<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
_______________
Date of Report (Date of earliest event reported):
January 14, 1994
CAPITAL HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 1-6701 51-0108922
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
</TABLE>
400 West Market Street, Louisville, Kentucky 40202
(Address of principal executive offices) (Zip Code)
(502) 560-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
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(c) Exhibits.
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The following exhibits relating to Capital Holding Corporation's
(the "Company") Medium-Term Notes, Series D (the "Notes"), to be
issued under the Indenture dated as of January 1, 1994, between the
Company and Morgan Guaranty Trust Company of New York, as Trustee,
are filed herewith:
(1) Distribution Agreement, dated January 14, 1994, among the
Company, Goldman, Sachs & Co., and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
(4.1) Forms of Fixed Rate Note and Floating Rate Note.
(4.2) Paying, Calculation and Issuing Agent Appointment Letter,
dated January 14, 1994, between the Company and Morgan
Guaranty Trust Company of New York.
(4.3) Letter of Representations, dated January 14, 1994, among the
Company, Morgan Guaranty Trust Company of New York and The
Depository Trust Company.
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: January 14, 1994
CAPITAL HOLDING CORPORATION
By: /s/ Sherry F. Hardy
----------------------------
Sherry F. Hardy
Assistant General Counsel
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EXHIBIT PAGE
NUMBER EXHIBIT INDEX NUMBER
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(1) Distribution Agreement, dated January 14, 1994, among
the Company, Goldman, Sachs & Co., and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated.
(4.1) Forms of Fixed Rate Note and Floating Rate Note.
(4.2) Paying, Calculation and Issuing Agent Appointment Letter,
dated January 14, 1994, between the Company and Morgan
Guaranty Trust Company of New York.
(4.3) Letter of Representations, dated January 14, 1994, among
the Company, Morgan Guaranty Trust Company of New York
and The Depository Trust Company.
<PAGE>
EXHIBIT 1
CAPITAL HOLDING CORPORATION
$400,000,000
Medium-Term Notes, Series D
Distribution Agreement
----------------------
January 14, 1994
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner
& Smith Incorporated,
North Tower,
World Financial Center,
New York, New York 10281-1323.
Dear Sirs:
Capital Holding Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series D
(the "Securities") at an aggregate initial public offering price of up to
$400,000,000 and agrees with each of you (individually, an "Agent", and
collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation
by the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(which agreement may either be in writing, or the terms of which may be agreed
upon orally, with written confirmation prepared by the Agent and mailed or
transmitted to the Company, each a "Terms Agreement"), substantially in the form
of Annex I hereto, relating to such sale in accordance with Section 2(b) hereof.
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The Securities will be issued under the Indenture, dated as of January
1, 1994 (the "Indenture"), between the Company and Morgan Guaranty Trust Company
of New York, as Trustee (the "Trustee"). The Securities shall have the maturity
ranges, interest rates, if any, redemption provisions and other terms set forth
in the Prospectus referred to below as it may be amended or supplemented from
time to time. The Securities will be issued, and the terms and rights of
holders thereof established, from time to time by the Company in accordance with
the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) Two registration statements in respect of the Securities have been
filed with the Securities and Exchange Commission (the "Commission"); such
registration statements and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to such Agent and excluding
exhibits to such registration statements but including all documents
incorporated by reference in the prospectus relating to such debt securities
contained therein, have been declared effective by the Commission in such form;
no other document with respect to such registration statements or document
incorporated by reference therein has heretofore been filed or transmitted for
filing with the Commission; and no stop order suspending the effectiveness of
any such registration statement has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission (any preliminary
prospectus included in such registration statements or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), being hereinafter called a
"Preliminary Prospectus"; the various parts of such registration statements,
including all exhibits thereto and the documents incorporated by reference in
the prospectus contained in the registration statements at the time such part of
such registration statements became effective but excluding Form T-1, each as
amended at the time such part of the registration statements became effective,
being hereinafter collectively called the "Registration Statement"; the
prospectus (including the prospectus supplement) relating to the Securities, in
the form in which it has most recently been filed, or transmitted for filing,
with the Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"; any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference
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therein pursuant to the applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus,
including any supplement to the Prospectus that sets forth only the terms of the
particular issue of the Securities (a "Pricing Supplement"), shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; any reference to
any amendment to the Registration Statement shall be deemed to include any
annual report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any reference to
the Prospectus as amended or supplemented shall be deemed to refer to and
include the Prospectus as amended or supplemented (including by the applicable
Pricing Supplement filed in accordance with Section 4(a) hereof) in relation to
Securities sold pursuant to this Agreement, in the form in which it is filed
with the Commission pursuant to Rule 424(b) under the Act and in accordance with
Section 4(a) hereof, including any documents incorporated by reference therein
as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
- -------- -------
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company
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by any Agent expressly for use in the Prospectus as amended or supplemented to
relate to a particular issuance of Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date in the case of the Registration Statement
and any amendment thereto and as of the applicable filing date in the case of
the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
- -------- -------
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular issuance of
Securities;
(d) Neither the Company nor any of its Subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital stock
(except as a result of issuances relating to employee stock option or other
benefit plans of the Company) or long-term debt of the Company or any of its
Subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its Subsidiaries, otherwise than as set forth or contemplated in
the Prospectus (the term "Subsidiary" as used in this Agreement referring to
Commonwealth Life Insurance Company, Durham Life Insurance Company, CHC Durham
Corporation, First Deposit Corporation, National Home Life Assurance Company,
National Liberty Corporation, Peoples Security Life Insurance Company and any
other subsidiary of the Company
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that would constitute a "significant subsidiary" of the Company under Rule
1.02(v) of Regulation S-X under the Act);
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable; and all of the issued shares of capital stock of each Subsidiary
have been duly and validly authorized and issued, are fully paid and non-
assessable and (except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims;
(g) The Securities have been duly authorized, and, when Securities are
issued and delivered pursuant to this Agreement and any Terms Agreement, such
Securities will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture, which will be substantially in the form
incorporated by reference in the Prospectus; the Indenture has been duly
authorized, executed and delivered and duly qualified under the Trust Indenture
Act and constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Securities of any particular issuance of Securities
will conform, to the descriptions thereof in the Prospectus as amended or
supplemented to relate to such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by the Company
with all of the provisions of the Securities, the Indenture, this Agreement and
any Terms Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which
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<PAGE>
the Company or any of its Subsidiaries is bound nor will such action result in
any violation of the provisions of the Certificate of Incorporation, as amended,
or the By-Laws of the Company or any statute or any order, rule or regulation of
any such court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the solicitation of
offers to purchase Securities, the issue and sale of the Securities or the
consummation by the Company of the other transactions contemplated by this
Agreement, any Terms Agreement or the Indenture, except such as have been, or
will have been prior to the Commencement Date (as defined in Section 3 hereof),
obtained under the Act or the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities, insurance or Blue Sky laws in connection with the solicitation by
such Agent of offers to purchase Securities from the Company and with purchases
of Securities by such Agent as principal, as the case may be, in each case in
the manner contemplated hereby;
(i) There are no legal or governmental proceedings pending to which the
Company or any of its Subsidiaries is a party or of which any property of the
Company or any of its Subsidiaries is the subject, other than as set forth in
the Prospectus and other than litigation incident to the kind of business
conducted by the Company and its Subsidiaries which, in the judgment of the
Company, would not individually or in the aggregate have a material adverse
effect on the financial position, stockholders' equity or results of operations
of the Company and its Subsidiaries; to the best of the Company's knowledge no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others; the amounts accrued for taxes on the latest consolidated
statement of financial condition of the Company and its subsidiaries included or
incorporated by reference in the Prospectus are sufficient for the payment of
all federal, state, county and local taxes of the Company and its Subsidiaries,
whether or not disputed, which are properly accruable; and all federal, state,
county and local taxes due and payable by the Company, any of its Subsidiaries
or Capital Liberty, L.P. have been paid or adequate provision has been made for
such payment;
(j) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate amount of Securities which shall
have been issued
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and sold by the Company hereunder or under any Terms Agreement and of any debt
securities of the Company (other than such Securities) that shall have been
issued and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration Statement; and
(k) Ernst & Young, who have certified certain financial statements of
the Company and its subsidiaries, are independent certified public accountants
as required by the Act and the rules and regulations of the Commission
thereunder.
2. (a) On the basis of the representations and warranties, and subject
to the terms and conditions herein set forth, each of the Agents hereby
severally and not jointly agrees, as agent of the Company, to use its reasonable
efforts to solicit and receive offers to purchase the Securities from the
Company upon the terms and conditions set forth in the Prospectus as amended or
supplemented from time to time. So long as the provisions of this Agreement
relating to the solicitation of offers to purchase Securities from the Company
shall not have been terminated pursuant to Section 10 with respect to any Agent,
the Company shall not, without the consent of such Agent, solicit or accept
offers to purchase, or sell, any debt securities with a maturity at the time of
original issuance of 9 months or more except pursuant to this Agreement or any
Terms Agreement or except pursuant to a private placement not constituting a
public offering under the Act or except in connection with a firm commitment
underwriting pursuant to an underwriting agreement that does not provide for a
continuous offering of medium-term debt securities. However, (i) the Company
reserves the right to sell, and may solicit and accept offers to purchase,
Securities directly on its own behalf, and, in the case of any such sale not
resulting from a solicitation made by any Agent, no commission will be payable
with respect to such sale; and (ii) the Company shall have the right at any time
to request the Agents to execute, prior to the date fifteen business days after
such request, an amendment to this Agreement to provide for another person as an
Agent hereunder on substantially the same terms as the Agents hereunder on the
date of such request and each Agent shall have the right either to execute such
amendment or to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company pursuant to
Section 10 with respect to such Agent. These provisions shall not
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limit Section 4(f) hereof or any similar provision included in any Terms
Agreement.
Procedural details relating to the issue and delivery of Securities, the
solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agents and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each Agent and
the Company agree to perform the respective duties and obligations specifically
provided to be performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative Procedure as
from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agents will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
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<PAGE>
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities Sold)
------------------- -------------------
From 9 months to less than 1 year ................ .125%
From 1 year to less than 18 months................ .150%
From 18 months to less than 2 years............... .200%
From 2 years to less than 3 years................. .250%
From 3 years to less than 4 years................. .350%
From 4 years to less than 5 years................. .450%
From 5 years to less than 6 years................. .500%
From 6 years to less than 7 years................. .550%
From 7 years to less than 10 years................ .600%
From 10 years to less than 15 years............... .625%
From 15 years to less than 20 years............... .675%
20 years and more................................. .750%
(b) Each sale of Securities to any Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement which will provide for the sale
of such Securities to, and the purchase thereof by, such Agent. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Securities by such Agent. The commitment of any Agent to purchase Securities as
principal, whether pursuant to any Terms Agreement or otherwise, shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth. Each Terms Agreement shall specify the principal amount of
Securities to be purchased by any Agent pursuant thereto, the price to be paid
to the Company for such Securities, any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the reoffering of
the Securities and the time and date and place of delivery of and payment for
such Securities. Such Terms Agreement shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to an Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a commission (or grant an equivalent discount) as
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provided in Section 2(a) hereof and in accordance with the schedule set forth
therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedure, is referred to herein as a "Time
of Delivery".
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency (or, if such Security
is denominated in a composite currency, in any country issuing a currency
comprising a portion of such composite currency), except as permitted by
applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof
on the Commencement Date (as defined below) shall be delivered to the Agents at
the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York, at
11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agents and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall be
disapproved by any Agent promptly after reasonable notice thereof or (B) after
the date of any Terms Agreement or other agreement by an Agent to purchase
Securities as principal and prior to the related Time of Delivery which shall be
disapproved by any Agent party to such Terms Agreement or so purchasing as
principal promptly after reasonable notice thereof; (ii) to prepare, with
respect to any Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a form
previously approved by such Agent and to file such Pricing Supplement pursuant
to Rule 424(b)(3) under the Act not
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later than the close of business of the Commission on the fifth business day
after the date on which such Pricing Supplement is first used; (iii) to make no
amendment or supplement to the Registration Statement or Prospectus, other than
any Pricing Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment on it; (iv) to file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and during such same
period to advise such Agent, promptly after the Company receives notice thereof,
of the time when any amendment to the Registration Statement has been filed or
has become effective or any supplement to the Prospectus or any amended
Prospectus (other than any Pricing Supplement that relates to Securities not
purchased through or by such Agent) has been filed with, or mailed for filing
to, the Commission, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amendment or supplement of the Registration Statement or Prospectus or for
additional information; and (v) in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any prospectus
relating to the Securities or suspending any such qualification, to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as such Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution or sale of the
Securities; provided, however, that in connection therewith the Company shall
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not be required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement and
each amendment thereto, with copies of the Prospectus as each time amended or
supplemented, other than any Pricing Supplement (except as provided in the
Administrative Procedure), in the form in
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which it is filed with the Commission pursuant to Rule 424 under the Act, and
with copies of the documents incorporated by reference therein, all in such
quantities as such Agent may reasonably request from time to time; and, if the
delivery of a prospectus is required at any time in connection with the offering
or sale of the Securities (including Securities purchased from the Company by
such Agent as principal) and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify such Agent and request such
Agent, in its capacity as agent of the Company, to suspend solicitation of
offers to purchase Securities from the Company (and, if so notified, such Agent
shall cease such solicitations as soon as practicable, but in any event not
later than one business day later); and if the Company shall decide to amend or
supplement the Registration Statement or the Prospectus as then amended or
supplemented, to so advise such Agent promptly by telephone (with confirmation
in writing) and to prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or the Prospectus as then
amended or supplemented that will correct such statement or omission or effect
such compliance; provided, however, that if during such same period such Agent
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continues to own Securities purchased from the Company by such Agent as
principal or such Agent is otherwise required to deliver a prospectus in respect
of transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after (i) the
effective date of the Registration Statement (as defined in Rule 158(c)), (ii)
the effective date of each post-effective amendment to the Registration
Statement, and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K that is incorporated by reference in the
Registration Statement, an earning statement of the Company and its subsidiaries
(which need not be audited) complying with
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Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to such Agent
copies of all reports or other communications (financial or other) furnished to
stockholders, and deliver to such Agent (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as such Agent may from time to
time reasonably request (such financial statements to be on a consolidated basis
to the extent the accounts of the Company and its subsidiaries are consolidated
in reports furnished to its stockholders generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or other
agreement by such Agent to purchase Securities as principal and continuing to
and including the earlier of (i) the termination of the trading restrictions for
the Securities purchased thereunder, as notified to the Company by such Agent
and (ii) the related Time of Delivery, the Company will not, without the prior
written consent of such Agent, offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company which both mature more than 9
months after such Time of Delivery and are substantially similar to the
Securities;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal not
pursuant to a Terms Agreement), and each execution and delivery by the Company
of a Terms Agreement with such Agent, shall be deemed to be an affirmation to
such Agent that the representations and warranties of the Company contained in
or made pursuant to this Agreement are true and correct as of the date of such
acceptance or of such Terms Agreement, as the case may be, as though made at and
as of such date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Securities relating
to such acceptance or as of the Time of Delivery relating to such sale, as the
case may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Securities);
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<PAGE>
(h) That reasonably in advance of each time the Registration Statement
or the Prospectus shall be amended or supplemented (other than by a Pricing
Supplement) and each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement and such
Terms Agreement specifies the delivery of an opinion or opinions by Sullivan &
Cromwell, counsel to the Agents, as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish to such counsel such
papers and information as they may reasonably request to enable them to furnish
to such Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus and each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of an opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or cause
to be furnished forthwith to such Agent a written opinion of Stites & Harbison,
counsel for the Company, or other counsel for the Company satisfactory to such
Agent, dated the date of such amendment, supplement or incorporation or the Time
of Delivery relating to such sale, as the case may be, in form satisfactory to
such Agent, to the effect that such Agent may rely on the opinion of such
counsel referred to in Section 6(c) hereof which was last furnished to such
Agent to the same extent as though it were dated the date of such letter
authorizing reliance (except that the statements in such last opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such opinion, an opinion of the same
tenor as the opinion of such counsel referred to in Section 6(c) hereof but
modified to relate to the Registration Statement and the Prospectus as amended
and supplemented to such date;
(j) That each time the Company files an annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement and such
Terms Agreement specifies the delivery of an opinion under this Section 4(j) as
a condition to the purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish
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<PAGE>
or cause to be furnished forthwith to such Agent a written opinion of the
General Counsel of the Company in form and substance satisfactory to such Agent,
dated the date of such filing or the Time of Delivery relating to such sale, as
the case may be, in form satisfactory to such Agent, to the effect that such
Agent may rely on the opinion of such counsel referred to in Section 6(d) hereof
which was last furnished to such Agent to the same extent as though it were
dated the date of such letter authorizing reliance;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus, in either
case to set forth financial information included in or derived from the
Company's consolidated financial statements or accounting records, and each time
the Company sells Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of a letter under this
Section 4(k) as a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall cause the independent certified public accountants
who have audited the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement to furnish
such Agent a letter, dated the date of such amendment, supplement or
incorporation or the Time of Delivery relating to such sale, as the case may be,
and furnished no later than the date (the "Comfort Letter Delivery Date") that
is five business days after the date of such amendment, supplement or
incorporation or at such Time of Delivery, as the case may be, in form
satisfactory to such Agent, of the same tenor as the letter referred to in
Section 6(e) hereof but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date of such letter, with such
changes as may be necessary to reflect changes in the financial statements and
other information derived from the accounting records of the Company, to the
extent such financial statements and other information are available as of a
date not more than five business days prior to the date of such letter;
provided, however, that, with respect to any financial information or other
- -------- -------
matter, such letter may reconfirm as true and correct at such date as though
made at and as of such date, rather than repeat, statements with respect to such
financial information or other matter made in the letter referred to in Section
6(e) hereof which was last furnished to such Agent;
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<PAGE>
(l) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus, and each time the Company sells Securities to such Agent as
principal and the applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(l) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a certificate, dated the date of such
supplement, amendment or incorporation or the Time of Delivery relating to such
sale, as the case may be, in such form and executed by such officers of the
Company as shall be satisfactory to such Agent, to the effect that the
statements contained in the certificates referred to in Section 6(h) hereof
which were last furnished to such Agent are true and correct at such date as
though made at and as of such date (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate, certificates of the
same tenor as the certificates referred to in said Section 6(h) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date; and
(m) To offer to any person who has agreed to purchase Securities as the
result of an offer to purchase solicited by such Agent the right to refuse to
purchase and pay for such Securities if, on the related settlement date fixed
pursuant to the Administrative Procedure, any condition set forth in Section
6(a), 6(f) or 6(g) hereof shall not have been satisfied (it being understood
that the judgment of such person with respect to the impracticability or
inadvisability of such purchase of Securities shall be substituted, for purposes
of this Section 4(m), for the respective judgments of an Agent with respect to
certain matters referred to in such Sections 6(a), 6(f) and 6(g), and that such
Agent shall have no duty or obligation whatsoever to exercise the judgment
permitted under such Sections 6(a), 6(f) and 6(g) on behalf of any such person).
5. The Company covenants and agrees with each Agent that the Company
will pay or cause to be paid the following: (i) the fees and expenses of the
Company's counsel and accountants in connection with the registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the
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<PAGE>
Prospectus and any Pricing Supplements and all other amendments and supplements
thereto and the mailing and delivering of copies thereof to such Agent; (ii) the
reasonable fees and reasonable expenses of counsel for the Agents in connection
with the establishment of the program contemplated hereby, any opinions to be
rendered by such counsel hereunder and the transactions contemplated hereunder;
(iii) the cost of printing, preparing by word processor or reproducing this
Agreement, any Terms Agreement, the Indenture, any Blue Sky and Legal Investment
Memoranda and any other documents in connection with the offering, purchase,
sale and delivery of the Securities; (iv) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 4(b) hereof, including fees and disbursements of
counsel for the Agents in connection with such qualification and in connection
with the Blue Sky and legal investment surveys; (v) any fees charged by
securities rating services for rating the Securities; (vi) any filing fees
incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vii) the cost of
preparing, and providing any CUSIP or other identification numbers for, the
Securities; (viii) the fees and expenses of the Trustee and any agent of the
Trustee and any transfer or paying agent of the Company and the fees and
disbursements of counsel for any Trustee or such agent in connection with any
Indenture and the Securities; (ix) the fees and expenses of any Depositary (as
defined in the Indenture) and any nominees thereof in connection with the
Securities; (x) any advertising expenses connected with the solicitation of
offers to purchase and the sale of Securities so long as such advertising
expenses have been approved in advance by the Company; and (xi) all other costs
and expenses incident to the performance of the Company's obligations hereunder
which are not otherwise specifically provided for in this Section. Except as
provided in Sections 7 and 8 hereof, each Agent shall pay all other expenses it
incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated in such Terms Agreement by
reference) are true and correct at and as of the Commencement Date and any
applicable date referred to in
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Section 4(l) hereof that is prior to such Solicitation Time or Time of Delivery,
as the case may be, and at and as of such Solicitation Time or Time of Delivery,
as the case may be, the condition that prior to such Solicitation Time or Time
of Delivery, as the case may be, the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the Pricing Supplement) with respect
to such Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; (ii) no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or threatened
by the Commission; and (iii) all requests for additional information on the
part of the Commission shall have been complied with to the reasonable
satisfaction of such Agent;
(b) Sullivan & Cromwell, counsel to the Agents, shall have furnished
to such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to this agreement, the incorporation of the Company, the
validity of the Indenture, the Securities, the Registration Statement, the
Prospectus as amended or supplemented and other related matters as such
Agent may reasonably request, and (ii) if and to the extent requested by
such Agent, with respect to each applicable date referred to in Section
4(h) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, an opinion or opinions, dated such applicable
date, to the effect that such Agent may rely on the opinion or opinions
which were last furnished to such Agent pursuant to this Section 6(b) to
the same extent as though it or they were dated the date of such letter
authorizing reliance (except that the statements in such last opinion or
opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to
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<PAGE>
such date) or, in any case, in lieu of such an opinion or opinions, an
opinion or opinions of the same tenor as the opinion or opinions referred
to in clause (i) but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date; and in each case
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Stites & Harbison, counsel for the Company, or other counsel for
the Company satisfactory to such Agent, shall have furnished to such Agent
their written opinions, dated the Commencement Date and each applicable
date referred to in Section 4(i) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, in form and
substance satisfactory to such Agent, to the effect that (such counsel
being entitled to (x) rely in respect of the opinions in clause (iv) below
upon opinions of local counsel and in respect of any matters of fact upon
certificates of officers of the Company and its Subsidiaries and of public
officials, provided that such counsel shall state that they believe that
both the Agents and they are justified in relying upon such opinions and
certificates and (y) state in respect of the opinion in clause (viii) below
that they have assumed that at the time of the issuance, sale and delivery
of each Security the authorization of the Securities will not have been
modified or rescinded and there will not have occurred any change in law
affecting the validity or legally binding character of the Securities and
that they have also assumed that neither the issuance, sale and delivery of
any Security, nor any of the terms of such Security nor the compliance by
the Company with such terms will violate any applicable law, instrument or
agreement then binding upon the Company, or any restriction imposed by any
court or governmental body having jurisdiction over the Company):
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its
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<PAGE>
business as described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(iii) The Company 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;
(iv) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification and as to which failure to be so qualified would subject
such Subsidiary to any material liability or disability; and each
Subsidiary has all necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental
regulatory officials and bodies (including, without limitation, each
insurance commission having jurisdiction over any insurance
Subsidiary) to own or lease its properties and to conduct its business
as described in the Prospectus;
(v) All of the issued shares of capital stock of each Subsidiary
have been duly and validly authorized and issued, are fully paid and
nonassessable, and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(vi) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property
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<PAGE>
of the Company or any of its Subsidiaries is the subject, other than
as set forth in the Prospectus and other than litigation incident to
the kind of business conducted by the Company and its Subsidiaries,
which, in the opinion of such counsel, individually and in the
aggregate is not material to the Company and its Subsidiaries; to the
best of such counsels' knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
and, to the best of such counsel's knowledge, the Company, its
Subsidiaries and Capital Liberty, L.P. are in substantial compliance
with all applicable federal and state tax statutes, regulations and
official rulings and interpretations;
(vii) This Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company;
(viii) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company, will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; and the Indenture
conforms and the Securities will conform to the descriptions thereof
in the Prospectus as amended or supplemented;
(ix) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Indenture has been duly qualified under the Trust
Indenture Act;
(x) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture,
this Agreement and any applicable Terms Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default
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<PAGE>
under, (a) any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which the
Company is a party or by which the Company is bound or (b) any
indenture, mortgage, deed of trust, loan agreement, financing
agreement or instrument, lease or agreement relating to an acquisition
or divestiture known to such counsel to which any of the Subsidiaries
is a party or by which any of the Subsidiaries is bound, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation, as amended, of the Company or the By-Laws of the
Company or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of
their properties;
(xi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the solicitation of offers to purchase Securities, the
issue and sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any applicable
Terms Agreement or the Indenture, except such as have been obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities, insurance or Blue Sky laws in
connection with the solicitation by the Agents of offers to purchase
Securities from the Company and with purchases of Securities by an
Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(xii) The documents incorporated by reference in the Prospectus
or any amendment or supplement thereto (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when they became effective or
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<PAGE>
were so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act, an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or, in the case of other documents which were
filed under the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading; and
(xiii) The Registration Statement and the Prospectus as amended
and supplemented and any further amendments and supplements thereto
made by the Company prior to the date of such opinion (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; they have no reason to
believe that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Company prior to the date of
such opinion (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the date of such
opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of the date of such opinion, either the Registration Statement or the
Prospectus as amended or supplemented or any amendment or supplement
thereto made by the Company prior to the date of such opinion (other
than the financial statements and related
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<PAGE>
schedules therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they
were made, not misleading; and they do not know of any amendment to
the Registration Statement required to be filed or any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by reference
into the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as amended
or supplemented which are not filed or incorporated by reference or
described as required;
(d) The General Counsel of the Company, shall have furnished to you
his written opinions, dated the Commencement Date and each applicable date
referred to in Section 4(j) hereof that is on or prior to such Solicitation
Time or Time of Delivery, as the case may be, in form and substance
satisfactory to such Agent, to the effect that the issue and sale of the
Securities, the compliance by the Company with all of the provisions of the
Securities, the Indenture, this Agreement and any applicable Terms
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to him to which any of the Subsidiaries is a party or by
which any of the Subsidiaries is bound (such counsel being entitled to rely
in respect of any matters of fact upon certificates of officers of the
Subsidiaries and of public officials, provided that such counsel shall
state that he believes that both such Agent and he are justified in relying
upon such certificates);
(e) (i) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each Comfort Letter Delivery Date or Time of
Delivery referred to in Section 4(k) hereof that is on or prior to such
Solicitation Time or Time of
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<PAGE>
Delivery, as the case may be, the independent certified public accountants
who have certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration
Statement shall have furnished to such Agent a letter, dated the
Commencement Date or the related applicable date referred to in Section
4(k), as the case may be, and (ii) if such Solicitation Time is on or after
any applicable date referred to in Section 4(k) but prior to the related
Comfort Letter Delivery Date, such accountants shall have furnished to such
Agent a letter, dated such applicable date, such letters being, in any such
case described in clause (i) or (ii), in form and substance satisfactory to
such Agent, to the effect set forth in Annex III hereto;
(f) (i) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented and (ii) since the respective dates as of which information is
given in the Prospectus as amended or supplemented there shall not have
been any change in the capital stock or long-term debt of the Company on a
consolidated basis or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its Subsidiaries, otherwise than as set forth or contemplated
in the Prospectus as amended or supplemented, the effect of which, in any
such case described in clause (i) or (ii), is in the judgment of such Agent
so material and adverse as to make it impracticable or inadvisable to
proceed with the solicitation by such Agent of offers to purchase
Securities from the Company or the purchase by such Agent of Securities
from the Company as principal, as the case may be, on the terms and
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<PAGE>
in the manner contemplated in the Prospectus as amended or supplemented;
(g) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities of the Company
in particular or securities generally on the New York Stock Exchange; (ii)
a general moratorium on commercial banking activities in New York declared
by either Federal or New York State authorities; (iii) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iii) in the judgment of such Agent makes it
impracticable or inadvisable to proceed with the solicitation of offers to
purchase Securities or the purchase of Securities from the Company as
principal, pursuant to the applicable Terms Agreement or otherwise, as the
case may be, on the terms and in the manner contemplated in the Prospectus
as amended or supplemented; (iv) any downgrading in the rating accorded the
Company's debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act; or (v) any such "nationally recognized
statistical rating organization" shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities; and
(h) The Company shall have furnished or caused to be furnished to
such Agent certificates of officers of the Company dated the Commencement
Date and each applicable date referred to in Section 4(l) hereof that is on
or prior to such Solicitation Time or Time of Delivery, as the case may be,
in such form and executed by such officers of the Company as shall be
satisfactory to such Agent, as to the accuracy of the representations and
warranties of the Company herein at and as of the Commencement Date or such
applicable date, as the case may be, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to the
Commencement Date or such applicable date, as the case may be, as to the
matters set forth in subsections (a) and (f)
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<PAGE>
of this Section 6, and as to such other matters as such Agent may
reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Agent for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
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the Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration
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<PAGE>
Statement, the Prospectus, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. The indemnifying party shall not be required to
indemnify the indemnified party for any amount paid or payable by the
indemnified party in the settlement of any action, proceeding or investigation
without the written consent of the indemnifying party, which consent shall not
be unreasonably withheld.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such
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<PAGE>
losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and each Agent on the other from the offering of the
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
each Agent on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and each Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from the
sale of such Securities (before deducting expenses) received by the Company bear
to the total commissions or discounts received by such Agent in respect thereof.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by any Agent on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and each Agent agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by per capita allocation (even if all Agents were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), an Agent shall not be
required to contribute any amount in excess of the amount by which the total
public offering price at which the Securities purchased by or through it were
sold exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of
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<PAGE>
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of each of the
Agents under this subsection (d) to contribute are several in proportion to the
respective purchases made by or through it to which such loss, claim, damage or
liability (or action in respect thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Agent within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act; and the obligations of each Agent under this Section 7 shall be in addition
to any liability which such Agent may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise) is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent and the Company set forth in or made pursuant
to this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof)
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<PAGE>
made by or on behalf of any Agent or any controlling person of any Agent or the
Company, or any officer or director or any controlling person of the Company,
and shall survive each delivery of and payment for any of the Securities.
Anything herein to the contrary notwithstanding, the indemnity agreement
of the Company in subsection (a) of Section 7 hereof, the representations and
warranties in subsections (b), (c) and (d) of Section 1 hereof and any
representation or warranty as to the accuracy of the Registration Statement, the
Prospectus or any amendment or supplement thereto contained in any certificate
furnished by the Company pursuant to Section 6 hereof, insofar as they may
constitute a basis for indemnification for liabilities (other than payment by
the Company of expenses incurred or paid in the successful defense of any
action, suit or proceeding) arising under the Act, shall not extend to the
extent of any interest therein of a controlling person or partner of an Agent
who is a director, officer or controlling person of the Company when and after
the Registration Statement has become effective, except in each case to the
extent that an interest of such character shall have been determined by a court
of appropriate jurisdiction as not against public policy as expressed in the
Act. Unless in the opinion of counsel for the Company the matter has been
settled by controlling precedent, the Company will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question whether such interest is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Sec-
-31-
<PAGE>
tion 2(a), Section 4(d), Section 4(e), Section 5, Section 7, Section 8 and
Section 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Facsimile Transmission No. (212) 902-4103,
Attention: Registration Department, and if to Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated shall be sufficient in all respects
when delivered or sent by telex, facsimile transmission or registered mail to
World Financial Center, North Tower, New York, New York 10281, Facsimile
Transmission No. (212) 449-2239, Attention: [Pat Hannon], MTN Product
Management and if to the Company shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to it at its
address set forth in the Prospectus.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Section 7, Section 8 and Section 9 hereof, the officers and
directors of the Company and any person who controls any Agent or the Company,
and their respective personal representatives, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any Agent hereunder shall be deemed a successor or assign by reason of
such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
office of the Commission in Washington, D.C. is open for business.
14. This Agreement and any Terms Agreement shall be governed by, and
----------------------------------------------------------------
construed in accordance with, the laws of the State of New York.
- ---------------------------------------------------------------
15. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
CAPITAL HOLDING CORPORATION
By: /s/ Sherry F. Hardy
__________________________
Sherry F. Hardy
Assistant General Counsel
Accepted in New York, New York,
as of the date hereof:
/s/ Goldman, Sachs & Co.
_____________________________________
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Scott Primrose
_____________________________
Authorized Signatory
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<PAGE>
ANNEX I
-------
CAPITAL HOLDING CORPORATION
[Title of Security]
Terms Agreement
---------------
............, 19..
[Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.]
[Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
North Tower,
World Financial Center,
New York, New York 10281-1323]
Dear Sirs:
Capital Holding Corporation (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated
January 14, 1994 (the "Distribution Agreement"), between the Company on the one
hand and Goldman, Sachs & Co. and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Agents") on the other, to issue and sell to
[Goldman, Sachs & Co.] [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated] the securities specified in the Schedule hereto (the
"Purchased Securities"). Each of the provisions of the Distribution Agreement
not specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto an
agent of the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of
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<PAGE>
this Terms Agreement, except that each representation and warranty in Section 1
of the Distribution Agreement which makes reference to the Prospectus shall be
deemed to be a representation and warranty as of the date of the Distribution
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Terms Agreement in relation
to the Prospectus as amended and supplemented to relate to the Purchased
Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Goldman, Sachs & Co.] [Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated] and [Goldman, Sachs & Co.] [Merrill Lynch,
Pierce, Fenner & Smith Incorporated] agree[s] to purchase from the Company the
Purchased Securities, at the time and place, in the principal amount and at the
purchase price set forth in the Schedule hereto.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us ...... counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
CAPITAL HOLDING CORPORATION
By:........................
([Title])
Accepted:
[..................................
(Goldman, Sachs & Co.)]
[MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:...........................
([Title])]
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<PAGE>
Schedule to Annex I
Title of Purchased Securities:
[[ %] Medium-Term Notes]
Aggregate Principal Amount:
[$ or units of other Specified Currency]
[Price to Public:]
Purchase Price by [Goldman, Sachs & Co.]
[Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated]:
% of the principal amount of the Purchased Securities[, plus accrued
interest from to ][and accrued amortization, if any,
from to ]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of the
Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next day]
[immediately available] funds]]
Indenture:
Indenture, dated as of January ___, 1994, between the Company and Morgan
Guaranty Trust Company of New York, as Trustee
Time of Delivery:
Closing Location:
Maturity:
I-4
<PAGE>
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates]
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the
Agents referred to in Section 4(h).]
[(2) The opinion of counsel to the Company
referred to in Section 4(i).]
[(3) The opinion of the General Counsel of the
Company referred to in Section 4(j).]
[(4) The accountants' letter referred to in
Section 4(k).]
[(5) The officers' certificate referred to in
Section 4(l).]
Other Provisions:
I-5
<PAGE>
ANNEX II
CAPITAL HOLDING CORPORATION
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated January 14, 1994 (the "Distribution Agreement"),
between Capital Holding Corporation (the "Company") and Goldman, Sachs & Co. and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
(together, the "Agents"), to which this Administrative Procedure is attached as
Annex II. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented or the Indenture. To the extent any procedure set forth
below conflicts with the provisions of the Securities, the Indenture or the
Distribution Agreement, the relevant provisions of the Securities, the Indenture
and the Distribution Agreement shall control.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. Part I describes procedures of general
applicability with respect to such Securities. Part II below describes
procedures specifically and exclusively applicable (any procedure in Part I
below to the contrary notwithstanding) to such Securities which are either
Permanent Global Securities or Book-Entry Securities (each as defined below).
The terms and settlement details related to a purchase of Securities by an
Agent, as principal, from the Company will be set forth in a Terms Agreement
pursuant to the Distribution Agreement, unless the Company and such Agent
otherwise agree as provided in Section 2(b) of the Distribution Agreement, in
which case the procedures to be followed in respect of the settlement of such
sale will be as set forth below. An Agent, in relation to a purchase of a
Security by a purchaser solicited by such Agent, is referred to herein as the
"Selling Agent" and, in relation to a purchase of a Security by such Agent as
principal other than pursuant to a Terms Agreement, as the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
initially represented by either a
II-1
<PAGE>
permanent global certificate (a "Global Certificate") delivered to the Trustee,
as agent for The Depository Trust Company, New York, New York (the
"Depositary"), or a certificate (a "Definitive Certificate") delivered to a
person designated by an Agent. Each security which is represented by a Global
Certificate is referred to herein as a "Book-Entry Security" (it being
understood that only such Global Certificate -- and not any such Book-Entry
Security represented thereby -- constitutes a "Security" under the Indenture).
Pursuant to Sections 301 and 1002 of the Indenture, the Company has
appointed Morgan Guaranty Trust Company of New York ("Morgan Guaranty") as
Paying Agent (the "Paying Agent") and as Calculation Agent (the "Calculation
Agent") for the Securities. Pursuant to Section 614 of the Indenture, the
Trustee has appointed Morgan Guaranty as Authenticating Agent (the
"Authenticating Agent") with respect to the Securities. In addition, the
Company has appointed Morgan Guaranty as its agent (the "Issuing Agent") in
connection with certain procedures to be followed with respect to the settlement
of sales of Securities as set forth in this Administrative Procedure.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Posting Rates by Company:
- ------------------------
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Securities that may be
sold as a result of the solicitation of offers by an Agent. The Company may
establish a fixed set of interest rates and maturities for an offering period
("posting"). If the Company decides to change already posted rates, it will
promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by Company:
- -------------------------------
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Securities, other than
those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it in whole or in part. Each Agent also
may make offers to the Company to purchase Securities as a Purchasing Agent.
The Company will have the sole right to accept offers to purchase Securities and
may reject any such offer in whole or in part.
II-2
<PAGE>
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Securities. If the Company accepts an offer to purchase Securities, it will
confirm such acceptance in writing to the Selling Agent or Purchasing Agent, as
the case may be, and the Issuing Agent.
Communication of Sale Information
to Company by Selling Agent:
- ---------------------------------
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal amount of Securities to be purchased;
(2) If a Fixed Rate Security, the interest rate;
(3) The Interest Payment Date on a Fixed Rate Security, if other than
March 15 and September 15 of each year and at Maturity;
(4) The Regular Record Date on a Fixed Rate Note, if other than the
September 1 and March 1 (whether or not a Business Day), as the
case may be, next preceding the September 15 and March 15
Interest Payment Dates;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(7) Issue Price;
(8) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(9) Net proceeds to the Company;
(10) Settlement Date;
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<PAGE>
(11) If a redeemable Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of the
Redemption Commencement Date.
(12) If a Floating Rate Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner; and
(14) Denomination of certificates to be delivered at settlement.
Preparation of Pricing Supplement by Company:
- --------------------------------------------
If the Company accepts an offer to purchase a Security, it will prepare
a Pricing Supplement. The Company will supply at least ten copies of such
Pricing Supplement to the Selling Agent or Purchasing Agent, as the case may be,
not later than 5:00 p.m., New York City time, on the business day following the
date of acceptance of such offer, or if the Company and the purchaser agree to
settlement on the date of such acceptance, not later than noon, New York City
time, on such date. The Company will arrange to have ten Pricing Supplements
filed with the Commission not later than the close of business of the Commission
on the fifth business day following the date on which such Pricing
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<PAGE>
Supplement is first used. One copy of such filed document will be sent by
telecopy or overnight express (for delivery not later than 11:00 A.M. on the
Business Day next following the trade date) to the Agents at the following
applicable address: if to Goldman, Sachs & Co., to Don Henson, Registration
Department, Goldman, Sachs & Co., 85 Broad Street, 21st Floor, New York, New
York 10004; if to Merrill Lynch, to Tritech Services, #4 Corporate Place,
Corporate Park 287, Piscataway, New Jersey 08854, telecopy 908-878-6530,
Attention: Nachman Kimerling, Final Prospectus Unit. For record keeping
purposes, one copy of each Pricing Supplement shall also be mailed or telecopied
to the Agents at the following addresses: Don Henson, Registration Department,
Goldman, Sachs & Co., 85 Broad Street, 21st Floor, New York, New York 10004;
Product Management - MTNs, Merrill Lynch & Co., Merrill Lynch World
Headquarters, World Financial Center, North Tower, 23rd Floor, New York, New
York 10281-1323.
Delivery of Confirmation and
Prospectus to Purchaser by Selling Agent:
- ----------------------------------------
The Selling Agent will deliver to the purchaser of a Security a written
confirmation of the sale and delivery and payment instructions. In addition,
the Selling Agent will deliver to such purchaser or its agent the Prospectus as
amended or supplemented (including the Pricing Supplement) in relation to such
Security prior to or together with the earlier of the delivery to such purchaser
or its agent of (a) the confirmation of sale (including, in the case of a Book-
Entry Security, the confirmation through the Depositary's Institutional Delivery
System) or (b) the Security.
Date of Settlement:
- ------------------
All offers solicited by a Selling Agent or made by a Purchasing Agent
and accepted by the Company will be settled on a date (the "Settlement Date" or
"Original Issue Date") which is the fifth business day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on any other business day after the acceptance of such offer or
(b) with respect to an offer accepted by the Company prior to 10:00 a.m., New
York City time, on the date of such acceptance.
II-5
<PAGE>
Instruction from the Company to
Issuing Agent for Preparation of Securities:
- -------------------------------------------
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Issuing Agent by telephone (confirmed in writing) or by
facsimile transmission or other acceptable written means.
The Company will instruct the Authenticating Agent by facsimile
transmission or other acceptable written means to authenticate and deliver the
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 2:00 p.m., New York City
time, on the second business day prior to the Settlement Date unless, in the
case of Securities evidenced by a Definitive Certificate, the Settlement Date is
the date of acceptance by the Company of the offer to purchase such Securities
in which case such instruction will be given by the Company by 11:00 a.m., New
York City time. The Authenticating Agent will authenticate and deliver to the
Issuing Agent each Security in accordance with the Company's instruction.
Preparation and Delivery of Securities
by Issuing Agent and Receipt of Payment Therefor:
- ------------------------------------------------
The Issuing Agent will prepare each Security and appropriate receipts
that will serve as the documentary control of the transaction.
In the case of a sale of Securities to a purchaser solicited by an
Agent, the Issuing Agent will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Securities to the Selling Agent for the benefit of
the purchaser of such Securities against delivery by the Selling Agent of a
receipt therefor. On the Settlement Date the Selling Agent will deliver payment
for such Securities in immediately available funds to the Company in an amount
equal to the issue price of the Securities less the Selling Agent's commission;
provided that the Selling Agent reserves the right to withhold payment for which
it has not received funds from the purchaser. The Company shall not use any
proceeds advanced by a Selling Agent to purchase securities or carry any
securities in violation of Regulations G, T, U or X of the Federal Reserve Board
or otherwise in violation of law.
In the case of a sale of Securities to a Purchasing Agent, the Issuing
Agent will, by 2:15 p.m., New
II-6
<PAGE>
York City time, on the Settlement Date, deliver the Securities to the Purchasing
Agent against delivery by the Purchasing Agent of a receipt therefor. On the
Settlement Date the Purchasing Agent will deliver payment for such Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Securities less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
- -----------------------------------------
If a purchaser (other than a Purchasing Agent) fails to make payment to
the Selling Agent for a Security, the Selling Agent will promptly notify the
Authenticating Agent and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Security to the Issuing Agent. Immediately
upon receipt of such Security by the Issuing Agent, the Company will return to
the Selling Agent an amount equal to the amount previously paid to the Company
in respect of such Security. The Company will reimburse the Selling Agent on an
equitable basis for its loss of the use of funds during the period when they
were credited to the account of the Company.
The Issuing Agent will deliver to the Trustee for cancellation the
Security in respect of which the failure occurred, instruct the Trustee to make
appropriate entries in its records and, unless otherwise instructed by the
Company, to destroy the Security.
PART II: PROCEDURES APPLICABLE TO BOOK-ENTRY
SECURITIES AND GLOBAL SECURITIES
In connection with the qualification of Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Issuing
Agent, the Authenticating Agent and the Paying Agent will perform the custodial,
document control and administrative functions described below, in accordance
with their respective obligations under a Letter of Representations from the
Company and Morgan Guaranty, as Issuing Agent and Paying Agent, to the
Depositary, dated January__, 1994, and a Medium-Term Note Certificate Agreement,
dated April 18, 1989, between Morgan Guaranty and the Depositary (the
"Certificate Agreement"), and the obligations of Morgan Guaranty as a
participant in the Depositary, including the Depositary's Same-Day Funds
Settlement System ("SDFS"). It is understood that the ownership interests of
purchasers of Book-Entry Securities will be credited to the book-entry
II-7
<PAGE>
accounts of one or more participants in the Depositary (each a "Participant") in
accordance with the Depositary's customary practices and reflected in the
records of such Participants or one or more indirect participants in the
Depositary designated by such purchasers in accordance with the arrangements
between such purchasers and such Participants and indirect participants. As
used in this Part II, the term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in The City of New York are authorized or obligated by law or executive order to
close.
Issuance: All Fixed Rate Securities which are Book-Entry Securities
and have the same Original Issue Date, redemption
provisions, Interest Payment Dates, interest rate,
interest payment periods, Specified Currency and Stated
Maturity (collectively, the "Fixed Rate Terms") will be
represented initially by a single Global Certificate in
fully registered form without coupons; all Floating Rate
Securities which are Book-Entry Securities and have the
same Original Issue Date, redemption provisions, Interest
Payment Dates, interest payment periods, Interest Rate
Basis, Initial Interest Rate, Index Maturity, Spread or
Spread Multiplier, if any, Minimum Interest Rate, if any,
Maximum Interest Rate, if any, Specified Currency and
Stated Maturity (collectively, the "Floating Rate Terms")
will be represented initially by a single Global
Certificate in fully registered form without coupons; and
all Zero Coupon Securities which are Book-Entry
Securities and have the same Original Issue Date,
redemption provisions, Yield to Maturity, Specified
Currency and Stated Maturity (collectively, the "Zero
Coupon Terms") will be represented initially by a single
Global Certificate in fully registered form without
coupons.
Identification: The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP
II-8
<PAGE>
Service Bureau") for the reservation of approximately 900
CUSIP numbers which have been reserved for future
assignment and relating to Book-Entry Securities, and the
Company has delivered to the Issuing Agent and the
Depositary such list of such CUSIP numbers. The Issuing
Agent will assign CUSIP numbers to Book-Entry Securities
as described below under Settlement Procedure B. The
Depositary will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Issuing Agent
has assigned to Book-Entry Securities. The Issuing Agent
will notify the Company at any time when fewer than 100
of the reserved CUSIP numbers remain unassigned to Book-
Entry Securities, and, if it deems necessary, the Company
will reserve additional CUSIP numbers for assignment to
Book-Entry Securities. Upon obtaining such additional
CUSIP numbers, the Company will deliver a list of such
additional numbers to the Issuing Agent and the
Depositary. Book-Entry Securities having an aggregate
principal amount in excess of $150,000,000 and otherwise
required to be represented by the same Global Certificate
will instead be represented by two or more Global
Certificates which shall all be assigned the same CUSIP
number.
Registration: Each Global Certificate will be registered in the name of
Cede & Co., as nominee for the Depositary, on the
Security Register maintained by the Trustee under the
Indenture. On the first Business Day of each month, the
Authenticating Agent will deliver to the Company a
written statement indicating the total principal amount
of Outstanding Book-Entry Securities as of the
immediately preceding Business Day.
Transfers: Transfers of interests in a Book-Entry Security will be
effected in
II-9
<PAGE>
accordance with arrangements in effect between
Participants (and in certain cases, one or more indirect
participants in the Depositary) and the beneficial
transferors and beneficial transferees of such Book-Entry
Security, and the interests of Participants therein will
be reflected as appropriate by book entries made by the
Depositary.
Exchanges: The Company may deliver to the Depositary and the CUSIP
Service Bureau at any time a written notice specifying
(a) the CUSIP numbers of two or more Global Certificates
(i) having the same Fixed Rate Terms, Floating Rate Terms
or Zero Coupon Terms, as the case may be (except that
Original Issue Dates need not be the same), (ii) for
which interest (if any) has been paid to the same date
and (iii) which otherwise constitute Securities of the
same series and tenor under the Indenture; (b) a date,
occurring at least 30 days after such written notice is
delivered and at least 30 days before the next Interest
Payment Date (if any) for such Book-Entry Securities, on
which such Global Certificates shall be exchanged for a
single replacement Global Certificate; and (c) a new
CUSIP number, obtained from the Company, to be assigned
to such replacement Global Certificate. Upon receipt of
such a notice, the Depositary will send to its
participants (including the Issuing Agent) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange
date, the Company will deliver to the CUSIP Service
Bureau 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
Certificates to be exchanged will no longer be valid. On
the specified exchange date, the
II-10
<PAGE>
Issuing Agent will exchange such Global Certificates for
a single Global Certificate authenticated by the
Authenticating Agent and bearing the new CUSIP number,
and the CUSIP numbers of the exchanged Global
Certificates will, in accordance with CUSIP Service
Bureau procedures, be retired and not reassigned.
Notwithstanding the foregoing, if the Global Certificates
to be exchanged exceed $150,000,000 in aggregate
principal amount, one replacement Global Certificate will
be authenticated and issued to represent each
$150,000,000 of principal amount of the exchanged Global
Certificates and an additional Global Certificate will be
authenticated and issued to represent any remaining
principal amount of such Global Certificates (see
"Denominations" below).
Denominations: All Book-Entry Securities will be denominated in U.S.
dollars. Book-Entry Securities will be issued in
denominations of $100,000 and any larger denomination
which is an integral multiple of $1,000. Global
Certificates will be denominated in principal amounts not
in excess of $150,000,000. If one or more Book-Entry
Securities having an aggregate principal amount in excess
of $150,000,000 would, but for the preceding sentence, be
represented by a single Global Certificate, then one
Global Certificate will be issued to represent each
$150,000,000 principal amount of such Book-Entry Security
or Book-Entry Securities and an additional Global
Certificate will be issued to represent any remaining
principal amount of such Book-Entry Security or Book-
Entry Securities. In such a case, each of the Global
Certificates representing such Book-Entry Security or
Securities shall be assigned the same CUSIP number.
Interest: General. The Depositary will arrange
-------
II-11
<PAGE>
for each pending deposit message described under
Settlement Procedure C below to be transmitted to
Standard & Poor's Corporation, which will use the message
to include certain information regarding the related
Book-Entry Notes in the appropriate daily bond report
published by Standard & Poor's Corporation.
Notice of Interest Payments and Regular Record Dates.
----------------------------------------------------
On the first Business Day of January, April, July and
October of each year, the Paying Agent will deliver to
the Company and to the Dividend Department of the
Depositary a written list of Regular Record Dates and
Interest Payment Dates that will occur during the six-
month period beginning on such first Business Day with
respect to Book-Entry Securities which are Floating Rate
Notes. Promptly after each Interest Determination Date
for Book-Entry Securities which are Floating Rate Notes,
the Calculation Agent 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 Paying Agent will deliver to the Company
and the Dividend Department of the Depositary a written
notice specifying by CUSIP number the amount of interest
(if any) to be paid on each Book-Entry Security on the
following Interest Payment Date (other than an Interest
Payment Date coinciding with the Maturity of such
Security) and the total of such amounts. The Depositary
will confirm the amount payable (if any) on each Book-
Entry Security on such Interest Payment Date by reference
to the daily bond reports published by
II-12
<PAGE>
Standard & Poor's Corporation. On such Interest Payment
Date, the Company will pay to the Paying Agent, and the
Paying Agent in turn will pay to the Depositary, such
total amount of interest due (other than at Maturity of
such Security), at the times and in the manner set forth
below under "Manner of Payment".
Payments at Maturity. On or about the first Business Day
--------------------
of each month, the Paying Agent will deliver to the
Company and the Depositary a written list of principal,
premium, if any, and interest to be paid on each Book-
Entry Security maturing either at Stated Maturity or on a
Redemption Date ("Maturity") in the following month. The
Paying Agent, the Company and the Depositary will confirm
the amounts of such principal, premium (if any) and
interest payments with respect to each such Book-Entry
Security on or about the fifth Business Day preceding the
Maturity of such Book-Entry Security. At such Maturity,
the Company will pay to the Paying Agent, and the Paying
Agent in turn will pay to the Depositary, the principal
amount of such Book-Entry Security, together with
interest and premium, if any, due at such Maturity, at
the times and in the manner set forth below under "Manner
of Payment". Promptly after payment to the Depositary of
the principal, interest and premium, if any, due at the
Maturity of all Book-Entry Securities represented by a
particular Global Certificate, the Paying Agent will
deliver to the Trustee for cancellation such Global
Certificate.
Manner of Payment. The total amount of any principal,
-----------------
premium and interest due on Book-Entry Securities on any
Interest Payment Date or at Maturity shall be paid by the
Company to the Paying Agent, in funds imme-
II-13
<PAGE>
diately available for use by the Issuing and Paying Agent
as of 9:30 a.m., New York City time, on such date. The
Company will make such payment on such Book-Entry
Securities by wire transfer to the Paying Agent or by
instructing the Paying Agent to withdraw funds from an
account maintained by the Company at the Paying Agent.
The Company will confirm such instructions in writing to
the Paying Agent. For principal payments at Maturity,
prior to 10:00 a.m., New York City time, on such Maturity
or as soon as possible thereafter, the Paying Agent will
pay by separate wire transfer (using Fedwire message
entry instructions in a form previously specified by the
Depositary) to an account at the Federal Reserve Bank of
New York previously specified by the Depositary, in funds
available for immediate use by the Depositary, each
payment of interest, principal and premium, if any, due
on Book-Entry Securities on such date; and for interest
payments, the Paying Agent will pay the Depositary in
same-day funds on the Interest Payment Date in accordance
with existing arrangements between the Paying Agent and
the Depositary. Thereafter on each such date, the
Depositary will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names such Book-Entry Securities
are recorded in the book-entry system maintained by the
Depositary. Once payment has been made to the
Depositary, neither the Company, the Trustee nor the
Paying Agent shall have any responsibility or liability
for the payment by the Depositary of the principal of, or
premium, if any, or interest on, the Book-Entry
Securities to such Participants.
Withholding Taxes. The amount of any
-----------------
II-14
<PAGE>
taxes required under applicable law to be withheld from
any interest payment on a Book-Entry Security will be
determined and withheld by the Participant, indirect
participant in the Depositary or other Person responsible
for forwarding payments and materials directly to the
beneficial owner of such Book-Entry Security, or as
applicable law may otherwise require.
Settlement
Procedures: Settlement Procedures with regard to each Book-Entry
Security sold by each Agent, as agent of the Company,
will be as follows:
A. After the acceptance of an offer by the Company
with respect to a Book-Entry Security, the
Selling Agent or Purchasing Agent, as the case
may be, will communicate the following details of
the terms of such offer (the "Book-Entry Sale
Information") to the Company by telephone
confirmed in writing or by facsimile transmission
or other acceptable written means:
(1) Principal amount of the Book-Entry Security
to be purchased;
(2) If a Fixed Rate Security, the interest
rate;
(3) Stated Maturity;
(4) Issue Price;
(5) Selling Agent's commission or Purchasing
Agent's discount, as the case may be;
(6) Net proceeds to the
II-15
<PAGE>
Company;
(7) Settlement Date;
(8) If a Security redeemable by the Company,
such of the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
and
(iii) Amount (% of par) that the
Redemption Price shall decline (but not
below par) on each anniversary of the
Redemption Commencement Date;
(9) If a Floating Rate Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Interest Rate,
(v) Minimum Interest Rate,
(vi) Initial Interest Rate,
(vii) Interest Rate Reset Period,
(viii) Calculation Dates,
II-16
<PAGE>
(ix) Interest Calculation Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(10) If the amount of principal payable on a
Security will be determined by reference to
an index or formula, a full description of
such index or formula;
(11) If an OID Note, the total amount of OID,
the Yield to Maturity and the initial
accrual period of OID; and
(12) The taxpayer identification number of the
purchaser.
B. Upon receiving the Book-Entry Sale Information
from the Selling Agent or the Purchasing Agent,
as the case may be, the Company will advise the
Issuing Agent by telephone (confirmed by
facsimile or electronic transmission) of the
Book-Entry Sale Information received from the
Selling Agent or the Purchasing Agent, as the
case may be, and the name of such Agent.
C. The Issuing Agent will assign a CUSIP number to
the Global Certificate representing such Book-
Entry Security and will communicate to the
Depositary, such Agent and Standard & Poor's
Corpora-
II-17
<PAGE>
tion, through the Depositary's Participant
Terminal System, a pending deposit message (the
form of which has been previously furnished to
the Issuing Agent by the Company) specifying the
following settlement information:
1. The Book-Entry Sale Information.
2. Identification numbers of the participant
accounts maintained by the Depositary on
behalf of the Issuing Agent and such Agent.
3. Identification as a Fixed Rate Security,
Floating Rate Security or Zero Coupon
Security.
4. Initial Interest Payment Date for such
Security, number of days by which such date
succeeds the related record date for
Depositary purposes (or, in the case of
Floating Rate Notes which reset daily or
weekly, the date five calendar days
preceding such Initial Interest Payment
Date) and, if then calculable, the amount
of interest payable on such Initial
Interest Payment Date (which amount shall
have been confirmed by the Trustee).
5. CUSIP number of the Global Certificate
representing such Book-Entry Security.
6. Whether such Global
II-18
<PAGE>
Certificate will represent any other Book-
Entry Securities issued or to be issued (to
the extent then known).
D. The Company will complete and deliver to the
Issuing Agent a Global Certificate representing
such Book-Entry Security, and the Company will
instruct the Authenticating Agent by facsimile
transmission or other acceptable written means to
authenticate such Global Certificate, to register
such Global Certificate in the name of Cede &
Co., as nominee of the Depositary, and to effect
delivery thereof to the Depositary by the Issuing
Agent's possession of such authenticated Global
Certificate as agent for the Depositary.
E. The Authenticating Agent will authenticate the
Global Certificate representing such Book-Entry
Security, register such Global Certificate in the
name of Cede & Co., as nominee of the Depositary.
The Issuing Agent will take delivery thereof as
agent for the Depositary.
F. The Depositary will credit such Book-Entry
Security to the participant account of the
Issuing Agent maintained by the Depositary.
G. The Issuing Agent will enter an SDFS deliver
order through the Depositary's Participant
Terminal System instructing the Depositary (i) to
debit such Book-Entry Security to
II-19
<PAGE>
the Issuing Agent's participant account and
credit such Book-Entry Security to the
participant account of the Selling Agent or the
Purchasing Agent, as the case may be, maintained
by the Depositary and (ii) to debit the
settlement account of the Selling Agent or the
Purchasing Agent, as the case may be, and credit
the settlement account of the Issuing Agent
maintained by the Depositary, in an amount equal
to the price of such Book-Entry Security less
such Agent's commission or discount, as the case
may be. Any entry of such a deliver order shall
be deemed to constitute a confirmation by the
Authenticating Agent and the Issuing Agent to the
Depositary that (i) the Global Certificate
representing such Book-Entry Security has been
issued and authenticated and (ii) the Issuing
Agent is holding such Global Certificate as agent
of the Depositary pursuant to the Certificate
Agreement.
H. The Selling Agent or the Purchasing Agent, as the
case may be, will enter an SDFS deliver
instruction through the Depositary's Participant
Terminal System instructing the Depositary (i) to
debit such Book-Entry Security to the participant
account of such Agent and credit such Book-Entry
Security to the participant accounts of the
Participants with respect to such Book-Entry
Security maintained by the Depositary and (ii) to
debit the settlement accounts of such
II-20
<PAGE>
Participants and credit the settlement account of
such Agent maintained by the Depositary in an
amount equal to the price of such Book-Entry
Security.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement Procedures
G and H will be settled in accordance with SDFS
operating procedures in effect on the Settlement
Date.
J. The Issuing Agent will credit to an account of
the Company maintained at the Issuing Agent funds
available for immediate use in the amount
transferred to the Issuing Agent in accordance
with Settlement Procedure G.
K. The Issuing Agent will send a copy of the Global
Certificate by first-class mail to the Company
together with a statement setting forth the
principal amount of Securities Outstanding and of
Book-Entry Securities Outstanding as of the
related Settlement Date after giving effect to
such transaction and all other offers to purchase
Securities of which the Company has advised the
Issuing Agent but which have not yet been
settled.
L. The Selling Agent or the Purchasing Agent, as the
case may be, will confirm the purchase of such
Book-Entry Security to the purchaser either by
transmitting to the Participants with respect to
such Book-Entry Security a confirmation order
through
II-21
<PAGE>
the Depositary's Participant Terminal System or
by mailing a written confirmation to such
purchaser.
M. Notwithstanding the foregoing, the Selling Agent
shall in all cases take the actions described
under the caption "Delivery of Confirmation and
Prospectus to Purchaser by Selling Agent" in Part
I of this Administrative Procedure, at the time
or times specified under such caption for such
actions.
Settlement
Procedures
Timetable: For orders of Book-Entry Securities accepted by the
Company, Settlement Procedures "A" through "L" set forth
above shall be completed as soon as possible but not
later than the respective times (New York City time) set
forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade date
B 12:00 Noon on the trade date
C 2:00 p.m. on the trade date
D 3:00 p.m. on the Business Day
before Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business Day
after the trade date, Settlement Procedures A, B, and C
may, if necessary, be completed at any time prior to the
specified times on the first Business Day after the trade
date. In connection with a sale which is to be settled
more than one Business Day after the trade date, if the
initial interest rate
II-22
<PAGE>
for a Floating Rate Note is not known at the time that
Settlement Procedure A is completed, Settlement
Procedures B and C shall be completed as soon as such
rates have been determined, but no later than 11:00 a.m.
and 2:00 p.m., New York City time, respectively, on the
second Business Day before the Settlement Date.
Settlement Procedure I is subject to extension of Fedwire
closing deadlines and in the other events specified in
the SDFS operating procedures in effect on the settlement
date.
If settlement of a Book-Entry Security is rescheduled or
cancelled, the Company will as soon as practicable give
the Issuing Agent notice to such effect. The Issuing
Agent will deliver to the Depositary, through the
Depositary's Participant Terminal System, a cancellation
message (the form of which has been previously furnished
to the Issuing Agent by the Depositary) to such effect by
no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled
Settlement Date (provided the Issuing Agent received such
notice from the Company by noon on the business day
immediately preceding the Settlement Date) and in any
case as soon as practicable. A copy of such message will
be routed through the facilities of the Depositary to the
Selling Agent and Standard & Poor's Corporation.
Failure to
Settle: If the Issuing Agent fails to enter in timely fashion an
SDFS deliver order with respect to any portion of a Book-
Entry Security pursuant to Settlement Procedure G, or if
the Selling Agent or the Purchasing Agent, as the case
may be, fails to enter in timely fashion an SDFS deliver
order with respect to such
II-23
<PAGE>
Book-Entry Security pursuant to Settlement Procedure H,
the Issuing Agent may deliver to the Depositary, through
the Depositary's Participant Terminal System, as soon as
practicable a withdrawal message (the form of which has
been previously fur-nished to the Issuing Agent by the
Depositary) instructing the Depositary to debit such
Book-Entry Security to the participant account of the
Issuing Agent maintained at the Depositary. A copy of
such message will be routed through the facilities of the
Depositary to such Agent. The Depositary will process
the withdrawal message, provided that such participant
account contains Book-Entry Securities having the same
Fixed Rate Terms, Floating Rate Terms or Zero Coupon
Terms, as the case may be, having an aggregate principal
amount that is at least equal to the principal amount to
be debited. If withdrawal messages are processed with
respect to all the Book-Entry Securities represented by a
particular Global Certificate, the Issuing Agent will
instruct the Trustee to cancel immediately such Global
Certificate, make appropriate entries in its records and,
unless otherwise instructed by the Company, destroy the
Global Certificate. The CUSIP number assigned to such
Global Certificate shall, in accordance with CUSIP
Service Bureau procedures, be retired and not reassigned.
If withdrawal messages are processed with respect to only
a portion of the Book-Entry Securities represented by a
particular Global Certificate, the Issuing Agent will
exchange such Global Certificate for two Global
Certificates authenticated by the Authenticating Agent,
one of which shall represent the Book-Entry Securities
for which withdrawal messages are processed and shall be
cancelled by the Trustee and destroyed immediately after
issuance,
II-24
<PAGE>
and the other of which shall represent the other Book-
Entry Securities previously represented by the
surrendered Global Certificate and shall bear the CUSIP
number of the surrendered Global Certificate. The
Company will reimburse such Agent on an equitable basis
for its loss of the use of funds during any period when
the funds were credited to the account of the Company in
connection with such attempted settlement.
If the purchase price for any Book-Entry Security is not
timely paid to the Participants with respect to such
Security by the beneficial purchaser thereof or by a
person, including an indirect participant in the
Depositary, acting on behalf of such purchaser (other
than the Purchasing Agent, if any), such Participants
and, in turn, the Selling Agent or the Purchasing Agent,
as the case may be, may enter SDFS deliver orders through
the Depositary's Participant Terminal System reversing
the orders entered pursuant to Settlement Procedures G
and H, respectively. Immediately thereafter, the Issuing
Agent will deliver the withdrawal message and take the
related actions described in the preceding paragraph.
The Company will reimburse such Agent on an equitable
basis for its loss of the use of funds during any period
when the funds were credited to the account of the
Company in connection with such attempted settlement.
Notwithstanding the foregoing, upon any failure to settle
with respect to any portion of a Book-Entry Security, the
Depositary may take any actions in accordance with its
SDFS operating procedures then in effect. In the event
of a failure to settle with respect to any portion of a
Book-Entry Security that was to have been represented by
a Global Certificate also representing other Book-Entry
II-25
<PAGE>
Securities, the Issuing Agent will provide, in accordance
with Settlement Procedures D and E, for the
authentication and issuance of a Global Certificate
representing the remaining principal amount to have been
represented by such Global Certificate and will make
appropriate entries in its records.
Issuing and Paying
Agents Not to
Risk Funds: Nothing herein will be deemed to require the Issuing
Agent or the Paying Agent to risk or expend its own funds
in connection with any payment to the Company, the
Agents, the Depositary or any Securityholder, it being
understood by all parties that payments made by the
Issuing Agent or the Paying Agent to any party will be
made only to the extent that funds are provided to the
Issuing Agent or the Paying Agent, as the case may be,
for such purpose.
II-26
<PAGE>
ANNEX III
---------
Accountant's Letter
-------------------
Pursuant to Section 4(k) and Section 6(e), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) (A) In their opinion, the financial statements and any
supplementary financial information and schedules examined by them and included
or incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and (B) if they have made a review
in accordance with standards established by the American Institute of Certified
Public Accountants of any consolidated interim financial statements, selected
financial data, pro forma financial information and/or condensed financial
statements derived from audited financial statements of the Company included or
incorporated by reference in the Registration Statement or the Prospectus, they
have made such reviews in accordance with standards established by the American
Institute of Certified Public Accountants for the periods specified in such
letter as indicated in their reports thereon, copies of which have been
furnished to the Agents;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for the five such fiscal years which were included or incorporated by reference
in the Company's Annual Reports on Form 10-K for such fiscal years;
(iv) They have compared restated selected Per Common Share and Common
Equivalent Share data included in the unaudited selected financial information
for the five more recent fiscal years included in the Prospectus to
III-1
<PAGE>
amounts in analyses prepared by the Company and have found them to be in
agreement. Such analyses include adjustments to historical financial data to
reflect the two-for-one stock split in the form of a stock dividend paid April
30, 1993 to holders of the Company's Common Stock of record April 15, 1993.
They compared such historical financial data to the corresponding amounts in the
Company's audited consolidated financial statements for such fiscal years which
were included or incorporated by reference in the Company's Annual Report on
Form 10-K for such fiscal years and found them to be in agreement.
(v) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred to
below, a reading of the latest available interim financial statements of the
Company and its subsidiaries, inspection of the minute books of the Company,
Commonwealth Life Insurance Company, National Home Life Assurance Company and
Peoples Security Life Insurance Company since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated statements of financial condition 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
(i) do not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form 10-Q and
the related published rules and regulations thereunder or (ii) are not in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with the basis for the audited consolidated
statements of income, consolidated statements of financial condition 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) if any other unaudited statement of income data and statement of
financial condition items are included in the Prospectus but are not
derived from the unaudited condensed consolidated financial statements
referred to in Clause (A) (i) such data and items do
III-2
<PAGE>
not agree with the corresponding items in the unaudited consolidated
financial statements from which such data and items were derived, or (ii)
such unaudited consolidated financial statements were not determined on a
basis substantially consistent with the basis for the audited financial
statements included or incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
(C) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(D) (1) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the capital stock of
the Company (other than issuances of capital stock upon exercise of options
which were outstanding on the date of the latest statement of financial
condition included or incorporated by reference in the Prospectus) or any
change in the consolidated capital stock (other than any such issuances) or
any increase in the consolidated short-term or long-term debt of the
Company and its consolidated subsidiaries, or (2) as of the date of the
most recent consolidated financial statements available for internal use or
otherwise available on the date which is five days prior to the date of
such letter, there have been any decreases in consolidated total assets,
total cash and investments or shareholders' equity, in each case as
compared with amounts shown in the latest statement of financial condition
included or incorporated by reference in the Prospectus, except in each
case for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(E) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the date of the
most recent consolidated financial statements available for internal use or
otherwise available on the date which is five days prior to the date of
such letter, there were any decreases in the total or per share amounts of
consolidated income before federal income taxes, consolidated premiums and
other considerations or consolidated investment income, net of expenses, in
III-3
<PAGE>
each case as compared with the comparable period of the preceding year,
except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
(vi) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii), (iv) and (v) above, they have carried out certain
specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and 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 such amounts, percentages
and financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement except as indicated in such
letter.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(e) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(k) thereof.
III-4
<PAGE>
Exhibit 4.1
[Form of Face of Security]
[Fixed Rate Medium-Term Note]
REGISTERED REGISTERED
No. FXR- PRINCIPAL AMOUNT:
CUSIP
CAPITAL HOLDING CORPORATION
MEDIUM-TERM NOTE, SERIES D
[Insert if the Security is to be a Global Security -- This Security is a
-------------------------------------------------
Global Security within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Security may not be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary or a nominee
thereof and no such transfer may be registered, except under the limited
circumstances described in the Indenture. Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of,
this Security shall be a Global Security subject to the foregoing, except under
such limited circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company or
its agent for registration of transfer, exchange, or payment, and any Security
issued upon registration of transfer of, or in exchange for, or in lieu of, this
Security is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC (and any payment hereon is made to Cede &
Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
[IF THIS SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- FOR
------
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY
IS _____% OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS _________, 19__[,] [AND]
THE YIELD TO MATURITY IS _____%[, THE METHOD USED TO DETERMINE THE YIELD IS
_____ AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL
PERIOD OF ______, 19___ TO ____________, 19__ IS _____% OF THE PRINCIPAL AMOUNT
OF THIS SECURITY].
<PAGE>
SPECIFIED CURRENCY: EXCHANGE RATE
AGENT:
EXCHANGE RATE: U.S.$1.00= _____
ORIGINAL MATURITY
ISSUE DATE: DATE:
INTEREST RATE: % REDEMPTION
COMMENCEMENT
DATE:
REDEMPTION REDEMPTION
PERIODS: PRICES:
ORIGINAL ISSUE DEFAULT RATE: %
DISCOUNT SECURITY: (applicable only if
Security is an
Yes: ___ No: ___ Original Issue
Discount Security)
OTHER PROVISIONS:
CAPITAL HOLDING CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to
______________________________________________________, or registered assigns,
the principal sum of _______________
___________________________ DOLLARS on the Maturity Date specified above [If the
------
Security is to bear interest prior to Maturity, insert --, and to pay interest
- ------------------------------------------------------
thereon from the Original Issue Date specified above or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
unless otherwise specified above in "Other Provisions", semi-annually on
September 15 and March 15 of each year and at Maturity, commencing on the first
such Interest Payment Date next succeeding the Original Issue Date (or, if the
Original Issue Date is after a Regular Record Date and before the Interest
Payment Date immediately following such Regular Record Date, on the second such
Interest Payment Date next succeeding the Original Issue Date), at the Interest
Rate per annum specified above, until the principal hereof is paid or made
available for payment. The interest so payable, and
-2-
<PAGE>
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall, unless otherwise
specified above in "Other Provisions", be the September 1 and March 1 (whether
or not a Business Day), as the case may be, next preceding, unless otherwise
specified above in "Other Provisions", the September 15 and March 15 Interest
Payment Dates; provided, however, that interest payable at Maturity will be
-------- -------
payable to the Person to whom principal shall be payable. Any such interest not
so punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice of which shall be
given to the Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert --
-----------------------------------------------------------------
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the Default Rate per annum specified above (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the Default Rate per annum specified above
(to the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such demand for payment to the date payment
of such interest has been made or duly provided for, and such interest shall
also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
--------------
insert -- any such] interest on this Security will be made in the Specified
- ------
Currency specified above; provided, however, that, if this Security is
-------- -------
-3-
<PAGE>
denominated in other than U.S. dollars, payments of principal (and premium, if
any) and interest on this Security will nevertheless be made in U.S. dollars:
(a) at the option of the Holder of this Security under the procedures described
in the two next succeeding paragraphs and (b) at the Company's option in the
case of imposition of exchange controls as described in the fifth succeeding
paragraph. The Company will at all times appoint and maintain a Paying Agent
(which may be the Trustee) authorized by the Company to pay the principal of
(and premium, if any) or interest on any Securities of this series on behalf of
the Company and having an office or agency (the "Paying Agency Office") in the
Borough of Manhattan, The City of New York (the "Place of Payment") where
Securities of this series may be presented or surrendered for payment and where
notices, designations or requests in respect of payments with respect to
Securities of this series may be served. The Company has initially appointed
Morgan Guaranty Trust Company of New York as such Paying Agent and will give
prompt written notice to the Trustee of any change in such appointment.
Except as provided in the next paragraph, payments of interest and
principal (and premium, if any) for any Security of this series denominated in a
Specified Currency other than U.S. dollars will be made in U.S. dollars if the
registered Holder of such Security on the relevant Regular Record Date or at the
Maturity of such Security, as the case may be, has transmitted a written request
for such payment in U.S. dollars to the Paying Agent at the Paying Agency Office
in the Place of Payment on or before such Regular Record Date or the date 15
days before such Maturity, as the case may be. Such request may be in writing
(mailed or hand delivered) or by cable, telex or other form of facsimile
transmission. Any such request made for any Security by a registered Holder
will remain in effect for any further payments of interest and principal (and
premium, if any) on such Security payable to such Holder, unless such request is
revoked on or before the relevant Regular Record Date or the date 15 days before
the Maturity of such Security, as the case may be.
The U.S. dollar amount to be received by a Holder of a Security
denominated in a Specified Currency other than U.S. dollars who elects to
receive payment in U.S. dollars will be based upon the rate of exchange equal to
the highest bid quotation in The City of New York for U.S. dollars received by
the Exchange Rate Agent (as defined below) as of 11:00 a.m., New York City time,
on the second Business Day next preceding the applicable payment date from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) for the purchase by the quoting dealer
-4-
<PAGE>
of such Specified Currency for U.S. dollars for settlement on such payment date
in the aggregate amount of such Specified Currency payable to all Holders of
Securities of this series denominated in such Specified Currency electing to
receive U.S. dollar payments on such payment date and at which the applicable
dealer commits to execute a contract. If three such bid quotations are not
available on the second Business Day preceding the payment of principal (and
premium, if any) or interest for any such Security, such payment will be made in
the Specified Currency. All currency exchange costs associated with any payment
in U.S. dollars on any such Security will be borne by the Holder thereof by
deductions from such payment. If this Security is denominated in a Specified
Currency other than U.S. dollars, (i) the Company will at all times appoint and
maintain a banking institution that is not an Affiliate of the Company as
Exchange Rate Agent hereunder; and (ii) the Company has initially appointed the
Exchange Rate Agent specified above as such Exchange Rate Agent and will give
prompt written notice to the Trustee of any change in such appointment.
Payment of the principal of (and premium, if any) and interest on any
Security of this series due at the Maturity of such Security to be made in U.S.
dollars will be made in immediately available funds upon surrender of such
Security to the Paying Agent at the Paying Agency Office in the Place of
Payment; provided that such Security is presented to the Paying Agent in time
--------
for the Paying Agent to make such payment in accordance with its normal
procedures. Payments of interest on any Security of this series to be made in
U.S. dollars (other than at the Maturity of such Security) will be made by check
mailed to the address of the Person entitled thereto as it appears in the
Security Register or by wire transfer to such account as may have been
appropriately designated to the Paying Agent by such Person.
Payments of interest and principal (and premium, if any) with respect to
any Security of this series to be made in a Specified Currency other than U.S.
dollars will be made by wire transfer to such account with a bank located in the
country issuing the Specified Currency (or, if such Security is denominated in
ECUs, Brussels) or other jurisdiction acceptable to the Company and the Paying
Agent as shall have been designated at least 5 days prior to the Interest
Payment Date or the Maturity of such Security, as the case may be, by the
registered Holder of such Security on the relevant Regular Record Date or at
such Maturity, provided that, in the case of payment of principal of (and
--------
premium, if any) and any interest due at such Maturity, such Security is
presented to the Paying Agent in time for the
-5-
<PAGE>
Paying Agent to make such payments in such funds in accordance with its normal
procedures. Such designation shall be made by filing the appropriate
information with the Paying Agent at the Paying Agency Office in the Place of
Payment, and, unless revoked, any such designation made with respect to any
Security of this series by a registered Holder will remain in effect with
respect to any further payments with respect to such Security payable to such
Holder. If a payment in a Specified Currency other than U.S. dollars with
respect to any Security of this series cannot be made by wire transfer because
the required designation has not been received by the Paying Agent on or before
the requisite date or for any other reason, the Company will mail a notice to
the Holder of such Security at its registered address requesting a designation
pursuant to which such wire transfer can be made and, upon the Paying Agent's
receipt of such a designation, such payment will be made within 5 days of such
receipt. The Company will pay any administrative costs imposed by banks in
connection with making payments by wire transfer with respect to any Security of
this series, but any tax, assessment or governmental charge imposed upon
payments will be borne by the Holder of such Security.
If the principal of (and premium, if any) or interest on any Security of
this series is payable in other than U.S. dollars and such Specified Currency is
not available, due to the imposition of exchange controls or other circumstances
beyond the control of the Company, the Company will be entitled to satisfy its
obligations to the Holder of such Security by making payments in U.S. dollars on
the basis of the most recently available Exchange Rate (as defined on the
reverse hereof).
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse
-6-
<PAGE>
hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: CAPITAL HOLDING CORPORATION
[SEAL] By____________________________
Authorized Officer
Attest:
____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
As Trustee
By__________________________
Authorized Officer
-7-
<PAGE>
[Form of Reverse of Security]
[Fixed Rate Medium-Term Note]
CAPITAL HOLDING CORPORATION
MEDIUM-TERM NOTE, SERIES D
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of January 1, 1994, (the "Indenture"),
between the Company and Morgan Guaranty Trust Company of New York, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the Securities
of the series designated on the face hereof. The Securities of this series may
be issued upon original issuance under the Indenture from time to time at an
aggregate initial public offering price not to exceed $400,000,000 or its
equivalent in another currency or composite currency. The aggregate principal
amount of Securities of this series which may be issued under the Indenture will
be limited to the aggregate of the principal amounts of the Securities of this
series so issued upon original issuance, which aggregate amount shall not exceed
$400,000,000.
Payments of interest hereon with respect to any Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date.
Interest hereon shall be computed on the basis of a 360-day year of twelve 30-
day months.
Any payment on this Security due on any day which is not a Business Day
in The City of New York (and, if the Specified Currency specified on the face
hereof is other than U.S. dollars, in the country issuing such Specified
Currency (or, for ECUs, Brussels)) need not be made on such day, but may be made
on the next succeeding such Business Day with the same force and effect as if
made on such due date, and no interest shall accrue for the period from and
after such date. "Business Day," for any particular location, means each
Monday, Tuesday, Wednesday, Thursday, and Friday which is not a day on which
banking institutions in such location are authorized or obligated by law or
executive order to close.
<PAGE>
Unless a Redemption Commencement Date is specified on the face hereof,
this Security shall not be redeemable before the Maturity Date specified on the
face hereof. If a Redemption Commencement Date is so specified, this Security
is subject to redemption upon not less than 30 days' notice by first class mail
at any time on or after the Redemption Commencement Date, as a whole or in part,
at the election of the Company, at the Redemption Price specified on the face
hereof (expressed as a percentage of the principal amount of this Security)
applicable to the Redemption Period so specified during which this Security is
to be redeemed, together in the case of any such redemption with accrued
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holder of this
Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.
In the event of redemption of this Security in part only, a new Security
or Securities of this series and of like tenor and for a principal amount equal
to the unredeemed portion will be issued in the name of the Holder upon the
cancellation hereof.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
(or, in the case of any Securities of this series that are Original Issue
Discount Securities, the Default Amount (as defined below) thereof) may be
declared due and payable in the manner and with the effect provided in the
Indenture.
If this Security is an Original Issue Discount Security and if an Event
of Default with respect to the Securities shall have occurred and be continuing,
the "Default Amount" of principal of this Security may be declared due and
payable in the manner and with the effect provided in the Indenture. Such
Default Amount shall be equal to the adjusted issue price as at the first day of
the accrual period as determined under Proposed Treasury Regulation Section
1.1272-1 (or any successor regulation) under the United States Internal Revenue
Code of 1986, as amended, in which the date of acceleration occurs increased by
the original issue discount allocable to such accrual period ending on the date
of acceleration, as determined under Proposed Treasury Regulation Section
1.1272-1 (or any successor regulation) under the United States Internal Revenue
Code of 1986, as amended. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in
-2-
<PAGE>
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and interest, if any, on this Security shall terminate.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this Security or (ii) certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. The principal amount of an Original Issue
Discount Security or a Security denominated in a Specified Currency other than
U.S. dollars that shall be deemed to be Outstanding for purposes of the
foregoing shall be determined as provided in the Indenture. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security or
Securities issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of
-3-
<PAGE>
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any premium or interest hereon on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
(including, if this Security is a Global Security, certain additional
limitations) therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in the Place of Payment, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of (i) if denominated in U.S. dollars, $100,000
and any integral multiple of $1,000 in excess thereof or (ii) if denominated in
a Specified Currency other than U.S. dollars, the amount of such Specified
Currency equivalent, at the noon buying rate in The City of New York for cable
transfers for such Specified Currency (the "Exchange Rate") on the sixth
Business Day in The City of New York and in the country issuing such currency
(or, for ECUs, Brussels) next preceding the Original Issue Date, to U.S.
$100,000 (rounded down to an integral multiple of 10,000 units of the Specified
Currency) and any greater amount that is an integral multiple of 10,000 units of
such Specified Currency. The Securities of this series may be issued, in whole
or in part, in the form of one or more Global Securities bearing the legend
specified in the Indenture regarding certain restrictions on registration of
transfer and exchange and issued to The Depository Trust Company as depositary
for the Global Securities of this series (the
-4-
<PAGE>
"Depositary") or its nominee and registered in the name of the Depositary or
such nominee. As provided in the Indenture and subject to certain limitations
(including, if this Security is a Global Security, certain additional
limitations) therein set forth, Securities of this series issued in definitive
registered form are exchangeable for a like aggregate principal amount of
Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Security shall be governed by and construed in accordance with
the laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-5-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - __________ Custodian _________
(Cust) (Minor)
under Uniform Gifts to Minors Act
______________________________
(State)
Additional abbreviations may also be used
though not in the above list.
_____________________________
-6-
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto__________
_____________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
___________________________
/__________________________/
_____________________________________________________________________________
_____________________________________________________________________________
(Please Print or Typewrite Name and Address
Including Postal Zip Code of Assignee)
_____________________________________________________________________________
the within Security and all rights thereunder, and hereby
irrevocably constitutes and appoints_________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
to transfer said Security on the books of the Company, with
full power of substitution in the premises.
Dated:______________
Signature Guaranteed
__________________________ ______________________________
NOTICE: Signature must be NOTICE: The signature to this
guaranteed by a member assignment must correspond
firm of the New York State with the name as written upon
Stock Exchange or a the face of the within
commercial bank or trust Security in every particular,
company. without alteration or
enlargement or any change
whatever.
-7-
<PAGE>
[Form of Face of Security]
[Floating Rate (Resetting Weekly,
Monthly, Quarterly, Semi-Annually or Annually)
U.S. Dollar Specified Currency,
Non-Original Issue Discount
Medium-Term Note]
REGISTERED REGISTERED
No. FLR- $_________
CUSIP
CAPITAL HOLDING CORPORATION
MEDIUM-TERM NOTE, SERIES D
[Insert if the Security is to be a Global Security -- This Security is a
-------------------------------------------------
Global Security within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Security may not be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary or a nominee
thereof and no such transfer may be registered, except under the limited
circumstances described in the Indenture. Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of,
this Security shall be a Global Security subject to the foregoing, except under
such limited circumstances.
Unless this Security is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Security
issued upon registration of transfer of, or in exchange for, or in lieu of, this
Security is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC (and any payment hereon is made to Cede &
Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
ORIGINAL INITIAL MATURITY
ISSUE DATE: INTEREST DATE:
RATE: %
<PAGE>
INDEX MATURITY: INTEREST RATE
BASIS:
SPREAD (plus SPREAD
or minus): MULTIPLIER:
MINIMUM MAXIMUM
INTEREST RATE: INTEREST RATE:
INTEREST PAYMENT
DATES:
Third Wednesday of: __ March
__ June
__ September
__ December
_____________
_____________
INTEREST INTEREST
RESET RESET
DATES: PERIOD:
(applicable only if
Interest Reset
Period is
semi-annual
or annual)
Third Wednesday of:
CALCULATION REDEMPTION
AGENT: Morgan Guaranty COMMENCEMENT
Trust Company of DATE:
New York
REDEMPTION REDEMPTION
PERIODS: PRICES:
OTHER PROVISIONS:
-2-
<PAGE>
CAPITAL HOLDING CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to
, or registered assigns, the principal sum of DOLLARS on the
Maturity Date specified above (or, if such date is not a Market Day (as defined
on the reverse hereof) for this Security, the next succeeding such Market Day
(or, if the Interest Rate Basis specified above is LIBOR and such next
succeeding such Market Day falls in the next calendar month, the next preceding
such Market Day)), and to pay interest thereon from the Original Issue Date
specified above or from the most recent Interest Payment Date (or, if the
Interest Reset Period specified above is weekly, from the day following the most
recent Regular Record Date) to which interest has been paid or duly provided
for, on the Interest Payment Dates in each year specified above (or if any such
date is not a Market Day (as defined on the reverse hereof) for this Security,
the next succeeding such Market Day (or, if the Interest Rate Basis specified
above is LIBOR and such next succeeding such Market Day falls in the next
calendar month, the next preceding such Market Day)) and at Maturity, commencing
on the first such Interest Payment Date next succeeding the Original Issue Date
(or, if the Original Issue Date is after a Regular Record Date and before the
Interest Payment Date immediately following such Regular Record Date, on the
second such Interest Payment Date next succeeding the Original Issue Date), at a
rate per annum equal to the Initial Interest Rate specified above until the
first Interest Reset Date following the Original Issue Date and on and after
such Interest Reset Date at the rate determined in accordance with the
provisions set forth on the reverse hereof, until the principal hereof is paid
or made available for payment. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the 15th day (whether or not a
Business Day) next preceding such Interest Payment Date; provided, however, that
-------- -------
interest payable at Maturity will be payable to the Person to whom principal
shall be payable. Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the registered Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted
-3-
<PAGE>
Interest to be fixed by the Trustee, notice of which shall be given to the
Holders of Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which this Security may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
The Company will at all times appoint and maintain a Paying Agent (which
may be the Trustee) authorized by the Company to pay the principal of (and
premium, if any) or interest on any Securities of this series on behalf of the
Company and having an office or agency (the "Paying Agency Office") in the
Borough of Manhattan, The City of New York (the "Place of Payment") where
Securities of this series may be presented or surrendered for payment and where
notices, designations or requests in respect of payments with respect to
Securities of this series may be served. The Company has initially appointed
Morgan Guaranty Trust Company of New York as such Paying Agent and will give
prompt written notice to the Trustee of any change in such appointment.
Payment of the principal of (and premium, if any) and interest on any
Security of this series and of like tenor due at the Maturity of such Security
will be made in immediately available funds upon surrender of such Security to
the Paying Agent at the Paying Agency Office in the Place of Payment; provided
--------
that such Security is presented to the Paying Agent in time for the Paying Agent
to make such payment in accordance with its normal procedures. Payments of
interest on any Security of this series and of like tenor (other than at the
Maturity of such Security) will be made by check mailed to the address of the
Person entitled thereto as it appears in the Security Register or by wire
transfer to such account as may have been appropriately designated to the Paying
Agent by such Person.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be
-4-
<PAGE>
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: CAPITAL HOLDING CORPORATION
By____________________________
[SEAL] Authorized Officer
Attest:
______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
As Trustee
By_______________________
Authorized Officer
-5-
<PAGE>
[Form of Reverse of Security]
[Floating Rate (Resetting Weekly,
Monthly, Quarterly, Semi-Annually or Annually)
U.S. Dollar Specified Currency,
Non-Original Issue Discount
Medium-Term Note]
CAPITAL HOLDING CORPORATION
MEDIUM-TERM NOTE, SERIES D
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of January 1, 1994 (the "Indenture"),
between the Company and Morgan Guaranty Trust Company of New York, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the Securities
of the series designated on the face hereof. The Securities of this series may
be issued upon original issuance under the Indenture from time to time at an
aggregate initial public offering price not to exceed $400,000,000 or its
equivalent in another currency or composite currency. The aggregate principal
amount of Securities of this series which may be issued under the Indenture will
be limited to the aggregate of the principal amounts of the Securities of this
series so issued upon original issuance, which aggregate amount shall not exceed
$400,000,000.
Unless a Redemption Commencement Date is specified on the face hereof,
this Security shall not be redeemable before the Maturity Date specified on the
face hereof. If a Redemption Commencement Date is so specified, this Security
is subject to redemption, upon not less than 30 days' notice by first class mail
at any time on or after the Redemption Commencement Date, as a whole or in part,
at the election of the Company, at the Redemption Price specified on the face
hereof (expressed as a percentage of the principal amount of this Security)
applicable to the Redemption Period so specified during which this Security is
to be redeemed, together in the case of any such redemption with accrued
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to the Redemption Date will be payable to the Holder of this
Security, or one or more Predecessor Securities, of record at the close of
business on the
<PAGE>
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
In the event of redemption of this Security in part only, a new Security
or Securities of this series and of like tenor and for a principal amount equal
to the unredeemed portion will be issued in the name of the Holder upon the
cancellation hereof.
The rate of interest on this Security will be reset weekly, monthly,
quarterly, semi-annually or annually (each an "Interest Reset Date"), depending
on the Interest Reset Period specified on the face hereof; provided, however,
-------- -------
that (i) the interest rate in effect from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate specified on the face
hereof, and (ii) the interest rate in effect for the ten calendar days
immediately before Maturity or earlier Redemption Date of this Security will be
that in effect hereon on the tenth calendar day preceding such Maturity or
Redemption Date. Except as provided in the next sentence and in the sixth
succeeding paragraph, the Interest Reset Date will be, if this Security resets
weekly (unless the Interest Rate Basis for this Security is the Treasury Rate),
the Wednesday of each week; if this Security resets weekly and the Interest
Reset Basis for this Security is the Treasury Rate, the Tuesday of each week; if
this Security resets monthly, the third Wednesday of each month; if this
Security resets quarterly, the third Wednesday of each March, June, September
and December; if this Security resets semi-annually, the third Wednesday of two
months of each year, as specified on the face hereof; and if this Security
resets annually, the third Wednesday of one month of each year, as specified on
the face hereof. If any Interest Reset Date would otherwise be a day that is
not a Market Day (as defined below) for this Security, the Interest Reset Date
shall be postponed to the next day that is a Market Day for this Security,
except that if the Interest Rate Basis specified on the face hereof is LIBOR and
such Market Day is in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Market Day for this Security.
Any payment on this Security due on any day which is not a Market Day
for this Security need not be made on such day, but may be made on the next
succeeding such Market Day (or, if the Interest Rate Basis specified on the face
hereof is LIBOR and such Market Day is in the next succeeding calendar month,
such payment shall be made on the immediately preceding Market Day for this
Security) with the same force and effect as if made on such due date, and no
-2-
<PAGE>
interest shall accrue for the period from and after such date.
"Market Day" means, for any Security other than a Security the rate of
interest on which shall be determined in accordance with the provisions under
the heading "LIBOR" below, any Business Day in The City of New York, and, for
any Security the rate of interest on which shall be determined in accordance
with the provisions under the heading "LIBOR" below, any such Business Day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market. "Business Day", as used herein with respect to any particular
location, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in such location are authorized or
obligated by law or executive order to close.
The rate of interest on this Security in effect on any day on or after
the first Interest Reset Date shall equal either (i) if such day is an Interest
Reset Date, the interest rate for such Interest Reset Date or (ii) if such day
is not an Interest Reset Date, the interest rate for the immediately preceding
Interest Reset Date; provided, however, that the interest rate in effect for the
-------- -------
ten calendar days immediately before Maturity of this Security will be that in
effect hereon on the tenth calendar day preceding such Maturity.
Except as otherwise specified in this paragraph, the rate of interest on
this Security for each Interest Reset Date shall be the rate determined in
accordance with the provisions below under the heading below corresponding to
the Interest Rate Basis specified on the face hereof:
Commercial Paper Rate. If the Interest Rate Basis of this Security is
---------------------
the Commercial Paper Rate, the interest rate hereon for any Interest Reset
Date shall equal (a) the Money Market Yield (calculated as described below)
of the per annum rate (quoted on a bank discount basis) on the relevant
Commercial Paper Interest Determination Date for commercial paper having
the Index Maturity specified on the face hereof, (i) as such rate is
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper" or (ii) if such rate is
not published before 3:00 p.m., New York City time, on the relevant
Calculation Date, then as such rate is published by the Federal Reserve
Bank of New York in its daily statis-
-3-
<PAGE>
tical release, "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or any successor publication published by the Federal Reserve
Bank of New York ("Composite Quotations") under the heading "Commercial
Paper" or (b) if by 3:00 p.m. New York City time, on such Calculation Date,
such rate is not yet published in either H.15(519) or Composite Quotations,
the Money Market Yield of the arithmetic mean of the offered per annum
rates (quoted on a bank discount basis) as of 11:00 a.m., New York City
time, on such Commercial Paper Interest Determination Date, of three
leading dealers of commercial paper in The City of New York (which may
include one or more of the Agents) selected by the Calculation Agent for
commercial paper of the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "AA", or the equivalent, from
a nationally recognized rating agency, in any of the above cases (a) or (b)
as adjusted (x) by the addition or subtraction of the Spread, if any,
specified on the face hereof, and then (y) by the multiplication by the
Spread Multiplier, if any, specified on the face hereof; provided, however,
-------- -------
that, if fewer than three dealers selected as provided above by the
Calculation Agent are quoting as mentioned in this sentence, the interest
rate hereon for such Interest Reset Date will be the interest rate hereon
in effect on such Commercial Paper Interest Determination Date. "Money
Market Yield" shall be a yield (expressed as a percentage) calculated in
accordance with the following formula:
Money Market Yield = 100 x 360 x D ,
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on a
bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the period from the Interest Reset Date to but excluding
the day that numerically corresponds to such Interest Reset Date (or, if
there is not any such numerically corresponding day, the last day) in the
calendar month that is the number of months corresponding to the Index
Maturity specified on the face hereof after the month in which such
Interest Reset Date falls.
Prime Rate. If the Interest Rate Basis of this Security is the Prime
----------
Rate, the interest rate hereon for any Interest Reset Date shall equal
(a)(i) the rate for the relevant Prime Rate Interest Determination Date
-4-
<PAGE>
set forth in H.15(519) under the heading "Bank Prime Loan", or (ii) if such
rate is not published before 9:00 a.m., New York City time, on the relevant
Calculation Date, then the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the display designated as
page "NYMF" on the Reuter Monitor Money Rates Service (or such other page
as may replace the NYMF page on that service for the purpose of displaying
prime rates or base lending rates of major United States banks) ("Reuters
Screen NYMF Page") as such bank's prime rate or base lending rate as in
effect for such Prime Rate Interest Determination Date as quoted on the
Reuters Screen NYMF Page on such Prime Rate Interest Determination Date or
(b) if fewer than four such rates appear on the Reuters Screen NYMF Page on
such Prime Rate Interest Determination Date, the arithmetic mean of the
prime rates or base lending rates (quoted on the basis of the actual number
of days in the year divided by a 360-day year) as of the close of business
on such Prime Rate Interest Determination Date by three major banks in The
City of New York selected by the Calculation Agent, in any of the above
cases (a) or (b) as adjusted (x) by the addition or subtraction of the
Spread, if any, specified on the face hereof, and then (y) by the
multiplication by the Spread Multiplier, if any, specified on the face
hereof; provided, however, that, if fewer than three banks selected as
-------- -------
provided above by the Calculation Agent are quoting as mentioned in this
sentence, the interest rate hereon for such Interest Reset Date will be the
interest rate hereon in effect on such Prime Rate Interest Determination
Date.
LIBOR. If the Interest Rate Basis of this Security is LIBOR, the
-----
interest rate hereon for any Interest Reset Date shall be determined in
accordance with the following provisions:
(a) On the relevant LIBOR Interest Determination Date, the interest
rate will be determined on the basis of the offered rates for deposits of
not less than U.S. $1,000,000 having the Index Maturity specified on the
face hereof, commencing on the second Market Day immediately following such
LIBOR Interest Determination Date, which appear on the display designated
as page "LIBO" on the Reuter Monitor Money Rates Service (or such other
page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks) (or, if such
display is not available at any such time, a comparable display, as
determined in the sole discretion of, and selected by,
-5-
<PAGE>
the Calculation Agent, of London interbank offered rates of major banks as
may be available from a similar service) ("Reuters Screen LIBO Page") as of
11:00 a.m., London time, on such LIBOR Interest Determination Date. If at
least two such offered rates appear on the Reuters Screen LIBO Page, the
interest rate hereon for such Interest Reset Date will be the arithmetic
mean of such offered rates as determined by the Calculation Agent, adjusted
(x) by the addition or subtraction of the Spread, if any, specified on the
face hereof, and then (y) by the multiplication by the Spread Multiplier,
if any, specified on the face hereof. If fewer than two offered rates
appear, the interest rate hereon for such LIBOR Interest Reset Date will be
determined as described in (b) below.
(b) For a LIBOR Interest Determination Date on which fewer than two
offered rates for the Index Maturity specified on the face hereof appear on
the Reuters Screen LIBO Page as described in (a) above, the interest rate
hereon will be determined on the basis of the rates at approximately 11:00
a.m., London time, on such LIBOR Interest Determination Date at which
deposits in U.S. dollars having the Index Maturity specified on the face
hereof are offered to prime banks in the London interbank market by four
major banks in the London interbank market selected by the Calculation
Agent commencing on the second Market Day immediately following such LIBOR
Interest Determination Date and in a principal amount equal to an amount of
not less than U.S. $1,000,000 that in the Calculation Agent's judgment is
representative for a single transaction in such market at such time (a
"Representative Amount"). The Calculation Agent will request the principal
London office of each of such banks to provide a quotation of its rate. If
at least two such quotations are provided, the interest rate hereon with
respect to such Interest Reset Date will be the arithmetic mean of such
quotations, as adjusted (x) by the addition or subtraction of the Spread,
if any, specified on the face hereof, and then (y) by the multiplication by
the Spread Multiplier, if any, specified on the face hereof. If fewer than
two quotations are provided, the interest rate hereon for such Interest
Reset Date will be the arithmetic mean of the rates quoted at approximately
11:00 a.m., New York City time, on such LIBOR Interest Determination Date
by three major banks in The City of New York, selected by the Calculation
Agent, for loans in U.S. dollars to leading European banks having the Index
Maturity specified on the face hereof commencing on the Interest Reset Date
and in a Repre-
-6-
<PAGE>
sentative Amount, as adjusted (x) by the addition or subtraction of the
Spread, if any, specified on the face hereof, and then (y) by the
multiplication by the Spread Multiplier, if any, specified on the face
hereof; provided, however, that, if fewer than three banks
-------- -------
selected as provided above by the Calculation Agent are quoting as
mentioned in this sentence, the interest rate hereon for such Interest
Reset Date will be the interest rate hereon in effect on such LIBOR
Interest Determination Date.
Treasury Rate. If the Interest Rate Basis of this Security is the
-------------
Treasury Rate, the interest rate hereon for any Interest Reset Date shall
equal (a) the rate for the auction on the relevant Treasury Interest
Determination Date of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified on the face hereof, (i) as such
rate is published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Auction Average (Investment)" or (ii) if such
rate is not so published by 9:00 a.m., New York City time, on the relevant
Calculation Date, then the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction as otherwise announced by the
United States Department of the Treasury or (b) if the results of such
auction of Treasury bills having the Index Maturity specified on the face
hereof are not published or reported as provided above by 3:00 p.m., New
York City time, on such Calculation Date or if no such auction is held
during such week, then the rate set forth in H.15(519) for the relevant
Treasury Interest Determination Date for the Index Maturity specified on
the face hereof under the heading "U.S. Government Securities/Treasury
Bills/Secondary Market" or (c) if such rate is not so published by 3:00
p.m., New York City time, on the relevant Calculation Date, then the yield
to maturity (expressed as a bond equivalent, on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean of the secondary market bid rates as of approximately 3:30 p.m., New
York City time, on such Treasury Interest Determination Date, of three
primary United States government securities dealers in The City of New York
selected by the Calculation Agent for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified on the face
hereof, in any of the above cases (a), (b) or (c) as adjusted (x) by the
addition or subtraction of the Spread, if any, specified on the face
hereof, and then
-7-
<PAGE>
(y) by the multiplication by the Spread Multiplier, if any, specified on
the face hereof; provided, however, that, if fewer than three dealers
-------- -------
selected as provided above by the Calculation Agent are quoting as
mentioned in this sentence, the interest rate hereon for such Interest
Reset Date will be the interest rate hereon in effect on such Treasury
Interest Determination Date.
CD Rate. If the Interest Rate Basis of this Security is the CD Rate,
-------
the interest rate hereon for any Interest Reset Date shall equal (a) the
rate for the relevant CD Rate Interest Determination Date for negotiable
certificates of deposit having the Index Maturity specified on the face
hereof (i) as published in H.15(519) under the heading "CDs (Secondary
Market)" or (ii) if such rate is not published before 9:00 a.m., New York
City time, on the relevant Calculation Date, then the rate on such CD Rate
Interest Determination Date for negotiable certificates of deposit having
the Index Maturity specified on the face hereof as published in Composite
Quotations under the heading "Certificates of Deposit" or (b) if by 3:00
p.m., New York City time, on such Calculation Date such rate is not
published in either H.15(519) or Composite Quotations, the arithmetic mean
of the secondary market offered rates, as of 10:00 a.m., New York City
time, on such CD Rate Interest Determination Date, of three leading nonbank
dealers of negotiable U.S. dollar certificates of deposit in The City of
New York selected by the Calculation Agent for negotiable certificates of
deposit of major United States money market banks with a remaining maturity
closest to the Index Maturity specified on the face hereof in a
denomination of U.S. $5,000,000, in any of the above cases (a) or (b) as
adjusted (x) by the addition or subtraction of the Spread, if any,
specified on the face hereof, and then (y) by the multiplication by the
Spread Multiplier, if any, specified on the face hereof; provided, however,
-------- -------
that, if fewer than three dealers selected as provided above by the
Calculation Agent are quoting as mentioned in this sentence, the interest
rate hereon for such Interest Reset Date will be the interest rate hereon
in effect on such CD Rate Interest Determination Date.
Federal Funds Rate. If the Interest Rate Basis of this Security is
------------------
the Federal Funds Rate, the interest rate hereon for any Interest Reset
Date shall equal (a) the rate on the relevant Federal Funds Interest
Determination Date for Federal Funds (i) as published in H.15(519) under
the heading "Federal Funds (Effec-
-8-
<PAGE>
tive)" or (ii) if such rate is not published before 9:00 a.m., New York
City time, on the relevant Calculation Date, then the rate on such Federal
Funds Interest Determination Date as published in Composite Quotations
under the heading "Federal Funds/Effective Rate" or (b) if by 3:00 p.m.,
New York City time, on such Calculation Date such rate is not published in
either H.15(519) or Composite Quotations, the arithmetic mean of the rates,
as of 9:00 a.m., New York City time, on such Federal Funds Interest
Determination Date, for the last transaction in overnight Federal Funds
arranged by three leading brokers of Federal Funds transactions in The City
of New York selected by the Calculation Agent, in any of the above cases
(a) or (b) as adjusted (x) by the addition or subtraction of the Spread, if
any, specified on the face hereof, and then (y) by the multiplication by
the Spread Multiplier, if any, specified on the face hereof; provided,
--------
however, that, if fewer than three brokers selected as provided above by
-------
the Calculation Agent are quoting as mentioned in this sentence, the
interest rate hereon for such Interest Reset Date will be the interest rate
hereon in effect on such Federal Funds Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, specified on the face hereof. In addition, the interest rate hereon
will in no event be higher than the maximum rate permitted by New York law, as
the same may be modified by United States law of general application.
The Company will at all times appoint and maintain a banking institution
that is not an Affiliate of the Company as Calculation Agent hereunder. The
Company has initially appointed the Calculation Agent specified on the face
hereof as such Calculation Agent and will give prompt written notice to the
Trustee of any change in such appointment. The Company will cause the
Calculation Agent to calculate the interest rate on this Security for any
Interest Reset Date in accordance with the foregoing on or before the
Calculation Date pertaining to the related Interest Determination Date. Except
as otherwise provided herein, all percentages resulting from any calculations
will be rounded upwards, if necessary, to the next higher one hundred-thousandth
of a percentage point (.., 9.876541% (or .09876541) being rounded to 9.87655%
(or .0987655)), and all U.S. dollar amounts used in or resulting from such
calculations will be rounded to the nearest cent (with one-half cent being
rounded upwards). The Calculation Agent's
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<PAGE>
determination of any interest rate will be final and binding in the absence of
manifest error.
Upon the request of the Holder of this Security, the Company will cause
the Calculation Agent to provide to such Holder the interest rate hereon then in
effect and, if determined, the interest rate hereon which will become effective
on the next Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date if
the rate of interest hereon shall be determined in accordance with the
provisions under the headings above entitled "Commercial Paper Rate" (the
"Commercial Paper Interest Determination Date"), "Prime Rate" (the "Prime Rate
Interest Determination Date"), "LIBOR" (the "LIBOR Interest Determination
Date"), "CD Rate" (the "CD Rate Interest Determination Date") and "Federal Funds
Rate" (the "Federal Funds Rate Interest Determination Date") will be the second
Market Day preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date if the rate of interest hereon shall be
determined in accordance with the provisions under the heading above entitled
"Treasury Rate" (the "Treasury Interest Determination Date") will be the day of
the week in which such Interest Reset Date falls on which Treasury bills would
normally be auctioned. Treasury bills are usually sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
usually held on the following Tuesday, except that such auction may be held on
the preceding Friday. If, as the result of a legal holiday, an auction is so
held on the preceding Friday, such Friday will be the Treasury Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date shall fall on any Interest Reset Date for a
Treasury Rate Security, then such Interest Reset Date shall instead be the first
Market Day immediately following such auction date.
The Calculation Date pertaining to any LIBOR Interest Determination Date
for any Security shall be such LIBOR Interest Determination Date, and the
Calculation Date pertaining to any other Interest Determination Date for any
Security shall be the tenth day after such Interest Determination Date or, if
any such day is not a Market Day for such Security, the next succeeding such
Market Day.
Payments of interest hereon with respect to any Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date;
provided, however, that, if the Interest Reset Period with respect to this
- -------- -------
Security is weekly, the interest payable on any Interest
-10-
<PAGE>
Payment Date, other than interest payable on the date on which principal is
payable, will include interest accrued to but excluding the day following the
next preceding Regular Record Date.
Accrued interest hereon from the Original Issue Date or from the last
date to which interest has been paid is calculated by multiplying the principal
amount of this Security by an accrued interest factor. Such accrued interest
factor is computed by adding the interest factor calculated for each day from
the Original Issue Date, or from the last date to which interest has been paid,
to but excluding the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the interest rate (expressed as a decimal) applicable to such day by
360 or, if the Interest Rate Basis for this Security is the Treasury Rate, by
the actual number of days in the year.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this Security or (ii) certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security or Securities issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not
-11-
<PAGE>
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
(including, in the case of any Global Security, certain additional limitations)
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company at the Place of Payment, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar, duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series and of like tenor are issuable only in
registered form without coupons in denominations of $100,000 and any integral
multiple of
-12-
<PAGE>
$1,000 in excess thereof. The Securities of this series may be issued, in whole
or in part, in the form of one or more Global Securities bearing the legend
specified in the Indenture regarding certain restrictions on registration of
transfer and exchange and issued to The Depository Trust Company as depositary
for Global Securities of this series (the "Depositary") or its nominee and
registered in the name of the Depositary or such nominee. As provided in the
Indenture and subject to certain limitations (including, in the case of any
Global Security, certain additional limitations) therein set forth, Securities
of this series are exchangeable for a like aggregate principal amount of
Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Security shall be governed by and construed in accordance with
the laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
-13-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
the within Security, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with the right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - __________ Custodian _________
(Cust) (Minor)
under Uniform Gifts to Minors Act
______________________________
(State)
Additional abbreviations may also be used
though not in the above list.
_____________________________
-14-
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto__________
___________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________
/______________________/
____________________________________________________________
____________________________________________________________
(Please Print or Typewrite Name and Address
Including Postal Zip Code of Assignee)
____________________________________________________________
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints ___________________________________
____________________________________________________________
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:______________
Signature Guaranteed
__________________________ _________________________
NOTICE: Signature must be NOTICE: The signature to
guaranteed by a member firm this assignment must
of the New York Stock correspond with the name
Exchange or a commercial as written upon the face of
bank or trust company. the within Security in every
particular, without alteration
or enlargement or any change
whatever.
-15-
<PAGE>
EXHIBIT 4.2
CAPITAL HOLDING CORPORATION
Capital Holding Center
400 West Market Street
Louisville, Kentucky 40202
January 14, 1994
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Gentlemen:
This Letter Agreement confirms our appointment of you and any corporation
into which you may be merged or converted or with which you may be consolidated,
or any corporation resulting from any merger, consolidation or conversion to
which you shall be a party, or any corporation succeeding to your corporate
agency or corporate trust business as Paying Agent and Calculation Agent in
respect of, and in accordance with the terms and provisions of a series of
Securities to be issued under the Indenture, dated as of January 1, 1994,
(herein called the "Indenture"), between Capital Holding Corporation (the
"Company") and Morgan Guaranty Trust Company of New York as Trustee (the
"Trustee"), and entitled the Medium-Term Notes, Series D (the "Medium-Term
Notes") of the Company, which Medium-Term Notes are to be issued substantially
in the forms attached hereto as Annex I. All capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Indenture.
This Letter Agreement further confirms our appointment of you and any such
successor corporation as Issuing Agent in connection with certain procedures to
be followed with respect to the settlement of sales of Medium-Term Notes in
accordance with the Administrative Procedure (the "Procedure") attached hereto
as Annex II.
You agree to perform the duties and obligations and carry out the
transactions ascribed to the Paying Agent and Calculation Agent in the
Indenture, the Notes and the Procedure (the Indenture, the Notes, the Procedure
and this Letter Agreement being referred to collectively herein as the
"Documents") and to the Issuing Agent in the Procedure. In addition, you will
furnish the Company with appropriate records of all transactions
<PAGE>
carried out by you as Paying Agent and as Calculation Agent and as Issuing Agent
at such intervals as the Company shall from time to time request.
You and the Company agree as follows:
(i) You undertake to perform such duties and only such duties as are
specifically set forth in the Documents, you shall be responsible only for the
performance of such duties and obligations as are specifically set forth in the
Documents and no implied covenants or obligations shall be read into the
Documents against you.
(ii) In the absence of bad faith on your part, you may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to you and conforming
to the requirements of the Documents; but in the case of any such certificates
or opinions which pursuant to the Documents are specifically required to be
furnished to you, you shall be under a duty to examine the same to determine
whether or not they conform to the requirements of the Documents.
(iii) No provision of the Documents shall be construed to relieve you from
liability for your own negligent action, your own negligent failure to act, or
your own wilful misconduct, except that
(a) this clause (iii) shall not be construed to limit the effect of
clauses (i) and (ii) above;
(b) you shall not be liable for any error of judgment made in good
faith by any of your officers or employees unless it shall be proved
that you or they were negligent in ascertaining the pertinent facts;
and
(c) no provision of the Documents shall require you to expend or risk
you own funds or otherwise incur any financial liability in the
performance of any of your duties under the Documents, or in the
exercise of any of your rights or powers, if you shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
you.
(iv) Whether or not therein expressly so provided, every provision of
the Documents relating to your conduct, affecting your liability or affording
protection to you shall be subject to the provisions of clauses (i), (ii) and
(iii) above.
(v) Subject to clauses (i), (ii), (iii) and (iv) above:
-2-
<PAGE>
(a) you may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by you to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned in the Documents
shall be sufficiently evidenced by a written request or order signed
in the name of the Company by its Chairman of the Board, its President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary, an Assistant Secretary, or an Assistant General Counsel and
any resolution of the Board of Directors may be sufficiently evidenced
by a copy of a resolution certified by the Secretary, an Assistant
Secretary, or an Assistant General Counsel of the Company to have been
duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification;
(c) whenever in the performance of your duties under the Documents you
shall deem it reasonably desirable that a matter be proved or
established prior to taking, suffering or omitting any action under
the Documents, you (unless other evidence be specifically prescribed
in the Documents) may, in the absence of bad faith on your part, rely
upon a certificate signed by the Chairman of the Board, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary, an Assistant Secretary or an Assistant General Counsel of
the Company;
(d) you may consult with counsel and the written advice of such
counsel or any written opinion of such counsel as shall be acceptable
to you (and who may be counsel to the Company) shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by you under the Documents in good faith and in
reliance thereon;
(e) you shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document, but you, in your discretion, may make such further inquiry
or investigation into such facts or matters as you may reasonably see
fit, and, if you shall determine to make such further
-3-
<PAGE>
inquiry or investigation, you shall be entitled to conduct, during the
Company's regular business hours, a reasonable examination of the
books, records and premises of the Company, personally or by agent or
attorney; and
(f) you shall not be liable for any action taken or omitted by you in
good faith and believed by you to be authorized or within the
discretion, rights or powers conferred upon you by the Documents.
Neither you nor your officers or employees shall be required to
ascertain whether any issuance or sale of Notes has been duly
authorized or is in compliance with any other agreement to which the
Company is a party.
The Company agrees:
(i) to pay to you such reasonable compensation as shall be agreed to
by you and the Company from time to time for all services rendered by you
pursuant to the Documents;
(ii) to reimburse you upon your request for all reasonable expenses,
disbursements and advances incurred or made by you in accordance with the
Documents (including the reasonable compensation and the reasonable expenses and
disbursements of your agents and counsel), except to the extent any such
expense, disbursement or advance is caused by your own negligence, bad faith, or
wilful misconduct;
(iii) to indemnify and hold harmless Morgan, its directors, officers,
employees and duly authorized agents from and against any loss, liability
(including liability for penalties), claim, damage, action, suit, judgment, cost
or expense except to the extent caused by the negligence, bad faith, or wilful
misconduct of Morgan or such director, officer, employee or agent, arising out
of or in connection with the performance of its or their duties under the
Documents, including the reasonable costs and expenses of defending yourself
against any such claim or liability.
The obligations of the Company under clauses (ii) and (iii) immediately
above shall survive termination of this Agreement.
(iv) from time to time to furnish you with a certificate of the
Company certifying the incumbency and specimen signatures of officers authorized
(a) to execute Notes on behalf of the Company by manual or facsimile signature
and (b) to give instructions to you in connection with the issuance of Notes (an
"Authorized Representative").
All Note issuance instructions shall be given by an Authorized
Representative by means of the electronic timesharing
-4-
<PAGE>
facility known as the Morgan Paper Issue System (the "MPI System"); provided
--------
that such instructions may be given by telephone, by facsimile transmission, or
in writing if the MPI System is inoperative. Instructions given by telephone,
by facsimile transmission, or in writing shall be given by an Authorized
Representative who has been previously certified in writing to you as a person
authorized to give such instructions hereunder.
Instructions given via the MPI System shall be entered as prescribed in the
user documentation provided by you and all instructions, whether delivered by
the MPI System, by telephone, by facsimile transmission, or in writing must be
received by you by the times set forth in the Procedure.
It is understood that although you are instructed to deliver Notes against
payment in immediately available funds, delivery of any certificated Notes, in
accordance with the custom prevailing in the market, will be made before actual
receipt of payment. Once you have delivered any certificated Notes to an Agent
or its designated consignee or the designated consignee of the Company against
receipt for payment, the Company shall bear the risk that such Agent or
designated consignee fails to remit payment for such Notes or to return the same
to you. It is further understood that each delivery of Notes hereunder shall be
subject to the rules of the New York Clearing House in effect at the time of
such delivery.
Telephone instructions given by an Authorized Representative to you will be
electronically voice-recorded by you, and the Company hereby consents to such
recording. All issuance instructions given by telephone shall be immediately
repeated back to the party giving such instructions to confirm that such
instructions were correctly understood. Should any discrepancy develop with
respect to such telephonic instructions, the instructions as repeated by you
will be deemed the controlling and proper instructions. Subject to clauses (i),
(ii), (iii), and (iv) appearing on pages two and three of this Letter Agreement,
you shall incur no liability to the Company in acting hereunder upon telephonic
or other instructions contemplated hereby which the recipient thereof believed
in good faith to have been given by an Authorized Representative.
It is understood that the MPI System timesharing services which may be
utilized by the Company and you in the issuance of Notes and maintenance of the
note register are furnished to you by The Service Bureau Company, a division of
Control Data Corporation ("SBC"). SBC has granted permission to you to allow
your clients to use such timesharing services, and in consideration for such
permission, it is understood and agreed that such services will be supplied to
the Company "as is,"
-5-
<PAGE>
without warranty by SBC. The Company hereby waives any claims it may have
against SBC arising out of such timeshare services.
You may at any time resign as Paying Agent, Calculation Agent or Issuing
Agent by giving written notice to the Company of such intention on your part,
specifying the date on which your desired resignation shall become effective;
provided, however, that such date shall be not less than three months after the
- -----------------
giving of such notice. You may be removed at any time by the filing with you of
an instrument in writing signed by a duly authorized officer of the Company and
specifying such removal and the date upon which it is intended to become
effective. Such resignation or removal shall take effect on the date of the
appointment by the Company of a successor agent(s) and the acceptance of such
appointment by such successor agent(s). In the event of your resignation, if a
successor agent(s) has not been appointed by the Company within three months
after the giving of notice by you of your intention to resign, you may, at the
expense of the Company, petition any court of competent jurisdiction for
appointment of a successor agent(s).
If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, whereupon this letter and the acceptance
thereof by you shall constitute a binding agreement between you and us in
accordance with its terms.
Very truly yours,
CAPITAL HOLDING CORPORATION
By: /s/ Sherry F. Hardy
__________________________
Sherry F. Hardy
Assistant General Counsel
Accepted in New York,
New York, as of the date
hereof:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:/s/ Marlene Fahey
__________________________
Vice President
-6-
<PAGE>
EXHIBIT 4.3
[DTC LOGO]
BOOK-ENTRY-ONLY CORPORATE MEDIUM-TERM NOTE
(GLOBAL CERTIFICATE) PROGRAM
LETTER OF REPRESENTATIONS
[TO BE COMPLETED BY ISSUER, ISSUING AGENT, AND PAYING AGENT]
Capital Holding Corporation
--------------------------------------------------
[Name of Issuer]
Morgan Guaranty Trust Company of New York
DTC Participant Number
--------------------------------------------------
[Name and DTC Participant Number of Issuing Agent]
Morgan Guaranty Trust Company of New York
DTC Participant Number
--------------------------------------------------
[Name and DTC Participant Number of Paying Agent]
January 14, 1994
----------------
(Date)
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street, 49th Floor
New York, NY 10041-0099
Re: Capital Holding Corporation
------------------------------------------------------------
Medium-Term Notes, Series D
------------------------------------------------------------
(Description of Program, including series designator
and rank of indebtedness)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the issuance by Issuer from time to time of notes under its medium-
term note program described above (the "Notes"). Issuing Agent will act as
issuing agent with respect to the Notes. Paying Agent will act as paying agent
with respect to the Notes. The Notes will be issued
<PAGE>
pursuant to a prospectus supplement, private placement memorandum, or other such
document authorizing the issuance of the Notes dated as of January 14, 1994.
----------------
Paying Agent has entered into a Medium-Term Note Certificate Agreement with
The Depository Trust Company ("DTC") dated as of April 18, 1989, pursuant to
--------------
which Paying Agent will act as custodian of Global Certificates evidencing the
Notes, when issued. Paying Agent will amend Exhibit A to such Medium-Term Note
Certificate Agreement to include the program designed above prior to issuance of
the Notes.
To induce DTC to accept the Notes as eligible for deposit at DTC and to act
in accordance with its Rules with respect to the Notes, Issuer, Issuing Agent,
and Paying Agent make the following representations to DTC:
1. Each issue of the Notes shall be evidenced by one Global Certificate
in registered form registered in the name of DTC's nominee, Cede & Co., and such
Certificate shall represent 100% of the principal amount of such issue of the
Notes. If, however, the principal amount of the issue exceeds $150,000,000, one
Certificate shall be issued with respect to each $150,000,000 of principal
amount and an additional Certificate shall be issued with respect to any
remaining principal amount.
2. Issuer or Issuing Agent has obtained from the CUSIP Service Bureau a
written list of approximately 900 nine-character numbers (the basic first six
characters of which are the same and uniquely identify Issuer and the Notes to
be issued under its medium-term note program described above), and Issuing Agent
has delivered a copy of such list to DTC's Underwriting Department. The CUSIP
numbers on such list have been reserved for future assignment to issues of the
Notes. At any time when fewer than 100 of the CUSIP numbers on such list remain
unassigned, Issuer or Issuing Agent shall promptly obtain from the CUSIP Service
Bureau an additional written list of approximately 900 such numbers, and Issuing
Agent shall promptly deliver a copy of such list to DTC's Underwriting
Department.
3. When Notes are to be issued through DTC, Issuing Agent shall give
notice to Paying Agent and issuance instructions to DTC in accordance with DTC's
Procedures, including DTC's Issuing/Paying Agent Procedures (the "Procedures"),
a copy of which previously has been furnished to Issuing Agent and Paying Agent.
The giving of such issuance instructions, which include delivery instructions,
to DTC shall constitute:
2
<PAGE>
(a) a representation that the Notes are delivered, in connection with
their issuance, upon payment or the promise to pay by the receivers of such
deliveries; and
(b) a confirmation that a Certificate (or Certificates) evidencing
such Notes, in the form described in Paragraph 1, has been issued and
authenticated.
4. If issuance of Notes through DTC is scheduled to take place one or
more days after Issuing Agent has given issuance instructions to DTC, Issuing
Agent may cancel such issuance by giving a cancellation instruction to DTC in
accordance with the Procedures.
5. At any time that Paying Agent has Notes in its DTC account, it may
request withdrawal of such Notes from DTC by giving a withdrawal instruction to
DTC in accordance with the Procedures. Upon DTC's acceptance of such withdrawal
instruction, Paying Agent shall reduce the principal amount of the Certificate
evidencing the Notes accordingly.
6. In the event of any solicitation of consents from or voting by holders
of the Notes, issuer, Issuing Agent, or Paying Agent 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.
7. In the event of a full or partial redemption of an issue of
outstanding Notes, Issuer or Paying Agent shall send a notice to DTC specifying:
(a) the amount of the redemption; and (b) the date such notice is to be mailed
to beneficial owners or published (the "Publication Date"). Such notice shall
be sent to DTC by a secure means (e.g., legible telecopy, registered or
certified mail, overnight delivery) in a timely manner designed to assure that
such notice is in DTC's possession no later than two business days before the
Publication Date. Issuer or Paying Agent shall forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
for multiple CUSIP numbers (if applicable) which includes a manifest or list of
each CUSIP submitted in that transmission. (The party sending such notice shall
have a method to verify subsequently the use of such means and the timeliness of
such notice.) The Publication Date shall be not less than 30 days nor more than
60 days prior to the redemption date. It is understood that DTC's current
practice is to perform its call lottery in $1,000 principal amount increments.
8. (a) After the first interest payment has been made on individual
issues of the Notes (having different original issue dates but otherwise the
same terms, including interest rate, interest payment dates, rank, stated
maturity, repayment options, redemption provisions, and currently in which the
issue is denominated), to consolidate such issues Issuing Agent shall deliver to
DTC and Paying Agent (as well as to the CUSIP Service Bureau and interactive
Data Corporation) at least 30 days before the day on which the consolidation is
to be effective, as determined by Issuing Agent (the "Exchange Date"), a written
notice of consolidation specifying the CUSIP numbers of the individual issues to
be
3
<PAGE>
consolidated and the new CUSIP number of the consolidated issue. The Exchange
Date shall be least 30 days prior to an interest payment date for such issues.
(b) On the Exchange Date, Paying Agent shall arrange for the exchange
of the Certificates evidencing the issues to be consolidated for a single
Certificate bearing a new CUSIP number (the "replacement Certificate"). The
replacement Certificate shall bear the original issue dates, together with the
respective principal amounts to which they relate, for all exchanged
Certificates. Notwithstanding the foregoing, if the Certificates to be
exchanged exceed $150,000,000 in aggregate principal amount, one replacement
Certificate shall be issued with respect to each $150,000,000 of the aggregate
principal amount and an additional replacement Certificate shall be issued with
respect to any remaining aggregate principal amount.
9. (a) With respect to an issue of Notes that are repayable at the
option of the holder, Paying Agent shall send on the day which is the earlier of
60 days prior to the purchase date or 5 days prior to the start of the tender
exercise period a notice to DTC listing the CUSIP number of such issue, the
start date and end date of the tender exercise period, the repayment price, and
the purchase date. Paying Agent shall send such notice with respect to an issue
of Notes with a "one time only" repayment option when such option arises; in the
case of an issue of Notes that are repayable on a regular quarterly, semi-
annual, annual, or less frequent cycle, Paying Agent shall send such notice with
respect to each repayment option as it arises, or shall send such notice with
respect to all repayment options when the first such option arises; and, for an
issue of Notes that are repayable on a regular monthly cycle, Paying Agent shall
send such notice with respect to the first repayment option and annually
thereafter; provided, however, Paying Agent shall in all cases promptly send
notice of any change in the issue's operational terms affecting the repayment
options (e.g., an upcoming mandatory tender), when known.
(b) Paying Agent recognizes that DTC will use its Repayment Option
Procedures, a copy of which previously has been furnished to Paying Agent, to
process tenders of the Notes. It is understood that under the Repayment Option
Procedures DTC will receive daily instructions from its Participants to tender
Notes for purchase. On the purchase date, if -- after paying DTC for tendered
Notes -- Paying Agent wishes to retire the tendered Notes, it shall notify DTC
to reduce the principal amount of the issue of the Notes by the aggregate
principal amount of the tendered Notes and shall reduce the principal amount of
the Certificate evidencing the tendered Notes accordingly.
10. (a) Issuer and Paying Agent shall take all steps necessary in order
for any interest payment date on any issue of the Notes together with the amount
of interest payable, as well as changes in the interest rates on variable rate
Notes as they occur from time to time, to be listed in the appropriate daily
bond report published by Standard & Poor's Corporation.
4
<PAGE>
(b) With regard to variable rate Notes on which the interest rate is
reset daily or weekly, Paying Agent shall, in accordance with the Procedures,
deliver to DTC's Dividend Department, Standard & Poor's Corporation and
Interactive Data Corporation on each day on which the amount of interest to be
paid on the following payment date (including the issue's first interest payment
date) is determined a listing of the CUSIP number assigned to each such issue
along with corresponding specifications of the record date, payment date, and
dollar amount of interest per $1,000 principal amount of the Notes to be paid on
such payment date. For variable rate Notes on which the interest rate is reset
monthly, quarterly, semiannually, or annually, Paying Agent shall deliver a
similar listing to Standard & Poor's Corporation and Interactive Data
Corporation on the day interest payment amounts are determined.
(c) With regard to each issue of fixed rate Notes, promptly after
each record date Paying Agent shall deliver to DTC a written notice specifying
by CUSIP number the amount of interest to be paid on each such issue on the
following interest payment date, other than at maturity and the total of such
amounts.
11. Paying Agent shall deliver to DTC on or about the first business day
of each month a written list of principal and interest to be paid on each issue
of the Notes maturing in the following month. Paying Agent and DTC shall
confirm the amounts of principal and interest to be paid on each such issue on
or about the fifth business day preceding its maturity.
12. All notices and payment advices sent to DTC shall contain the CUSIP
number of the issue of the Notes.
13. Notices to DTC pursuant to Paragraph 6 by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and receipt
of such notices shall be confirmed by telephoning (212) 709-6870. Notices to
DTC pursuant to Paragraph 6 by mail or by any other means shall be sent to:
Reorganization Manager
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
14. Notices to DTC pursuant to Paragraph 7 by telecopy shall be sent to
DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190. If the
party sending the notice does not receive a telecopy receipt from DTC confirming
that the notice has been received, such party shall telephone (516) 227-4070.
Notices to DTC pursuant to Paragraph 7 by mail or by any other means shall be
sent to:
5
<PAGE>
Call Notification Department
The Depository Trust Company
711 Stewart Street
Garden City, NY 11530-4719
15. Notices to DTC pursuant to Paragraphs 8 and 11 and notices of other
corporate actions (including mandatory tenders, exchanges, and capital changes)
by telecopy shall be sent to DTC's Reorganization Department at (212) 709-1093
or (212) 709-1094, and receipt of such notices shall be confirmed by telephoning
(212) 709-6884. Notices to DTC pursuant to Paragraphs 8 and 11 and notices of
other corporate actions by mail or by any other means shall be sent to the
address indicated in Paragraph 13.
16. Notices to DTC pursuant to Paragraph 9 by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and receipt
of such notices shall be confirmed by telephoning (212) 709-1470. Notices to
DTC pursuant to Paragraph 9 by mail or by any other means shall be sent to the
address indicated in Paragraph 13.
17. Notices to DTC pursuant to Paragraph 10(b) and 10(c) by telecopy shall
be sent to DTC's Dividend Department at (212) 709-1723 or (212) 709-1686, and
receipt of such notices shall be confirmed by telephoning (212) 709-1270.
Notices to DTC pursuant to Paragraphs 10(b) and 10(c) by mail or by any other
means shall be sent to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
18. Transactions in the Notes shall be eligible for same-day funds
settlement in DTC's SDFS system.
A. Interest payments shall be received by Cede & Co., as nominee of
DTC, or its registered assigns in same-day funds on each payment
date (or the equivalent in accordance with existing arrangements
between Issuer or Paying Agent and DTC). Such payments shall be
made payable to the order of Cede & Co.
B. Principal payments shall be made in same-day funds on each
payment date by Paying in the manner set forth in the SDFS Paying
Agent Operating Procedures, a copy of which previously has been
furnished to Paying Agent.
6
<PAGE>
19. DTC may direct Issuer, Issuing Agent, or Paying Agent to use any other
telephone number or address as the number or address to which notices or
payments of interest or principal may be sent.
20. Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Security certificate(s); and (b)
acknowledges that neither DTC's Participants nor any person having an interest
in the Securities shall be deemed to have notice of the provisions of the
Security certificates by virtue of submission of such certificate(s) to DTC.
21. In the event Issuer determines that beneficial owners of Notes shall
be able to obtain certificated Notes, Issuer or Paying Agent shall notify DTC of
the availability of Note certificates, and shall issue, transfer, and exchange
Note certificates in appropriate amounts, as required by DTC and others.
22. DTC may discontinue providing its services as securities depository
with respect to the Notes at any time by giving reasonable notice to Issuer or
Paying Agent (at which time DTC will confirm the Issuer or Paying Agent the
aggregate amount of Notes outstanding by CUSIP number). Under such
circumstances, at DTC's request Issuer and Paying Agent shall cooperate fully
with DTC by taking appropriate action to make available one or more separate
certificates evidencing Notes to any DTC Participant having Notes credited to
its DTC accounts.
23. Nothing herein shall be deemed to require Issuing Agent or Paying
Agent to advance funds on behalf of Issuer.
Very truly yours,
Capital Holding Corporation
------------------------------------
(Issuer)
By: /s/ Sherry F. Hardy
------------------------------------
(Authorized Officer's Signature)
Sherry F. Hardy
Assistant General Counsel
7
<PAGE>
Morgan Guaranty Trust Company of
New York
------------------------------------
(Issuing Agent)
By: /s/ Marlene Fahey
---------------------------------
(Authorized Officer's Signature)
Morgan Guaranty Trust Company of
New York
------------------------------------
(Paying Agent)
By: /s/ Marlene Fahey
--------------------------------
(Authorized Officer's Signature)
Notes:
- -----
A. Current addresses for delivering notices to
the CUSIP Service Bureau, Interactive Data
Corporation, and Standard & Poor's
Corporation are listed in DTC's Medium-
Term Note Issuing/Paying Agent Procedures,
a copy of which can be obtained from DTC's
Underwriting Department.
B. Schedule A contains statements that DTC
believes accurately describe DTC, the method of
effecting book-entry transfers of securities
distributed through DTC, and certain related
matters.
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: /s/ James McGeevey
------------------------------------
(Authorized Officer)
cc: Sales Agent
Sales Agent's Counsel
8
<PAGE>
SCHEDULE A
----------
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
-----------------------------------
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO CERTAIN ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered in the name of Cede &
Co. (DTC's partnership nominee). One fully-registered Security certificate will
be issued for [each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If, however, the
aggregate principal amount of [any] issue exceeds $150 million, one certificate
will be issued with respect to each $150 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants")
deposit with DTC, DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities on
DTC records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing
<PAGE>
their ownership interests in Securities, except in the event that use of the
book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants to Indirect Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on payable date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on payable date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, the Agent, or the
Issuer, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal and interest to DTC is the
responsibility of the Issuer or the Agent, disbursement of such payments to
Direct Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Participants.
[9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to the
[Tender/Remarketing] Agent, and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to the [Tender/Remarketing] Agent. The
-ii-
<PAGE>
requirement for physical delivery of Securities in connection with a demand for
purchase or a mandatory purchase will be deemed satisfied when the ownership
rights in the Securities are transferred by Direct Participants on DTC's
records.]
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to the
Issuer or the Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to be
printed and delivered.
11. The Issuer may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor securities depository). In that
event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Issuer believes to be reliable,
but the Issuer takes no responsibility for the accuracy thereof.
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