceptions enumerated in such letter as shall have been
agreed to by the Agents and the Company.
(iv) In addition to the examination referred to in their report
included or incorporated by reference in the Registration Statement
and the Prospectus, and the limited procedures referred to in clause
(iii) above, they have carried out certain other specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information which are derived from
accounting records of the Company and which are included or
incorporated by reference in the Registration Statement and Prospectus
and which are specified by the Agents, and have found such amounts,
percentages and financial information to be in agreement with the
relevant accounting records of the Company and its subsidiaries
identified in such letter.
(d) Other Documents. On the date hereof and on each Settlement Date
---------------
with respect to any applicable Terms Agreement, Counsel to the Agents shall
have been furnished with such documents and opinions as such counsel may
reasonably require for the purpose of enabling such counsel to pass upon
the issuance and sale of Notes as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any
of the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of Notes as herein contemplated shall
be reasonably satisfactory in form and substance to the Agents and to
Counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement (or, at the
option of an Agent, any applicable Terms Agreement) may be terminated by the
Agents or, as to any Agent, by such Agent, by notice to the Company at any time
and any such termination shall be without liability of any party to any other
party, except that the covenant regarding provision of an earnings statement set
forth in Section 4(g) hereof, the provisions concerning payment of expenses
under Section 9 hereof, the indemnity and contribution agreement set forth in
Section 8 hereof, the provisions concerning the representations, warranties and
agreements to survive delivery of Section 10 hereof and the provisions set forth
under "Parties" of Section 14 hereof shall remain in effect.
SECTION 6.Delivery of and Payment for Notes Sold through the Agents.
---------------------------------------------------------
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery
18
of or to make payment for a Note on the date fixed for settlement, the relevant
Agent shall promptly notify the Company and deliver the Note to the Company,
and, if such Agent has already paid the Company for such Note, the Company will
promptly return such funds to such Agent. If such failure occurred for any
reason other than default by such Agent in the performance of its obligations
hereunder, the Company will reimburse such Agent on an equitable basis for its
loss of the use of the funds for the period such funds were credited to the
Company's account.
SECTION 7. Additional Covenants of the Company.
-----------------------------------
The Company covenants and agrees with the Agents that:
(a) Reaffirmation of Representations and Warranties. Each
-----------------------------------------------
acceptance by it of an offer for the purchase of Notes (whether through
such Agent as agent or to such Agent as principal), and each delivery of
Notes (whether through such Agent as agent or to an Agent as principal),
shall be deemed to be an affirmation to such Agent that the representations
and warranties of the Company contained in this Agreement and in any
certificate theretofore delivered to the Agents pursuant hereto are true
and correct as of each such Representation Date, and an undertaking to such
Agent that such representations and warranties will be true and correct at
the time of delivery of the Note or Notes relating to such acceptance or
sale, as the case may be, as though made at and as of each such
Representation Date (and it is understood that such representations and
warranties shall relate to the Registration Statement and Prospectus as
amended and supplemented).
(b) Subsequent Delivery of Certificates. Each time that the
-----------------------------------
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in
the interest rates or other terms of Notes commonly included in a pricing
supplement, and, other than by an amendment or supplement which relates
exclusively to an offering of debt securities other than the Notes), or
there is filed with the SEC any document incorporated by reference into the
Prospectus (other than any Current Report on Form 8-K relating exclusively
to the issuance of debt securities under the Registration Statement), the
Company shall promptly furnish or cause to be furnished to the Agents a
certificate dated the date of filing with the SEC of such supplement or
document or the date of effectiveness of such amendment, as the case may
be, in form reasonably satisfactory to the Agents to the effect that the
statements contained in the certificate referred to in Section 5(b) 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 the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a certificate
of the same tenor as the certificate referred
19
to in said Section 5(b), modified as necessary to relate to the
Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that the
-------------------------------------
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in
the interest rates or other terms of Notes commonly included in a pricing
supplement or similar changes or solely for the inclusion of additional
financial information, and, other than by an amendment or supplement which
relates exclusively to an offering of debt securities other than the Notes)
or there is filed with the SEC any document incorporated by reference into
the Prospectus (other than any Current Report on Form 8-K or Quarterly
Report on Form 10-Q), the Company shall promptly furnish or cause to be
furnished to the Agents a written opinion of a General Counsel or any
Assistant General Counsel of the Company or other counsel satisfactory to
the Agents, dated the date of filing with the SEC of such supplement or
document or the date of effectiveness of such amendment, as the case may
be, in form and substance satisfactory to the Agents, of the same tenor as
the opinions referred to in Section 5(a)(1) hereof, but modified, as
necessary, to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such opinion; or, in
lieu of such opinions, counsel last furnishing such opinions to the Agents
shall furnish the Agents with a letter substantially in the form of Exhibit
C hereto to the effect that the Agents may rely on such last opinion to the
same extent as though it was dated the date of such letter authorizing
reliance (except that statements in such last opinion shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that the
--------------------------------------
Registration Statement or the Prospectus shall be amended or supplemented
to include additional historical financial information derived from the
accounting records of the Company or there is filed with the SEC any
document incorporated by reference into the Prospectus which contains
additional financial information (other than (i) a Current Report on
Form 8-K containing solely information under Item 5 of the Information to
be included in the Report and (ii) the Form 10-Q for the quarter ended
March 27, 1998 provided that such Form 10-Q is filed with the SEC on or
about April 24, 1998), the Company shall cause Ernst & Young forthwith to
furnish the Agents a letter, dated the date of filing of such amendment,
supplement or document with the SEC, in form reasonably satisfactory to the
Agents, of the same tenor as the portions of the letter referred to in
clauses (i) and (ii) of Section 5(c) hereof but modified to relate to the
Registration Statement and Prospectus, as amended and supplemented to the
date of such letter, and of the same general tenor as the portions of the
letter referred to in clauses (iii) and (iv) of said Section 5(c) with such
changes as may be necessary to
20
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 the Prospectus is amended or supplemented solely
to include financial information as of and for a fiscal quarter, Ernst &
Young may limit the scope of such letter to the unaudited financial
statements included in such amendment or supplement.
SECTION 8. Indemnification and Contribution.
--------------------------------
(a) The Company will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each Agent for any legal or other expenses reasonably incurred by such Agent in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Agent, if any,
specifically for use therein. The Company acknowledges that the statements set
forth in the first sentence of the last paragraph of text on the cover page of
the Prospectus Supplement dated April 22, 1998 (the "Prospectus Supplement ")
and the second paragraph of text on page S-2 of the Prospectus Supplement and
the sixth full paragraph of text under the caption "Supplemental Plan of
Distribution" in the Prospectus Supplement, concerning activities of the Agents
that may stabilize or maintain the price of the Notes (the "Furnished
Information") constitute the only information furnished in writing by or on
behalf of the Agents for inclusion in the Prospectus.
(b) Each Agent severally agrees that it will indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
21
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Agent, if any, specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred. The Company acknowledges that
the only information furnished in writing by or on behalf of the Agents for
inclusion in the Prospectus is the Furnished Information.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability the indemnification obligation provided under subsection (a) or (b)
above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in subsection (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), however, the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel only if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded upon advice of counsel that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
22
liability arising out of such claim, action, suit or proceeding. An indemnifying
party shall not be liable under this Section 8 to any indemnified party
regarding any settlement or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise, or consent is consented to
by such indemnifying party, which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then the Company and the Agent [who sold the Notes
which are the subject of the claim for which contribution is to be made] shall
contribute to the aggregate losses, claims, damages and liabilities referred to
in subsection (a) or (b) above (collectively, the "Losses") (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the applicable Agent on the other from such offering
of the Notes or (ii) if the allocation provided by clause (i) above is
unavailable for any reason, 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 the applicable Agent on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the applicable Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from the
sale of Notes which are the subject of the claim for which contribution is to be
made sold to or through such Agent (before deducting expenses) received by the
Company bear to the total discounts and commissions received by such Agent in
connection with such sale. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or an Agent, the intent of the
parties, and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Agents agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the Notes which
are the subject of the claim for which contribution is to be made sold to or
through such Agent were offered to the public exceeds the amount of any damages
which such Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to
23
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Agents' obligations in this subsection (d) to contribute
are several in proportion to the total price at which Notes which are the
subject of the claim for which contribution is to be made sold to or through
each Agent were offered to the public and not joint.
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Agent within the meaning of the Act; and the obligations of the Agents under
this Section 8 shall be in addition to any liability which the respective Agents
may otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed the
Registration Statements and to each person, if any, who controls the Company
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act.
SECTION 9. Payment of Expenses.
-------------------
The Company will pay all expenses incident to the performance of
its obligations under this Agreement, including:
(i) The preparation and filing of the Registration Statement and
all amendments thereto and the Prospectus and any amendments or supplements
thereto;
(ii) The preparation, filing and reproduction of this Agreement;
(iii) The preparation, printing, issuance and delivery of the
Notes, including any fees and expenses relating to the use of book-entry
notes;
(iv) The fees and disbursements of the Company's accountants and
counsel, of the Trustee and its counsel, and of any Calculation Agent or
Exchange Rate Agent;
(v) The reasonable fees and disbursements of counsel to the
Agents incurred from time to time in connection with the transactions
contemplated hereby;
(vi) The qualification of the Notes under state securities laws in
accordance with the provisions of Section 4(h) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Agents in
connection therewith and in connection with the preparation of any Blue Sky
Survey and any Legal Investment Survey;
24
(vii) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or supplements
thereto, and the delivery by the Agents of the Prospectus and any
amendments or supplements thereto in connection with solicitations or
confirmations of sales of the Notes;
(viii) The preparation, printing and delivery to the Agents of
copies of the Indenture and all supplements and amendments thereto;
(ix) Any fees charged by rating agencies for the rating of the
Notes;
(x) The fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.; and
(xi) Any reasonable advertising and other reasonable out-of-
pocket expenses of the Agents incurred with the approval of the Company.
SECTION 10. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
The respective representations, warranties and agreements of the
Company or its officers and of the Agents contained in or made pursuant to this
Agreement shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Agents or the Company or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
shall survive each delivery of and payment for any of the Notes.
SECTION 11. Termination.
-----------
(a) Termination of this Agreement. This Agreement (excluding any
-----------------------------
Terms Agreement) may be terminated for any reason, at any time by either the
Company or an Agent, as to itself, upon the giving of written notice of such
termination to the other party hereto.
(b) Termination of a Terms Agreement. The Agent party to a Terms
--------------------------------
Agreement (or any purchaser of a Note sold through an Agent as agent) may
terminate such Terms Agreement (or such purchaser's obligation), immediately
upon notice to the Company, at any time prior to the Settlement Date relating
thereto if (i) there has been, since the date of such Terms Agreement (or
agreement to purchase) or since the respective dates as of which information is
given in the Prospectus, any change, or any development involving a prospective
change, in or affecting particularly the financial condition, business or
properties of the Company or its subsidiaries which, in the judgment of such
Agent, materially impairs the investment quality of the Notes, (ii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other
25
national or international calamity or crisis the effect of which on financial
markets is such as to make it, in the reasonable judgment of such Agent,
impracticable or inadvisable to proceed with the offering or delivery of the
Notes, (iii) trading in any securities of the Company has been suspended by the
SEC or the New York Stock Exchange, or if trading generally on the New York
Stock Exchange shall have been suspended or materially limited or minimum prices
for trading have been fixed on such exchange, (iv) if a banking moratorium shall
have been declared by either federal or New York State authorities or if a
banking moratorium shall have been declared by the relevant authorities in the
country or countries of origin of any foreign currency or currencies in which
the Notes are denominated or payable or (v) any downgrading in the rating of any
debt securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities Act),
or any public announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating).
(c) General. In the event of any such termination, no party will
-------
have any liability to the other party hereto, except that (i) an Agent shall be
entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination (a) an Agent shall own
any Notes purchased pursuant to a Terms Agreement with the intention of
reselling them or (b) an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or his agent of the Note
or Notes relating thereto has not occurred, the covenants set forth in Sections
4 and 7 hereof and the provisions of Section 5 hereof, shall remain in effect
until such Notes are so resold or delivered, as the case may be, and (iii) the
covenant set forth in Section 4(g) hereof, the indemnity and contribution
agreements set forth in Section 8 hereof and the provisions of Sections 9, 10
and 14 hereof shall remain in effect.
SECTION 12. Notices.
-------
Unless otherwise provided herein, all notices required under the
terms and provisions hereof shall be in writing, either delivered by hand, by
mail or by telex, telecopier or telegram, and any such notice shall be effective
when received at the address specified below.
If to the Company:
CSX Corporation
One James Center
901 East Cary Street
Richmond, Virginia 23219
Attention: David D. Owen
26
Managing Director--Corporate Finance
Telephone: (804) 782-1428
Telecopier: (804) 783-1346
If to Agents:
Chase Securities Inc.
270 Park Ave.
New York, NY 10017
Attention: Medium-Term Note Desk
Telephone: (212) 834-4421
Telecopier: (212) 834-6081
BancAmerica Robertson Stephens
231 South LaSalle Street, 18/th/ floor
Chicago, IL 60697
Attention: Matthew Carey - MTN Product Management
Telephone: (312) 828-2860
Telecopier: (312) 974-8936
Credit Suisse First Boston
Eleven Madison Ave.
New York, NY 10010-3629
Attention: Short and Medium Term Finance
Telephone: (212) 325-7198
Telecopier: (212) 325-8183
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Attention: [Karen Robertson]
Telephone: (212) 902-8224
Telecopier: (212) 422-9458
Lehman Brothers Inc.
3 World Financial Center; 12/th/ floor
New York, NY 10285
Attention: Medium-Term Notes
Telephone: (212) 528-7857
Telecopier: (212) 528-8074
Merrill Lynch & Co.
27
World Financial Center; North Tower
New York, NY 10281-1310
Attention: Medium-Term Note Product Management
Telephone: (212) 449-7476
Telecopier: (212) 449-2234
Morgan Stanley & Co. Incorporated
1585 Broadway - 2/nd/ floor
New York, NY 10036
Attention: Manager - Continuously Offered Products
Telephone: (212) 761-4000
Telecopier: (212) 761-0780
With a copy to:
Morgan Stanley & Co. Incorporated
1585 Broadway - 34/th/ Floor
New York, NY 10036
Attention: Peter Cooper, Investment Banking Information Center
Telephone: (212) 761-8385
Telecopier: (212) 761-0260
NationsBanc Montgomery Securities LLC
100 North Tryon Street
Charlotte, NC 28255
NC1007-07-01
Attention: Continuously Offered Products
Telephone: (704) 386-6616
Telecopier: (704) 388-9939
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Attention: Medium-Term Note Department
Telephone: (212) 783-5907
Telecopier: (212) 783-2043
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 12.
28
SECTION 13. Governing Law.
-------------
This Agreement and all the rights and obligations of the parties
shall be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed in New York.
SECTION 14. Parties.
-------
This Agreement shall inure to the benefit of and be binding upon
the Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Section 8 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties hereto and
respective successors and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Notes shall be deemed to be a
successor by reason merely of such purchase.
SECTION 15. Counterparts.
------------
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original, but all such counterparts will together
constitute one and the same instrument.
SECTION 16. Headings.
--------
The section headings are for convenience only and shall not affect
the construction hereof.
If the foregoing is in accordance with the Agents' understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between the Agents and the Company in accordance with its terms.
Very truly yours,
CSX CORPORATION
By:/s/ David D. Owen
-------------------------------
Name:
Title:
Accepted:
CHASE SECURITIES INC.
By: /s/ John W. Judson
---------------------------
Name: John W. Judson
Title: Managing Director
BANCAMERICA ROBERTSON STEPHENS
By: /s/ James Baldini
---------------------------
Name: James Baldini
Title: Managing Director
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ Helena M. Willner
---------------------------
Name: Helena M. Willner
Title: Vice President
GOLDMAN, SACHS & CO.
By: [SIGNATURE]
-----------------------------------
Name:
Title:
LEHMAN BROTHERS INC.
By: /s/ M. Antonia Paterno-Castello
-------------------------------
Name: M. Antonia Paterno-Castello
Title: Managing Director
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Scott G. Primrose
-------------------------------
Name: Scott G. Primrose
Title: Authorized Signatory
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Harold J. Hendershot III
-------------------------------
Name: Harold J. Hendershot III
Title: Vice President
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ Lynn T. McConnell
-------------------------
Name: Lynn T. McConnell
Title: Managing Director
SALOMON BROTHERS INC
By: /s/ Fred Larsen
-------------------------
Name: Fred Larsen
Title: Director
SCHEDULE A
As compensation for the services of an Agent hereunder, the Company
shall pay it, on a discount basis, a commission for the sale of each Note equal
to the principal amount of such Note multiplied by the appropriate percentage
set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
- --------------- ----------------
From 9 months but less than 1 year....... .125%
From 1 year but less than 18 months...... .150
From 18 months but less than 2 years..... .200
From 2 years but less than 3 years....... .250
From 3 years but less than 4 years....... .350
From 4 years but less than 5 years....... .450
From 5 years but less than 6 years....... .500
From 6 years but less than 7 years....... .550
From 7 years but less than 10 years...... .600
From 10 years but less than 15 years..... .625
From 15 years but less than 20 years..... .700
From 20 years to 30 years(1)............. .750
- -----------
(1) Commission for the sale of Notes with a maturity in excess of 30 years
shall be determined by mutual agreement of the Company and the applicable
Agent.
EXHIBIT A
---------
The following terms, if applicable, shall be agreed to by an Agent and
the Company pursuant to each Terms Agreement:
Principal Amount: $________
(or principal amount of foreign currency)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread or Spread Multiplier, if any:
Interest Rate Reset Month(s):
Interest Payment Month(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Period:
Interest Payment Period:
Interest Payment Date:
Calculation Agent:
If Redeemable at the Option of the Company:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
If Repayment at the Option of the Holder:
Repayment Date:
Repayment Percentage:
Date of Maturity:
Purchase Price: _____%:
Settlement Date and Time:
Currency of Denomination:
Denominations (if currency is other than U.S. dollar):
Currency of Payment:
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificate of the same tenor as the certificate referred to
in Section 7(b) of the Distribution Agreement.
Legal Opinion of the same tenor as the legal opinion referred to in
Section 7(c) of the Distribution Agreement.
Comfort Letter of the same tenor as the legal opinion referred to in
Section 7(d) of the Distribution Agreement.
Stand-off Agreement pursuant to Section 4(j) of the Distribution
Agreement.
EXHIBIT B
---------
FORM OF OFFICERS' CERTIFICATE
-----------------------------
CSX CORPORATION
We, [authorized officers' names], [titles] of CSX Corporation, a Virginia
corporation (the "Company"), pursuant to Section 5(b) of the Distribution
Agreement dated April __, 1998 (the "Distribution Agreement") between the
Company and Chase Securities Inc., BancAmerica Robertson Stephens, Credit Suisse
First Boston Corporation, Goldman, Sachs & Co., Lehman Brothers Inc., Merrill
Lynch & Co., Morgan Stanley & Co. Incorporated, NationsBanc Montgomery
Securities LLC and Salomon Brothers Inc hereby certify that, to the best of our
knowledge, after reasonable investigation:
1. The representations and warranties of the Company contained in
Section 2 of the Distribution Agreement are true and correct in all material
respects with the same force and effect as though expressly made at and as of
the date hereof;
2. The Company has performed or complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the date hereof; and
3. No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been initiated
or threatened by the Securities and Exchange Commission.
IN WITNESS WHEREOF, we have hereunto signed our names.
Dated: _____________, ____
_____________________________
[Title]
_____________________________
[Title]
EXHIBIT C
---------
_______________, 19__
[Agents]
Re: CSX Corporation Medium-Term Notes
---------------------------------
Ladies and Gentlemen:
[I] We have delivered an opinion to you dated __________, 19__ as
counsel to CSX Corporation (the "Company"), pursuant to Section 5(a) of the
Distribution Agreement, dated as of _____________ ___, 19__ among the Company
and you, as Agent[s]. You may continue to rely upon such opinion as if it were
dated as of this date except that all statements and opinions contained therein
shall be deemed to relate to the Registration Statement and Prospectus as
amended and supplemented to this date.
This letter is delivered to you pursuant to [Section 7(c) of the
Distribution Agreement] [Section __ of the Terms Agreement, dated as of
_______, between the Company and you].
Very truly yours,
EXHIBIT D
---------
(Three copies of this Delayed Delivery Contract should be signed and
returned to the address shown below so as to arrive not later than __:00 A.M.,
New York time, on __________, 19___.)
DELAYED DELIVERY CONTRACT
-------------------------
[Insert date of offering of
Securities to be sold]
CSX Corporation
c/o [Insert name and address
of Agents]
Attention:
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from CSX Corporation, a
Virginia corporation (the "Company"), and the Company agrees to sell to the
undersigned, as of the date hereof, for delivery on __________________, 19___
(the "Delivery Date"), $___________ principal amount of the Company's
__________________________ (hereinafter called the "Notes"), offered by the
Company's Prospectus, dated ____________, 19__, as supplemented by a Prospectus
Supplement, dated ____________, 19__, and a Pricing Supplement, dated
____________, 19__, acknowledged, at ____% of the principal amount thereof plus
accrued interest, if any, and on the further terms and conditions set forth in
this Delayed Delivery Contract (this "Contract").
Payment for the Notes which the undersigned has agreed to purchase for
delivery on the Delivery Date shall be made to the Company or its order in
immediately available funds in [Richmond, Virginia], at 10:00 A.M., [Richmond]
time, at _______________________ on the Delivery Date upon delivery to [the
undersigned] of the Notes to be purchased by the undersigned [in definitive
form] and in such denominations [and registered in such names] as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.
It is expressly agreed that the provisions for delayed delivery and
payment are for the sole convenience of the undersigned; that the purchase
hereunder of Securities is to be
D-2
regarded in all respects as a purchase as of the date of this Contract; that the
obligation of the Company to make delivery of and accept payment for, and the
obligation of the undersigned to take delivery of and make payment for,
Securities on the Delivery Date shall be subject only to the condition that
investment in the Securities shall not at the Delivery Date be prohibited under
the laws of any jurisdiction in the United States to which the undersigned is
subject.
The undersigned represents that its investment in such Securities is
not, as of the date hereof, prohibited under the laws of any jurisdiction to
which the undersigned is subject and which govern such investment.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
This Contract may be executed by either of the parties hereto in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
It is understood that the acceptance of any Delayed Delivery Contract
(including this Contract) is in the Company's sole discretion and, without
limiting the foregoing, need not be on a first-come, first-served basis. If
this Contract is acceptable to the Company, it is requested that the Company
sign the form of acceptance below and mail or deliver one of the counterparts
hereof to the undersigned at its address set forth below. This will become a
binding contract between the Company and the undersigned when such counterpart
is so mailed or delivered.
Yours very truly,
_________________________________
(Name of Buyer)
By:______________________________
_________________________________
(Name and Title of Signatory)
_________________________________
_________________________________
(Address of Buyer)
D-3
Accepted, as of the date
first above written
CSX CORPORATION
By:_______________________
__________________________
(Title)