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Exhibit 1
Countrywide Home Loans, Inc.
U.S. $3,000,000,000
Medium-Term Notes, Series I
Due Nine Months or More
From Date of Issue
Payment of Principal, Premium, if any, and Interest Fully and Unconditionally
Guaranteed by
Countrywide Credit Industries, Inc.
SELLING AGENCY AGREEMENT
June 15, 2000
Lehman Brothers Inc. Merrill Lynch, Pierce, Fenner & Smith
3 World Financial Ce Incorporated
New York, New York 10285 World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Banc of America Securities LLC J.P. Morgan Securities Inc.
100 North Tryon Street 60 Wall Street
NC1-007-07-01 New York, New York 10260
Charlotte, North Carolina 28255
Chase Securities Inc. Morgan Stanley & Co. Incorporated
270 Park Avenue 1585 Broadway
New York, New York 10017 New York, New York 10036
Deutsche Bank Securities Inc. Salomon Smith Barney Inc.
31 W. 52nd Street Seven World Trade Center
New York, New York 10019 New York, New York 10048
Goldman, Sachs & Co. Countrywide Securities Corporation
85 Broad Street 4500 Park Granada
New York, New York 10004 Calabasas, California 91302
Ladies and Gentlemen:
Countrywide Home Loans, Inc., a New York corporation (the "Company"),
confirms its agreement with each of you (collectively, the "Agents") with
respect to the issue and sale by the Company of up to U.S. $3,000,000,000
aggregate initial offering price of its Medium-Term Notes, Series I, Due Nine
Months or More from Date of Issue (the "Notes"). The Notes will be fully and
unconditionally guaranteed as to payment of principal, premium, if any, and
interest (the "Guarantees") by Countrywide Credit Industries, Inc. (the
"Guarantor"). The Notes and the Guarantees will be issued under an indenture,
dated as of January 1, 1992, as supplemented by Supplemental Indenture No. 1
thereto, dated as of June 15, 1995 (collectively, the "Indenture"), among the
Company, the Guarantor and The Bank of New York, as trustee (the "Trustee").
Unless otherwise specified in the Pricing Supplement referred to below, the
Notes will be issued in minimum denominations of U.S. $1,000 and in
denominations exceeding such amount by integral multiples of U.S. $1,000, and if
denominated in a currency or currency unit other than U.S. dollars, the
equivalent in such other currency or currency unit (the "Specified Currency") as
determined in accordance with the Indenture, of U.S. $1,000 (rounded down to an
integral multiple of 1,000 units of such Specified Currency) and any larger
amount that is an integral multiple of 1,000 units of such Specified Currency,
will be issued only in fully registered certificated or book-entry form, and
will be issued in the currency or currency units and will have the maturities,
annual interest rates (whether fixed or floating), redemption provisions and
other terms set forth in a pricing supplement (the "Pricing Supplement") to the
Prospectus referred to below. The Notes will be issued, and the terms thereof
established, in accordance with the Indenture and the Medium-Term Note
Administrative Procedures attached hereto as Exhibit A (the "Procedures"). The
Procedures may only be amended by written agreement of the Company and each
Agent after notice to, and in the case of amendments which affect the rights,
duties or obligations of the Trustee, with the approval of, the Trustee.
1. Representations and Warranties. The Company and the Guarantor, jointly and
severally, represent and
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warrant to, and agree with, each Agent that:
(a) The Company and the Guarantor meet the
requirements for use of Form S-3 under the Securities Act of
1933, as amended (the "Act") and rules and regulations ("Rules
and Regulations") of the Securities and Exchange Commission
(the "Commission") promulgated thereunder and have filed with
the Commission a registration statement on Form S-3 (File Nos.
333-82583 and 333-82583-01) (the "Registration Statement"),
and a related preliminary prospectus for the registration
under the Act of certain securities, including the Notes and
the Guarantees (collectively, the "Securities") and the
offering thereof from time to time in accordance with Rule 415
of the Rules and Regulations, which Registration Statement has
been declared effective by the Commission and copies of which
have heretofore been delivered to you. Such Registration
Statement, as it may be amended or supplemented, meets the
requirements set forth in Rule 415(a)(1)(x) and (a)(2) of the
Rules and Regulations and complies in all other material
respects with said Rule. In connection with the sale of Notes,
the Company and the Guarantor propose to file with the
Commission pursuant to Rule 424 under the Act a supplement to
the form of prospectus included in such Registration Statement
relating to the Notes and the Guarantees and the plan of
distribution thereof and have previously advised the Agents of
all further information (financial and other) with respect to
the Company and the Guarantor to be set forth therein. Such
Registration Statement, in the form in which it was declared
effective, as amended through the date hereof, including all
documents incorporated or deemed to be incorporated by
reference therein, is hereinafter referred to as the
"Registration Statement". Such prospectus, as supplemented
through the date hereof, is hereinafter called the
"Prospectus", except that if any revised prospectus or
prospectus supplement shall be provided to the Agents by the
Company for use in connection with the offering of the
Securities which differs from the Prospectus (whether or not
such revised prospectus or prospectus supplement is required
to be filed by the Company pursuant to Rule 424(b) of the
Rules and Regulations), the term "Prospectus" shall refer to
such revised prospectus or prospectus supplement, as the case
may be, from and after the time it is first provided to the
Agents for such use. Any reference herein to the Registration
Statement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the date of this Agreement or the date of
the Prospectus, as the case may be; and any reference herein
to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement or the Prospectus shall be
deemed to refer to and include the filing of any document
under the Exchange Act after the date of this Agreement or the
date of the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
(b) As of the date hereof, when any amendment to the
Registration Statement becomes effective (including the filing
of any document incorporated by reference in the Registration
Statement), when any supplement to the Prospectus is filed
with the Commission, as of the date of any Terms Agreement (as
defined by Section 2 hereof) and at the date of delivery by
the Company of any Notes sold hereunder (a "Settlement Date"),
(i) the Registration Statement, as amended as of any such
time, and the Prospectus, as supplemented as of any such time,
and the Indenture complies, or will comply, as the case may
be, in all material respects with the applicable requirements
of the Act, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the Exchange Act and the
respective rules and regulations thereunder and (ii) neither
the Registration Statement, as amended as of any such time,
nor the Prospectus, as supplemented as of any such time,
contains, or will contain, as the case may be, any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein not misleading; provided, however,
that the representations or warranties in this subsection
shall not apply to (a) that part of the Registration Statement
which shall constitute the Statement of Eligibility on Form
T-1 under the Trust Indenture Act of the Trustee or (b) the
information contained in or omitted from the Registration
Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company or the
Guarantor by any of you specifically for use in connection
with the preparation of the Registration Statement and the
Prospectus or any amendment thereof or supplement thereto.
(c) Neither the Company nor the Guarantor nor any of
their respective subsidiaries is in violation of its corporate
charter or bylaws or in default under any agreement, indenture
or instrument to which the Company, the Guarantor or any of
their respective subsidiaries is a party, the effect of which
violation or default would be material to the Company or the
Guarantor and its subsidiaries considered as a whole; the
execution, delivery and performance of this Agreement and the
Indenture and consummation of the transactions contemplated
hereunder and thereunder will not conflict with, result in the
creation or imposition of any lien, charge or encumbrance upon
any of the assets of the Company, the Guarantor or any of
their respective subsidiaries pursuant to the terms of, or
constitute a default under, any agreement, indenture or
instrument, or result in a violation of the charter or by-laws
of the Company or the Guarantor or any order, rule or
regulation of any court or governmental agency having
jurisdiction over the Company, the Guarantor or any of their
respective subsidiaries; and except as required by the Act,
the Trust Indenture Act, the Exchange Act and applicable state
securities laws, no consent, authorization or order of, or
filing or registration with, any court or governmental agency
is required for the execution, delivery and performance of
this Agreement and the Indenture.
(d) Except as described in or contemplated by the
Registration Statement and the Prospectus, there has not been
any material adverse change in, or any adverse development
which materially affects, the business, properties, financial
condition or results of operations of the Company or the
Guarantor and its subsidiaries considered as a whole since the
dates as of which information is given in the Registration
Statement and the Prospectus.
(e) Grant Thornton LLP, whose reports have been
included in the Prospectus and incorporated by reference or
included in the Guarantor's most recent Annual Report on Form
10-K, which is incorporated by reference in the Prospectus,
are independent public accountants as required by the Act and
the Rules and Regulations.
(f) (i) The Indenture has been duly authorized,
executed and delivered by the Company and the Guarantor and
constitutes the legally binding obligation of the Company and
the Guarantor, respectively, enforceable in accordance with
its terms subject to bankruptcy, insolvency, reorganization,
fraudulent transfer, fraudulent conveyance, moratorium or
other laws affecting creditors' rights generally and general
principles of equity, (ii) on any Settlement Date, the Notes
will have been duly authorized and, upon payment therefor as
provided in this Agreement, will constitute legally binding
obligations of the Company enforceable in accordance with
their terms subject to bankruptcy, insolvency, reorganization,
fraudulent transfer, fraudulent conveyance, moratorium or
other laws affecting creditors' rights generally and general
principles of equity and the holders of the Notes will be
entitled to the benefits of the Indenture, (iii) on any
Settlement Date, the Guarantees will have been duly authorized
and, upon delivery of the related Notes, will constitute
legally binding obligations of the Guarantor enforceable in
accordance with their terms subject to bankruptcy, insolvency,
reorganization, fraudulent transfer, fraudulent conveyance,
moratorium or other laws affecting creditors' rights generally
and general principles of equity and the holders of the Notes
upon which the Guarantees are endorsed will be entitled to the
benefits of the Indenture, and (iv) the Indenture conforms,
and the Notes and related Guarantees will conform, in each
case in all material respects, to the descriptions thereof
contained in the Prospectus.
(g) Each of the Company, the Guarantor and any
Significant Subsidiary of the Company or the Guarantor, as
defined in Rule 405 of Regulation C of the Rules and
Regulations (individually, a "Subsidiary" and collectively,
the "Subsidiaries"), has been duly incorporated, is validly
existing and in good standing under the laws of the
jurisdiction in which it is chartered or organized, is duly
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership of
property or the conduct of its business requires such
qualification (except where the failure to be so qualified
would not have a material adverse effect on the business
operations or financial condition of the Company or the
Guarantor and its subsidiaries taken as a whole), and has
power and authority necessary to own or hold its property and
to conduct the business in which it is engaged.
(h) All of the outstanding shares of capital stock of
each Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and all
outstanding shares of capital stock of the Subsidiaries are
owned by the Company or the Guarantor, directly or through
subsidiaries, free and clear of any perfected security
interest, other security interests, claims, liens or
encumbrances.
(i) Except as described in the Prospectus, there is
no material litigation or governmental proceeding pending or,
to the knowledge of the Company or the Guarantor, threatened
against the Company, the Guarantor or any of their respective
subsidiaries which is reasonably likely to result in any
material adverse change in the financial condition, results of
operations, business or prospects of the Company or the
Guarantor and its subsidiaries considered as a whole or which
is required to be disclosed in the Registration Statement.
(j) The financial statements filed or incorporated as
part of the Registration Statement or included or incorporated
in the Prospectus present fairly, or (in the case of any
amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is
being made) will present fairly, at all times during the
effectiveness of this Agreement, the financial condition and
results of operations of the Guarantor, at the dates and for
the periods indicated, and have been, and (in the case of any
amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is
being made) will be at all times during the effectiveness of
this Agreement, prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout
the periods involved, except as otherwise required pursuant to
such generally accepted accounting principles; and the
summarized financial information of the Company included or
incorporated by reference in the Registration Statement and
the Prospectus presents fairly the information required to be
stated therein.
(k) The documents incorporated by reference into the
Prospectus have been, and (in the case of any amendment or
supplement to any such document, or any material incorporated
by reference in any such document, filed with the Commission
after the date as of which this representation is being made)
will be at all times during the effectiveness of this
Agreement, prepared in all material respects in conformity
with the applicable requirements of the Act and the Rules and
Regulations and the Exchange Act and the rules and regulations
of the Commission thereunder and such documents have been, or
(in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any
such document, filed with the Commission after the date as of
which this representation is being made) will be at all times
during the effectiveness of this Agreement hereof, timely
filed as required thereby.
(l) There are no contracts or other documents which
are required to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations, or which
were required to be filed as exhibits to any document
incorporated by reference in the Prospectus by the Exchange
Act or the rules and regulations of the Commission thereunder,
which have not been filed as exhibits to the Registration
Statement or to such document or incorporated therein by
reference as permitted by the Rules and Regulations or the
rules and regulations of the Commission under the Exchange Act
as required.
(m) The Company, the Guarantor and each subsidiary of
the Guarantor have complied, and will comply, with the
provisions of Florida H.B. 1771, codified as Section 517.075
of the Florida Statutes, 1987, as amended, and all regulations
promulgated thereunder relating to issuers doing business in
Cuba.
2. Appointment of Agents; Solicitations by the Agents of Offers to
Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and conditions
set forth herein, and to the reservation by the Company of the right to sell,
solicit, and accept offers to purchase Notes directly on its own behalf, the
Company hereby authorizes each Agent to act as its agent to solicit offers for
the purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable best efforts to solicit offers to purchase
the Notes from the Company upon the terms and conditions set forth herein and in
the Prospectus as amended or supplemented and in the Procedures.
The Company reserves the right, in its sole discretion, to instruct the
Agents or any one or more of the Agents from time to time to suspend at any
time, for any period of time or permanently, the solicitation of offers to
purchase the Notes. Upon receipt of instructions from the Company, such Agents
will forthwith suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised them that such solicitation may be
resumed.
Unless otherwise agreed between the Company and such Agent, the Company
agrees to pay each Agent a commission in U.S. dollars, at the time of settlement
of each sale of Notes by the Company as a result of a solicitation made by such
Agent, in an amount equal to that percentage specified in Schedule I hereto (or,
with respect to Notes in which the stated maturity is in excess of 30 years,
such percentage as shall be agreed upon by the Company and the related Agent at
such time) of the aggregate principal amount of the Notes sold by the Company as
a result of solicitations by such Agent and such commission shall be payable as
specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by each Agent as agent for the
Company at such time and in such amounts as such Agent deems advisable;
provided, however, that so long as this Agreement shall be in effect, the
Company shall not solicit offers to purchase Notes through any agents other than
the Agents.
Notwithstanding anything to the contrary contained herein, the Company
may authorize any other person or entity (an "Additional Agent") to act as its
agent to solicit offers for the purchase of all or part of the Notes of the
Company and/or accept offers to purchase Notes from any such Additional Agent,
provided that any such Additional Agent shall have entered into an agreement
with the Company upon the same terms and conditions as set forth in this
Agreement.
(b) Subject to the terms and conditions stated herein, the
Company agrees that, whenever the Company determines to sell Notes
directly to any Agent as principal for resale to others, it will enter
into a separate agreement relating to such sale in accordance with the
provisions of this Section 2(b). For the purposes of this Agreement,
the term "Purchaser" shall refer to each of you acting solely as
principal hereunder and not as agent. For the purposes of Section 3 and
Section 5 of this Agreement, the term "agent" shall refer to each of
you acting solely in the capacity as agent for the Company hereunder
and not as principal. The term "Agent" or "you" shall refer to each of
you acting in both such capacities or in either such capacity.
Each sale of Notes to a Purchaser shall be made in accordance
with the terms of this Agreement and the Procedures and a supplemental
agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, a Purchaser. Each such supplemental
agreement (which may be an oral agreement and confirmed in writing
between a Purchaser and the Company) is herein referred to as a "Terms
Agreement". Each such Terms Agreement, whether oral (and confirmed in
writing, which may be by facsimile transmission) or in writing, shall
be with respect to such information (as applicable) as is specified in
Exhibit B hereto. A Purchaser's commitment to purchase Notes shall be
deemed to have been made on the basis of the representations and
warranties of the Company and the Guarantor herein contained and shall
be subject to the terms and conditions herein set forth. Each Terms
Agreement shall describe the Notes to be purchased by the Purchaser
pursuant thereto, specify the principal amount of such Notes, the price
to be paid to the Company for such Notes, the currency or currency unit
in which such Notes shall be denominated and be payable, whether the
Notes will be issued in certificated or book-entry form, whether
interest shall be payable at a fixed or floating rate, the date and
time of delivery of payment for such Notes (the "Purchase Date"), the
place of delivery of the Notes and payment therefor, the method of
payment and any requirements for the delivery of the opinions of
counsel, the certificates from the Company, the Guarantor or their
officers, or the letter from Grant Thornton LLP pursuant to Section
6(b). Such Terms Agreement shall also specify the period of time, if
applicable, referred to in Section 4(l). In connection with the resale
of any Notes purchased by a Purchaser, such Purchaser may engage the
services of any other broker or dealer in connection with such resale
and may allow all or any portion of the discount received to such
brokers and dealers.
Delivery of the certificates for Notes sold to a Purchaser
pursuant to any Terms Agreement shall be made as agreed to between the
Company and the Purchaser as set forth in the respective Terms
Agreement, not later than the Purchase Date set forth in such Terms
Agreement, against payment of funds to the Company in the net amount
due to the Company for such Notes by the method and in the form set
forth in the respective Terms Agreement.
(c) So long as Countrywide Securities Corporation is an Agent
under the Selling Agency Agreement each Agent agrees that it will
comply with the applicable provisions of Conduct Rule 2720(l) of the
Conduct Rules of the National Association of Securities Dealers, Inc.
3. Offering Procedure. (a) Unless otherwise agreed between the Company
and each agent, each agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by such agent (unless such offer
is rejected by such agent in accordance herewith) on terms previously
communicated by the Company to such agent, and unless otherwise agreed between
the Company and each agent, the Company shall have the sole right to accept such
offers to purchase Notes and may refuse any proposed purchase of Notes in whole
or in part for any reason.
(b) Unless otherwise agreed between the Company and each
agent, each agent shall have the right, in its discretion reasonably
exercised, to reject any proposed purchase of Notes, as a whole or in
part, and any such rejection shall not be deemed a breach of its
agreement contained herein. Each agent and the Company agree to perform
the respective duties and obligations specifically provided to be
performed by them in the Procedures.
4. Agreements. The Company and the Guarantor, jointly and severally, agree with
each Agent that:
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(a) Prior to the termination of the offering of the
Notes, the Company and the Guarantor will not file any
amendment of the Registration Statement or supplement to the
Prospectus (except for a supplement relating to an offering of
securities other than the Notes and related Guarantees) unless
the Company or the Guarantor has furnished to such Agent a
copy for its review prior to filing and will not file any such
proposed amendment or supplement to which such Agent may
reasonably object. Subject to the foregoing sentence, the
Company and the Guarantor will cause each supplement to the
Prospectus to be filed (or mailed for filing) with the
Commission as required pursuant to Rule 424. The Company and
the Guarantor will promptly advise such Agent (i) when each
supplement to the Prospectus shall have been filed (or mailed
for filing) with the Commission pursuant to Rule 424, (ii)
when any amendment of the Registration Statement shall have
become effective, (iii) of any request by the Commission for
any amendment of the Registration Statement or amendment of or
supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company or the
Guarantor of any notification with respect to the suspension
of the qualification of the Notes and related Guarantees for
sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company and the Guarantor
will use their best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible
the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Notes and related Guarantees is required to be delivered under
the Act, any event occurs as a result of which the
Registration Statement, as then amended, or the Prospectus, as
then supplemented, would include any untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, any facts or
events arise which, individually or in the aggregate, would
represent a fundamental change in the information set forth in
the Registration Statement or the Prospectus, or if it shall
be necessary to amend the Registration Statement or to
supplement the Prospectus to comply with the Act or the
Exchange Act or the respective rules and regulations
thereunder, the Company and the Guarantor promptly will (i)
notify such Agent to suspend the solicitation of offers to
purchase Notes (and, if so notified, such Agent shall
forthwith suspend such solicitation and cease using the
Prospectus as then amended or supplemented), (ii) prepare and
file with the Commission, subject to the first sentence of
paragraph (a) of this Section 4, an amendment or supplement
which will correct such statement or omission or an amendment
or supplement which will effect such compliance and (iii) will
supply any such amended or supplemented Prospectus to such
Agent in such quantities as such Agent may reasonably request.
If such amendment or supplement, and any documents,
certificates and opinions furnished to such Agent pursuant to
paragraph (f) of this Section 4 in connection with the
preparation or filing of such amendment or supplement are
reasonably satisfactory in all respects to such Agent, such
Agent will, upon the filing of such amendment or supplement
with the Commission and upon the effectiveness of an amendment
to the Registration Statement if such an amendment is
required, resume such Agent's obligation to solicit offers to
purchase Notes hereunder.
(c) As soon as practicable, the Guarantor will make
generally available to the security holders of the Guarantor
and to such Agent an earnings statement which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company and the Guarantor will furnish to
such Agent and to its counsel, without charge, copies of the
Registration Statement (including exhibits thereto) and each
amendment thereto which shall become effective and, so long as
delivery of a prospectus may be required by the Act, as many
copies of any preliminary prospectus and the Prospectus and
any amendments thereof and supplements thereto as such Agent
may reasonably request.
(e) The Company and the Guarantor will arrange for
the qualification of the Notes and related Guarantees for sale
under the laws of such jurisdictions as such Agent may
designate, will maintain such qualifications in effect so long
as required for the distribution of the Notes and related
Guarantees, and will arrange for the determination of the
legality of the Notes and related Guarantees for purchase by
institutional investors.
(f) The Company and the Guarantor shall furnish to
such Agent and counsel for such Agent, such documents,
certificates of officers and opinions of counsel relating to
their respective businesses, operations and affairs, the
Registration Statement, any preliminary prospectus, the
Prospectus, and any amendments or supplements thereto, the
Indenture, the Notes, the Guarantees, this Agreement, the
Procedures and the performance by the Company and the
Guarantor of their respective obligations hereunder and
thereunder as such Agent may from time to time and at any time
prior to the termination of this Agreement reasonably request.
(g) The Company and the Guarantor shall, whether or
not any sale of the Notes is consummated, (i) pay all expenses
incident to the performance of their obligations under this
Agreement, including the fees and disbursements of its
accountants and counsel, the cost of printing (or otherwise
producing) and delivery of the Registration Statement, the
Prospectus, all amendments thereof and supplements thereto,
the Indenture, this Agreement and all other documents relating
to the offering, the cost of preparing, printing, packaging
and delivering the Notes and related Guarantees, the fees and
disbursements, including fees of counsel, incurred in
connection with the qualification of the Notes and related
Guarantees for sale and determination of eligibility for
investment of the Notes and related Guarantees under the
securities or blue sky laws of each such jurisdiction as such
Agent may reasonably designate, the fees and disbursements of
the Trustee, the Calculation Agent (as such term is used in
the Prospectus, as supplemented, relating to the Notes and
related Guarantees) and the fees of any agency that rates the
Notes, and (ii) reimburse such Agent on a monthly basis for
all out-of-pocket expenses (including without limitation
advertising expenses) incurred by such Agent and approved by
the Company or the Guarantor in advance, in connection with
the offering and the sale of the Notes and related Guarantees,
and (iii) be responsible for the reasonable fees and
disbursements of such Agent's counsel incurred heretofore or
hereafter in connection with the offering and sale of the
Notes and related Guarantees.
(h) Each acceptance by the Company of an offer to
purchase Notes and each delivery of Notes by the Company will
be deemed to be a reconfirmation to you, as of the date of
such acceptance or delivery, of the representations and
warranties of the Company and the Guarantor in Section 1(b).
(i) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an
amendment or supplement (i) relating to an offering of
securities other than the Notes and related Guarantees or (ii)
providing solely for the specification of the terms of the
Notes (excluding (a) any change in the formula by which
interest rates on the Notes may be determined and (b) any
information relating to Specified Currencies other than U.S.
dollars)) or there is filed with the Commission any document
incorporated by reference into the Prospectus, the Company and
the Guarantor will each deliver or cause to be delivered
forthwith to such Agent a certificate of its President,
Managing Director or any Vice President and its principal
financial or accounting officer or the Treasurer, dated the
date of the effectiveness of such amendment or the date of
filing of such supplement, in form reasonably satisfactory to
such Agent, to the effect that the statements contained in the
certificate that was last furnished to such Agent pursuant to
either Section 5(e) or this Section 4(i) are true and correct
at the time of the effectiveness of such amendment or the
filing of such supplement as though made at and as of such
time (except that (i) the last day of the fiscal quarter for
which financial statements of the Guarantor were last filed
with the Commission shall be substituted for the corresponding
date in such certificate and (ii) such statements shall be
deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such
supplement) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in Section 5(e),
but modified to relate to the last day of the fiscal quarter
for which financial statements of the Guarantor were last
filed with the Commission and to the Registration Statement
and the Prospectus as amended and supplemented to the time of
the effectiveness of such amendment or the filing of such
supplement.
(j) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an
amendment or supplement (i) relating to an offering of
securities other than the Notes and related Guarantees, (ii)
providing solely for the specification of the terms of the
Notes (excluding (a) any change in the formula by which
interest rates on the Notes may be determined and (b) any
information relating to Specified Currencies other than U.S.
dollars) or (iii) setting forth or incorporating by reference
financial statements or other financial information as of and
for a fiscal quarter, unless, in the case of clause (iii)
above, in such Agent's reasonable judgment, such financial
statements or other financial information are of such a nature
that an opinion of counsel should be furnished) or there is
filed with the Commission any document incorporated by
reference into the Prospectus, the Company and the Guarantor
shall furnish or cause to be furnished forthwith to such Agent
the written opinion of the General Counsel of the Company and
the Guarantor, or such other counsel satisfactory to such
Agent, dated the date of the effectiveness of such amendment
or the date of filing of such supplement, in form satisfactory
to such Agent, covering all of the matters referred to in the
opinions set forth in Sections 5(b) and 5(c) but modified to
relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of the effectiveness of
such amendment or the filing of such supplement or, in lieu of
such opinion, counsel last furnishing such an opinion to such
Agent may furnish a letter to the effect that such Agent may
rely on such last opinion to the same extent as though it were
dated the date of such letter authorizing reliance (except
that statements in such last opinion will be deemed to relate
to the Registration Statement and the Prospectus as amended
and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement); provided,
however, that, upon a reasonable request from such Agent, the
Company and the Guarantor shall cause to be furnished
forthwith to such Agent the written opinion of Munger, Tolles
& Olson LLP, counsel to the Company and the Guarantor, dated
the date of the effectiveness of such amendment or the date of
filing of such supplement, in form satisfactory to such Agent,
of the same tenor as the opinions referred to in Section 5(b)
but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such
supplement.
(k) Each time that the Registration Statement or the
Prospectus is amended or supplemented to set forth amended or
supplemental financial information or such amended or
supplemental information is incorporated by reference in the
Registration Statement or the Prospectus, the Company and the
Guarantor shall cause Grant Thornton LLP, their independent
public accountants, forthwith to furnish to such Agent a
letter, dated the date of the effectiveness of such amendment
or the date of filing of such supplement, in form satisfactory
to such Agent, of the same tenor as the letter referred to in
Section 5(f) with such changes as may be necessary to reflect
the amended and supplemental financial information included or
incorporated by reference in the Registration Statement and
the Prospectus, as amended or supplemented to the date of such
letter, provided that if the Registration Statement or the
Prospectus is amended or supplemented solely to include or
incorporate by reference financial information as of and for a
fiscal quarter, Grant Thornton LLP may limit the scope of such
letter, which shall be satisfactory in form to such Agent, to
the unaudited financial statements included in such amendment
or supplement, unless any other information included or
incorporated by reference therein of an accounting, financial
or statistical nature is of such a nature that, in such
Agent's reasonable judgment, such letter should cover such
other information.
(l) During the period, if any, specified in any Terms
Agreement, the Company and the Guarantor shall not, without
the prior consent of the Purchaser, issue or announce the
proposed issuance of any debt securities of the Company or the
Guarantor in a public offering or register any debt securities
of the Company or the Guarantor under the Act in connection
with any secondary distribution of such debt securities.
5. Conditions to the Obligations of the Agents. The obligations of any
agent to solicit offers to purchase the Notes shall be subject to the accuracy
of the representations and warranties on the part of the Company and the
Guarantor contained herein as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement (including the
filing of any document incorporated by reference therein), as of the date of any
supplement to the Prospectus and as of each Settlement Date, to the accuracy of
the statements of the Company and the Guarantor made in any certificates
pursuant to the provisions hereof, to the performance by the Company and the
Guarantor of their respective obligations hereunder and to the following
additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall
have been issued, and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Company and the Guarantor shall have
furnished to the agents the opinion or opinions of Munger,
Tolles & Olson LLP, counsel to the Company and the Guarantor,
dated the date hereof, substantially as set forth below, with
such additional qualifications and exceptions as shall be
acceptable to the agents and their counsel:
(i) Each of the Company and the Guarantor is
a corporation duly incorporated, validly existing and
in good standing under the laws of the state of its
incorporation and has the corporate power and
authority to own its properties and to conduct its
business as described in the Prospectus.
(ii) The Company and the Guarantor have the
corporate power and authority to enter into this
Agreement and the Terms Agreement (if applicable),
and this Agreement and the Terms Agreement (if
applicable) have been duly and validly authorized,
executed and delivered by the Company and the
Guarantor, respectively.
(iii) The form and general terms of the
Notes have been duly and validly authorized and
established in conformity with the provisions of the
Indenture by all necessary corporate action by the
Company, and when the particular terms of the Notes
have been duly established in accordance with the
provisions of the Indenture, the Procedures and the
resolutions of the Board of Directors of the Company
and such Notes have been duly executed, authenticated
and delivered against payment therefor in accordance
with the provisions of the Indenture, the Procedures
and this Agreement, will constitute the legal, valid
and binding obligations of the Company, enforceable
against the Company in accordance with their terms
and the terms of the Indenture, and the holders of
the Notes will be entitled to the benefits of the
Indenture; and the Indenture has been duly
authorized, executed and delivered by each of the
Company and Guarantor, has been qualified under the
Trust Indenture Act, and constitutes a legal, valid
and binding obligation enforceable against each of
the Company and the Guarantor in accordance with its
terms.
(iv) The Guarantees, in the forms certified
to by an authorized officer of the Guarantor, have
been duly and validly authorized by all necessary
corporate action by the Guarantor and, upon due
issuance, authentication and delivery of the related
Notes and due endorsement of the Guarantees, the
Guarantees will have been duly executed, issued and
delivered and will constitute the legal, valid and
binding obligations of the Guarantor enforceable
against the Guarantor in accordance with their terms
and the terms of the Indenture, and the holders of
the Notes upon which the Guarantees are endorsed will
be entitled to the benefits of the Indenture.
(v) The Registration Statement has become
effective under the Act; any required filing of the
Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have
been instituted or threatened and the Registration
Statement and the Prospectus (other than (i) the
financial statements and other financial and
statistical information contained therein and (ii)
the Statement of Eligibility on Form T-1 filed as an
exhibit thereto, as to which such counsel need
express no opinion), as of their respective effective
or issue dates, as the case may be, appear on their
face to be responsive as to form in all material
respects with the applicable requirements of the Act
and the Rules and Regulations and the Trust Indenture
Act and the rules and regulations of the Commission
thereunder.
(vi) No consent, approval, authorization or
order of any United States federal or New York,
California or (with respect to matters arising under
the Delaware General Corporation Law) Delaware court
or governmental agency or body is required for the
consummation of the transactions contemplated by this
Agreement or the Indenture, except such as have been
obtained under the Act and such as may be required
under the securities and blue sky laws, rules or
regulations of any jurisdiction in connection with
the purchase and distribution of the Notes and
related Guarantees by the agents and such other
approvals as have been obtained.
(vii) Neither the issue and sale of the
Notes (in the forms certified to by an authorized
officer of the Company), the compliance by the
Company and the Guarantor with all the provisions of
this Agreement, the Indenture, the Notes or the
Guarantees (in the form certified to by an authorized
officer of the Guarantor), the consummation of the
transactions herein or therein contemplated nor the
fulfillment of the terms hereof or thereof will
conflict with, result in a breach of, or constitute a
default under the charter or bylaws of the Company or
the Guarantor or the terms of any indenture or other
agreement or instrument filed with the Commission and
to which the Company or the Guarantor or any of the
Guarantor's subsidiaries is a party or bound, or any
order, decree, judgment or regulation (other than any
federal or state securities or blue sky laws, rules
or regulations) known to such counsel to be
applicable to the Company or the Guarantor or any of
the Guarantor's subsidiaries of any court, regulatory
body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or
the Guarantor or any of the Guarantor's subsidiaries.
(viii) To the best knowledge of such
counsel, no holders of securities of the Company or
the Guarantor have rights to the registration of such
securities under the Registration Statement.
(ix) Such counsel confirms (i) that the
statements in the Prospectus under the caption
"Federal Income Tax Consequences", insofar as such
statements constitute a summary of the legal matters
referred to therein, fairly present the information
disclosed therein in all material respects, (ii) the
conformity in all material respects of the Notes (in
the forms certified to by an authorized officer of
the Company) to the statements relating thereto in
the Prospectus, and (iii) the conformity in all
material respects of the Indenture and the Guarantees
to the statements relating thereto in the Prospectus
under the captions "Description of Notes" and
"Description of Debt Securities of Countrywide Home
Loans and Related Guarantees of Countrywide Credit
Industries."
Such counsel shall also state that, in the course of their
engagement to represent or advise the Company and the Guarantor
professionally, they have not become aware of any pending legal
proceeding before any court or administrative agency or authority or
any arbitration tribunal, nor have they devoted substantive attention
in the form of legal representation as to any current overtly
threatened litigation against or directly affecting the Company or its
subsidiaries or the Guarantor or its subsidiaries, in each case that is
required to be described in the Registration Statement or the
Prospectus and is not so described. In making the foregoing statement,
they shall endeavor, to the extent they believe necessary, to determine
from lawyers currently in their firm who have performed substantive
legal services for the Company or the Guarantor, whether such services
involved substantive attention in the form of legal representation
concerning pending legal proceedings or overtly threatened litigation
of the nature referred to above. Beyond that, they need not make any
review, search or investigation of public files or records or files or
records of the Company or the Guarantor, or of their respective
transactions, or any other investigation or inquiry with respect to the
foregoing statement.
Such counsel shall also state that in the course of the
preparation by the Company, the Guarantor and their counsel of the
Registration Statement and Prospectus (other than the Incorporated
Documents (as defined below)), such counsel attended conferences with
certain of the officers of, and the independent public accountants for,
the Company and the Guarantor, at which the Registration Statement and
Prospectus were discussed. Given the limitations inherent in the
independent verification of factual matters and the character of
determinations involved in the registration process, such counsel need
not pass upon and need not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement and Prospectus including the Incorporated
Documents, except as specifically described in the opinion set forth in
paragraph (ix) above. Subject to the foregoing and on the basis of the
information such counsel gained in the performance of the services
referred to above, including information obtained from officers and
other representatives of the Company and Guarantor, such counsel shall
state that no facts have come to such counsel's attention that have
caused it to believe that the Registration Statement, at the time it
became effective, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus, at its date or at the date hereof, included or includes, as
the case may be, any untrue statement of material fact or omitted or
omits, as the case may be, to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, except that such counsel need not
express a view or belief with respect to (i) the financial statements,
the related notes and schedules thereto or other financial and
statistical data included or incorporated by reference in the
Registration Statement and Prospectus or (ii) any part of the
Registration Statement which shall constitute a Statement of
Eligibility on Form T-1 under the Trust Indenture Act. References to
the Prospectus in this Section 5(b) include any amendments or
supplements thereto at the date hereof.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of California, the State of Delaware (but only with
respect to the Delaware General Corporation Law) or the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the agents, (B) as the
matters involving the application of laws of the State of New York, to
the extent specified in such opinion, upon the opinion of Brown & Wood
LLP being delivered to the agents as of the date thereof and (C) as to
matters of fact, to the extent they deem proper, on certificates and
oral or written statements and other information of or from public
officials and officers and representatives of the Company, the
Guarantor, their respective subsidiaries and others.
In rendering the opinions set forth in paragraphs (iii) and
(iv), such counsel may state that such opinions are subject to the
following: (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, fraudulent conveyance, moratorium or other laws now or
hereafter in effect affecting creditors' rights generally; and (ii)
general principles of equity (including, without limitation, standards
of materiality, good faith, fair dealing and reasonableness) whether
such principles are considered in a proceeding in equity or at law.
In rendering the opinions set forth above, such counsel need
not express an opinion as to the legality, validity, binding effect or
enforceability of any provision of the Notes, the Indenture or the
Guarantees providing for payments thereunder in a currency other than
currency of the United States of America to the extent that a court of
competent jurisdiction will under applicable law convert any judgment
rendered in such other currency into currency of the United States of
America or to the extent that payment in a currency other than currency
of the United States of America is contrary to applicable law.
In rendering the opinions set forth above, such counsel may
state that it has assumed, with the permission of the agents, that the
amount of Notes to be issued from time to time will not violate any
provision in any such agreement referred to in paragraph (vii) which
imposes limits on the amount of debt of the Company, the Guarantor or
any of the Guarantor's subsidiaries which may be outstanding at any one
time (whether directly or indirectly, through satisfaction of financial
ratios or otherwise).
(c) The Company and the Guarantor shall have furnished to the
agents the opinion or opinions of Sandor E. Samuels, General Counsel of
the Company and the Guarantor, dated the date hereof, substantially as
set forth below, with such additional qualifications and exceptions as
shall be acceptable to the agents and their counsel:
(i) Each Subsidiary, if any, is a corporation, duly
incorporated, validly existing and in good standing under the
laws of the state of its incorporation, with the corporate
power and authority to own its properties and to conduct its
business as described in the Prospectus.
(ii) Each of the Company, the Guarantor and the
Subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business
other than jurisdictions in which the failure to so qualify,
when considered in the aggregate and not individually, would
not have a material adverse effect on the Company or the
Guarantor and its Subsidiaries considered as one enterprise.
(iii) All the outstanding shares of capital stock of
the Company and each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Company and the
Subsidiaries are owned by the Guarantor either directly or
through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests,
claims, liens or encumbrances.
(iv) The outstanding shares of common stock of the
Guarantor have been duly and validly authorized and issued and
are fully paid and nonassessable.
(v) Neither the issue and sale of the Notes, the
compliance by the Company and the Guarantor with all the
provisions of this Agreement, the Indenture, the Notes or the
Guarantees, the consummation of any other of the transactions
herein or therein contemplated nor the fulfillment of the
terms hereof or thereof will conflict with, result in a breach
of, or constitute a default under the charter or by-laws of
the Company or the Guarantor or, to the knowledge of such
counsel, the terms of any indenture or other agreement or
instrument to which the Company or the Guarantor or any of the
Guarantor's subsidiaries is a party or bound, or any order,
decree, law, judgment, rule or regulation known to such
counsel to be applicable to the Company or the Guarantor or
any of the Guarantor's subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator
having jurisdiction over the Company or the Guarantor or any
of the Guarantor's subsidiaries.
(vi) The documents (the "Incorporated Documents")
incorporated by reference in the Registration Statement and
Prospectus (except for the financial statements and other
financial or statistical data, as to which no opinion need be
expressed), as of the dates they were filed with the
Commission, complied as to form in all material respects to
the requirements of the Act and the Rules and Regulations and
the Exchange Act and the rules and regulations of the
Commission thereunder.
(vii) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated by this
Agreement or the Indenture, except such as have been obtained
under the Act and such as may be required under the securities
and blue sky laws, rules and regulations of any jurisdiction
in connection with the purchase and distribution of the Notes
and related Guarantees by the agents and such other approvals
as have been obtained.
In rendering the opinions set forth above, such counsel may
state that it has assumed, with the permission of the agents, that the
amount of Notes to be issued from time to time will not violate any
provision in any such agreement referred to in paragraph (v) which
imposes limits on the amount of debt of the Company, the Guarantor or
any of the Guarantor's subsidiaries which may be outstanding at any one
time (whether directly or indirectly, through satisfaction of financial
ratios or otherwise).
(d) Such agent shall have received from Brown & Wood LLP,
counsel for the agents, such opinion or opinions, dated the date
hereof, with respect to the issuance and sale of the Notes and related
Guarantees, this Agreement, the Indenture, the Registration Statement,
the Prospectus and other related matters as such agent may reasonably
require, and the Company and the Guarantor shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(e) The Company and the Guarantor shall have each furnished to
such agent a certificate of its President, a Managing Director or a
Vice President and its Treasurer or an Assistant Treasurer, dated the
date hereof, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company
or the Guarantor, as the case may be, in this Agreement are
true and correct in all material respects on and as of the
date hereof with the same effect as if made on the date
hereof, and the Company or the Guarantor, as the case may be,
has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied as a
condition to the obligation of such agent to solicit offers to
purchase the Notes;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the knowledge of
the Company or the Guarantor, as the case may be, threatened;
and
(iii) since the date of the most recent financial
statements included or incorporated in the Prospectus, there
has been no material adverse change in the condition
(financial or otherwise), earnings, business or properties of
the Company or the Guarantor and its subsidiaries considered
as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus.
(f) On the date hereof, Grant Thornton LLP shall have
furnished to such agent a letter or letters (which may refer to letters
previously delivered to such agent), dated as of the date hereof, in
form and substance satisfactory to such agent, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited consolidated
financial statements and financial statement schedules
included or incorporated in the Registration Statement and the
Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest
unaudited consolidated financial statements made available to
them; carrying out certain specified procedures (which shall
include, without limitation, the procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information as described in SAS
No. 71, Interim Financial Information, with respect to such
unaudited consolidated financial statements included or
incorporated by reference in the Registration Statement or the
Prospectus); a reading of the minutes of the meetings of the
stockholders, directors and standing committees thereof; and
inquiries of certain officials who have responsibility for
financial and accounting matters as to transactions and events
subsequent to the date of the most recent audited financial
statements included or incorporated in the Prospectus, nothing
came to their attention which caused them to believe that:
(1) any unaudited financial
statements included or incorporated in the
Registration Statement and the Prospectus do
not comply as to form in all material
respects with applicable accounting
requirements of the Exchange Act as they
apply to quarterly reports on Form 10-Q or
that any material modifications should be
made to said unaudited financial statements
for them to be in conformity with generally
accepted accounting principles;
(2) with respect to the period
subsequent to the date of the most recent
financial statements (other than any capsule
information), audited or unaudited, in or
incorporated in the Registration Statement
and the Prospectus, there was any change, at
a specified date not more than three
business days prior to the date of the
letter, in the capital stock or long and
intermediate term debt of the Company or the
Guarantor and its subsidiaries taken as a
whole or any decreases in the shareholders'
equity or consolidated net assets as
compared with the amounts shown on the most
recent consolidated balance sheet included
or incorporated in the Registration
Statement and the Prospectus, or for the
period from the date of the most recent
financial statements included or
incorporated in the Registration Statement
and the Prospectus to such specified date
there were any decreases, as compared with
the corresponding period in the preceding
year in consolidated revenues (net of
interest charges), earnings before income
taxes or net earnings of the Company or the
Guarantor and its subsidiaries, except in
all instances for changes or decreases set
forth in such letter; or
(3) the amounts included in any
unaudited "capsule" information included or
incorporated in the Registration Statement
and the Prospectus do not agree with the
amounts set forth in the unaudited financial
statements for the same periods or were not
determined on a basis substantially
consistent with that of the corresponding
amounts in the audited financial statements
included or incorporated in the Registration
Statement and the Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
set forth in the Registration Statement and the Prospectus and
in Exhibit 12 to the Registration Statement, the information
included or incorporated in Items 1, 2, 6, 7 and 11 of the
Guarantor's Annual Report on Form 10-K (and, if filed, the
Company's Annual Report on Form 10-K), incorporated in the
Registration Statement and the Prospectus and the information
included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated in the Company's or the Guarantor's Quarterly
Reports on Form 10-Q incorporated in the Registration
Statement and the Prospectus, agrees with the accounting
records of the Company, the Guarantor and their respective
subsidiaries, excluding any questions of legal interpretation;
and
(iv) if pro forma financial statements are included
or incorporated in the Registration Statement and the
Prospectus, on the basis of a reading of the unaudited pro
forma financial statements, carrying out certain specified
procedures, inquiries of certain officials of the Company or
the Guarantor, as the case may be, who have responsibility for
financial and accounting matters, and proving the arithmetic
accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma financial statements,
nothing came to their attention which caused them to believe
that the pro forma financial statements do not comply in form
in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
References to the Registration Statement and the Prospectus in
this paragraph (f) are to such documents as amended and supplemented at
the date of the letter.
(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (as amended
or supplemented, in the case of a Terms Agreement, but exclusive of any
amendment or supplement subsequent to the date of execution of such
Terms Agreement) there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (f) of this
Section 5 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company, the Guarantor and their respective subsidiaries the effect of
which, in any case referred to in clause (i) or (ii) above, is, in the
judgment of such Agent, so material and adverse as to make it
impractical or inadvisable to proceed with the soliciting of offers to
purchase the Notes as contemplated by the Registration Statement and
the Prospectus (or, in the case of a Terms Agreement, to proceed with
the offering or the delivery of the Notes to be purchased as
contemplated by the Terms Agreement).
(h) Prior to the date hereof, the Company and the Guarantor
shall have furnished to such agent such further information,
certificates and documents as such agent may reasonably request.
(i) Prior to the date hereof, the Notes shall have been rated, and on the date
hereof the Notes shall be rated, at least BBB- by Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc. ("S&P") and Baa3 by
Moody's Investors Service, Inc. ("Moody's").
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such agent and its counsel, this Agreement and all obligations
of such agent hereunder may be canceled at any time by such agent. Notice of
such cancellation shall be given to the Company and the Guarantor in writing or
by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered to the offices of Brown & Wood LLP, One World Trade Center, New York,
New York 10048, or such other location as shall be mutually agreed upon, on the
date hereof.
6. Conditions to the Obligations of a Purchaser. The obligations of a
Purchaser to purchase Notes pursuant to any Terms Agreement will be subject to
the accuracy of the representations and warranties on the part of the Company
and the Guarantor herein as of the date of the respective Terms Agreement and as
of the Purchase Date thereunder, to the performance and observance by the
Company and the Guarantor of all covenants and agreements herein contained on
its part to be performed and observed and to the following additional conditions
precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) Except to the extent modified by the respective Terms
Agreement, the Purchaser shall have received, appropriately updated in
a manner consistent with Section 5 hereof, (i) certificates of the
Company and the Guarantor, dated as of the Purchase Date, to the effect
set forth in Section 5(e), (ii) the opinion or opinions of Munger,
Tolles & Olson LLP, counsel to the Company and the Guarantor, dated as
of the Purchase Date, to the effect set forth in Section 5(b), as
modified such that such counsel shall state that no facts have come to
such counsel's attention that have caused it to believe that the
Registration Statement, at the time it became effective and, if
subsequently filed, as of the date of the Guarantor's Annual Report on
Form 10-K (and, if filed, the Company's Annual Report on Form 10-K),
contained an untrue statement of material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the opinion or opinions of
Sandor E. Samuels, General Counsel to the Company and the Guarantor,
dated as of the Purchase Date, to the effect set forth in Section 5(c),
as modified such that such counsel shall state that no facts have come
to such counsel's attention that have caused it to believe that the
Registration Statement, at the time it became effective and, if
subsequently filed, as of the date of the Guarantor's Annual Report on
Form 10-K (and, if filed, the Company's Annual Report on Form 10-K),
contained an untrue statement of material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iv) the opinion or opinions of
Brown & Wood llp, counsel for the Purchaser, dated as of the Purchase
Date, to the effect set forth in Section 5(d), (v) letter of Grant
Thornton LLP, dated as of the Purchase Date, to the effect set forth in
Section 5(f), and (vi) bringdown letter of Grant Thornton LLP, dated as
of the related Settlement Date.
(c) The conditions set forth in Section 5(g) shall have been satisfied.
(d) Prior to the Purchase Date, the Company and the Guarantor
shall have furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably request.
(e) Prior to and at the Purchase Date, the Notes shall have
been rated at least BBB- by S&P and Baa3 by Moody's.
(f) Subsequent to the execution of any Terms Agreement and
prior to the Purchase Date pursuant to such Terms Agreement, the rating
assigned by S&P or Moody's to any debt securities of the Company or the
Guarantor has not been lowered and neither S&P nor Moody's has publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any debt securities of the Company
or the Guarantor.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and its counsel, this Agreement and all
obligations of the Purchaser hereunder may be canceled at, or at any time prior
to, the respective Purchase Date by the Purchaser. Notice of such cancellation
shall be given to the Company or the Guarantor in writing or by telephone or
telegraph confirmed in writing.
7. Reimbursement of the Agent's Expenses. If any condition to the
obligations of any Agent set forth in Section 5 hereof is not satisfied, if any
condition to the obligations of a Purchaser set forth in Section 6 hereof is not
satisfied, if any termination pursuant to Section 9 hereof shall occur or in the
case of any refusal, inability or failure on the part of the Company or the
Guarantor to perform any agreement herein or comply with any provision hereof
other than by reason of a default by an Agent, the Company and the Guarantor
will reimburse such Agent upon demand for all expenses that shall have been
incurred by such Agent pursuant to Section 4(g) hereof in connection with this
Agreement.
8. Indemnification and Contribution. (a) The Company and the Guarantor,
jointly and severally, agree to indemnify and hold harmless each Agent and each
person who controls such Agent within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which such Agent or any of them may become subject under the Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Notes as originally filed or
in any amendment thereof, or in the Prospectus or any preliminary Prospectus, or
in any amendment thereof 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 agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that (i) the Company and the Guarantor will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company or the Guarantor by or on
behalf of such Agent specifically for use in connection with the preparation
thereof, and (ii) such indemnity with respect to any preliminary Prospectus or
any Prospectus as supplemented or amended shall not inure to the benefit of any
Agent (or any person controlling such Agent) from whom the person asserting any
such loss, claim, damage or liability purchased the Notes which are the subject
thereof if such Agent (or any person controlling such Agent) received a copy of
such Prospectus (or such Prospectus as so amended or supplemented) and such
person did not receive a copy of the Prospectus (or the Prospectus as amended or
supplemented) excluding documents incorporated therein by reference at or prior
to the confirmation of the sale of such Notes to such person in any case where
such delivery is required by the Act and the untrue statement or omission or the
alleged untrue statement or omission was corrected in the Prospectus (or the
Prospectus as amended or supplemented). This indemnity agreement will be in
addition to any liability which the Company or the Guarantor may otherwise have.
(b) Each Agent agrees to indemnify and hold harmless the Company and
the Guarantor, their respective directors, each of their officers who sign the
Registration Statement, and each person who controls the Company or the
Guarantor within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company and the Guarantor to such
Agent, but only with reference to written information relating to such Agent
furnished to the Company or the Guarantor by or on behalf of such Agent
specifically for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which such Agent may otherwise have. The Company and the Guarantor
acknowledge that the statements set forth in the last sentence of paragraph five
and paragraphs six, seven, eight and ten under the heading "Plan of Distribution
of Notes," insofar as it relates to such Agent, in the Prospectus constitute the
only information furnished in writing by or on behalf of such Agent for
inclusion in the documents referred to in the foregoing indemnity, and you
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
hereunder, except and to the extent of any prejudice to such indemnifying party
arising from such failure to provide notice, and will not, in any event, relieve
the indemnifying party from any liability which it may have to any indemnified
party other than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Agents in the case of paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) If the indemnification provided for in this Section 8 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 to such
indemnified party as a result of such losses, claims, damages, or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Guarantor on the one hand
and each Agent on the other from the offering of the Notes 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 and the Guarantor 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 and the Guarantor 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 such
offering (before deducting expenses) received by the Company bear to the total
commissions received by each Agent. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Guarantor on the one hand
or 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, the Guarantor and each Agent agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Agents were treated as one entity for such purpose)
or by any other method of allocation which does not take 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), no Agent shall be required to contribute any amount in excess of
the amount of commission or discount received by it in connection with the
offering of the Notes that were the subject of the claim for indemnification. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Agents in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Notes and not joint.
9. Termination. This Agreement will continue in effect until terminated as
provided in this
-----------
Section 9.
(a) This Agreement may be terminated by either the Company or
any Agent giving written notice of such termination to the other party
hereto. This Agreement shall so terminate at the close of business on
the first business day following the receipt of such notice by the
party to whom such notice is given. This Agreement may be terminated as
to one or more of the Agents, and to the extent not terminated with
respect to any Agent, this Agreement shall remain in full force and
effect as between the Company and any such Agent. In the event of such
termination, no party shall have any liability to the other party
hereto, except as provided in the fourth paragraph of Section 2(a),
Section 4(g), Section 7, Section 8 and Section 10 and except that if
terminated between the date of acceptance of an offer and the
Settlement Date or Purchase Date, Section 4, Section 5 and Section 6
shall also survive with respect to such sale.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Purchaser, by notice given to the
Company and the Guarantor prior to delivery of and payment for Notes to
be purchased thereunder, if prior to such time (i) trading in
securities generally, or in the securities of the Guarantor, on the New
York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a banking
moratorium shall have been declared by either federal or New York State
authorities or, in the case of Notes denominated in other than U.S.
dollars, by the authorities of the country of the currency in which
such Notes are so denominated or (iii) there shall have occurred any
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States or in the country or countries of origin of any foreign currency
or currency unit in which the Notes are denominated, indexed or payable
is such as to make it, in the judgment of the Purchaser, impracticable
to market such Notes.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantor or any of their officers and of each Agent set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of such Agent or the
Company, the Guarantor or any of their officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Notes. The provisions of Sections 7 and 8 hereof shall survive
the termination or cancellation of this Agreement.
11. Right of Person Who Agreed to Purchase to Refuse to Purchase. The
Company and the Guarantor agree that any person who has agreed to purchase and
pay for any Note, including a Purchaser and any person who purchases pursuant to
a solicitation by any of the Agents, shall have the right to refuse to purchase
such Note if, at the Settlement Date therefor, either (a) any condition set
forth in Section 5 or 6, as applicable, shall not be satisfied or (b) subsequent
to the agreement to purchase such Note, any change, or any development involving
a prospective change, in or affecting the business or properties of the Company
or the Guarantor and its subsidiaries shall have occurred the effect of which
is, in the reasonable judgment of the Purchaser or the Agent which presented the
offer to purchase such Note, as applicable, so material and adverse as to make
it impractical or inadvisable to proceed with the delivery of such Note.
12. Notices. All communications hereunder will be in writing and effective only
on receipt, and,
-------
if sent to an Agent, will be mailed, delivered or telegraphed and confirmed to
such Agent, at the address specified in Schedule 1 hereto; or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 4500
Park Granada, Calabasas, California 91302, Attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto
----------
and their respective successors and the officers and directors and controlling
persons referred to in Section 8 hereof, and no other person will have any right
or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws
--------------
of the State of New York applicable to agreements made and to be performed in
said State.
[Signature Page to Follow]
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and the acceptance by each of you shall represent a binding
agreement among the Company, the Guarantor and each of you.
Very truly yours,
COUNTRYWIDE HOME LOANS, INC.
By: _______________________________
Name:
Title:
COUNTRYWIDE CREDIT INDUSTRIES, INC.
By: _______________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
LEHMAN BROTHERS INC.
By:______________________________
Title:
BANC OF AMERICA SECURITIES LLC
By:______________________________
Title:
CHASE SECURITIES INC.
By:______________________________
Title:
DEUTSCHE BANK SECURITIES INC. DEUTSCHE BANK SECURITIES INC.
By:_____________________________ By:_____________________________
Title: Title:
---------------------------------
Goldman, Sachs & Co.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:______________________________
Title:
J.P. MORGAN SECURITIES INC.
By:______________________________
Title:
MORGAN STANLEY & CO. INCORPORATED
By:______________________________
Title:
SALOMON SMITH BARNEY INC.
By:______________________________
Title:
COUNTRYWIDE SECURITIES CORPORATION
By:______________________________
Title:
<PAGE>
38
SCHEDULE 1
Selling Agency Agreement dated June 15, 2000
Unless otherwise agreed between the Company and such Agent, the Company
agrees to pay any Agent a commission equal to the following percentage of the
principal amount of each Note sold by such Agent:
Term Commission Rate(a)
From 9 months to less than 1 year........................... 0.125%
From 1 year to less than 18 months.......................... 0.150%
From 18 months to less than 2 years.................... .... 0.200%
From 2 years to less than 3 years.......................... 0.250%
From 3 years to less than 4 years........................... 0.350%
From 4 years to less than 5 years........................... 0.450%
From 5 years to less than 6 years............................ 0.500%
From 6 years to less than 7 years............................. 0.550%
From 7 years to less than 10 years............................ 0.600%
From 10 years to less than 15 years............................. 0.625%
From 15 years to less than 20 years............................. 0.650%
From 20 years up to and including 30 years(b) ................... 0.750%
-------------
(a) With respect to each Note that is an Original Issue Discount Note (as
defined in the Indenture), the commission payable to each Agent with
respect to each such Note sold as a result of a solicitation made by
such Agent shall be based on the purchase price of such Note, rather
than on the principal amount of such Note.
(b) Commissions for Notes with terms in excess of 30 years will be agreed
upon by the Company and the related Agent at the time of sale.
<PAGE>
Addresses for Notices to Agents:
Notices to Lehman Brothers Inc. shall be directed to it at 3 World Financial
Center, 9th Floor, New York, New York 10285, Attention: Medium-Term Note Desk,
Fax: (212) 526-1532.
Notices to Banc of America Securities LLC shall be directed to it at 100 North
Tryon Street, Charlotte, NC 28255, NC1-007-07-01, Attention: Product Management,
Fax: (704) 388-9939.
Notices to Chase Securities Inc. shall be directed to it at 270 Park Avenue, 8th
Floor, New York, New York 10017, Attention: Medium-Term Note Desk, Fax: (212)
834-6081.
Notices to Deutsche Bank Securities Inc. shall be directed to it at 31 W. 52nd
Street, New York, New York 10019, Attention: Erich Mauff, Fax: (212) 469-7875.
Notices to Goldman, Sachs & Co. shall be directed to it at 85 Broad Street, New
York, New York 10004, Attention: Ben Smilchensky, Fax: (212) 902-0658.
Notices to Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be directed
to it at 4 World Financial Center, 15th Floor, New York, New York 10080,
Attention: MTN Product Management, Fax: (212) 449-2234.
Notices to J.P. Morgan Securities Inc. shall be directed to it at 60 Wall
Street, 5th Floor, New York, New York 10260, Attention: Transaction Execution
Group, Fax: (212) 648-5151.
Notices to Morgan Stanley & Co. Incorporated shall be directed to it at 1585
Broadway, 2nd Floor, New York, New York 10036, Attention: Manager, Continuously
Offered Products, Fax: (212) 761-0780; with a copy to 1585 Broadway, 34th Floor,
New York, New York 10036, Attention: Peter Cooper, Investment Banking
Information Center, Fax: (212) 761-0260.
Notices to Salomon Smith Barney Inc. shall be directed to it at Seven World
Trade Center, New York, New York 10048, Attention: Medium-Term Note Department,
Fax: (212) 783-2274.
Notices to Countrywide Securities Corporation, 4500 Park Granada, CH-143,
Calabasas, California 91302, Attention: Tom O'Hallaron, Fax: (818) 225-4014.
Exhibit A
COUNTRYWIDE HOME LOANS, INC.
MEDIUM-TERM NOTE
ADMINISTRATIVE PROCEDURES
June 15, 2000
Medium-Term Notes, Series I, Due Nine Months or More From Date of Issue (the
"Notes") are to be offered on a continuing basis by Countrywide Home Loans, Inc.
(the "Company"). Lehman Brothers Inc., Banc of America Securities LLC, Chase
Securities Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc.
and Countrywide Securities Corporation (each individually, an "Agent", and
collectively, the "Agents"), have agreed to solicit purchases of the Notes. The
Agents will not be obligated to purchase Notes as principal. The Notes are being
sold pursuant to a Selling Agency Agreement among the Company, Countrywide
Credit Industries, Inc. (the "Guarantor") and the Agents dated June 15, 2000
(the "Agency Agreement"). The Notes will be fully and unconditionally guaranteed
as to payment of principal, premium, if any, and interest by the Guarantor (the
"Guarantees"). The Notes will rank equally with all other unsecured and
unsubordinated debt of the Company and have been registered with the Securities
and Exchange Commission (the "Commission"). Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Indenture
referred to below.
Each Note and related Guarantee will be issued under an Indenture dated
as of January 1, 1992, as supplemented by Supplemental Indenture No. 1 thereto
dated as of June 15, 1995 (collectively, the "Indenture"), among the Company,
the Guarantor and The Bank of New York, as trustee (the "Trustee"). The Notes
will bear interest at either fixed rates ("Fixed Rate Notes") or floating rates
("Floating Rate Notes"). Each Note will be represented by either a certificate
delivered to the Holder thereof or a Person designated by such Holder (a
"Certificated Note") or a Global Security (as defined hereinafter) delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC (a "Book-Entry Note"). An owner of a
Book-Entry Note will not be entitled to receive a certificate representing such
Note except in the limited circumstances described in the Prospectus (as defined
in the Agency Agreement).
The procedures to be followed during, and the specific terms of, the
solicitation of offers by the Agents and the sale as a result thereof by the
Company are explained below. Certificated Notes will be issued in accordance
with the administrative procedures set forth in Part I hereof and Book-Entry
Notes will be issued in accordance with the administrative procedures set forth
in Part II hereof. The Company will advise each Agent and the Trustee in writing
of those persons handling administrative responsibilities with whom the Agents
and the Trustee are to communicate regarding offers to purchase Notes and the
details of their delivery.
Administrative procedures and specific terms of the offering are
explained below. To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture or the Agency Agreement, the relevant
provisions of the Notes, the Indenture and the Agency Agreement shall control.
PART I: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Maturities: Each Certificated Note will mature
on a date (the "Stated Maturity
Date") nine months or more after the
date of delivery by the Company of
such Certificated Note (the
"Settlement Date"), subject to any
applicable provisions relating to
redemption or repayment or the
extension of maturity.
Price to Public:Certificated Note will be issued at the percentage of principal
---------------
amount specified in the Prospectus.
Currencies:The Certificated Notes will be denominated in U.S. dollars or in such
----------
other currency or currency unit as is specified in the Prospectus
(the "Specified Currency").
Denominations:Except as set forth in the Certificated Note, the denomination of
any
Certificated Note will be a minimum of U.S. $1,000 or any amount in excess
thereof which is an integral multiple of U.S. $1,000 or, in a Specified Currency
other than U.S. dollars, of the equivalent of U.S. $1,000 and any amount in
excess thereof which is an integral multiple of the equivalent of U.S. $1,000,
as determined pursuant to the provisions of the Indenture.
Registration: Certificated Notes will be issued only in fully registered form.
------------
Interest Payments:Except as set forth in the Certificated Note, each
Certificated Note
-----------------
which is a Fixed Rate Note will bear interest from the Settlement Date of such
Certificated Note at the annual rate stated on the face thereof, payable
semiannually on January 15 and July 15 of each year (each, an "Interest Payment
Date") and on the Stated Maturity Date or date of earlier redemption or
repayment (such date is herein referred to as the "Maturity Date" with respect
to the principal repayable on such date), and each Certificated Note which is a
Floating Rate Note will bear interest as determined in the manner set forth on
the face thereof, payable on the dates set forth on the face thereof. Unless
otherwise specified on the face thereof, interest (including payments for
partial periods) on Fixed Rate Notes will be calculated on the basis of a
360-day year of twelve 30-day months. Interest on Floating Rate Notes will be
determined in the manner agreed upon by the Company and the purchaser thereof in
accordance with the provisions of the Prospectus. Except as set forth in the
Certificated Note, the "Record Date" with respect to any Interest Payment Date
for Floating Rate Notes shall be the date 15 calendar days immediately preceding
such Interest Payment Date, and for Fixed Rate Notes shall be the December 31 or
June 30 next preceding such Interest Payment Date, whether or not such date
shall be a Business Day, as defined in the Prospectus. The first payment of
interest on any Certificated Note originally issued between a Record Date and an
Interest Payment Date will be made on the Interest Payment Date following the
next Record Date to the Holder on such next succeeding Record Date.
Notwithstanding the record date provisions above, interest payable on the
Maturity Date will be payable to the person to whom principal shall be payable.
Interest on the Certificated Notes will be paid in the Specified Currency by
mailing a check (from an account at a bank located outside of the United States
if such check is payable in a Specified Currency other than U.S. dollars) to the
Holder at the address of such Holder appearing on the Security Register on the
applicable Record Date; provided, however, that a
-------- -------
Holder of U.S. $10,000,000 (or the equivalent thereof in a Specified Currency
other than U.S. dollars) or more in aggregate principal amount of Notes (whether
or not having identical terms and provisions) shall be entitled: (i) if the
Specified Currency is U.S. dollars, to receive U.S. dollar payments by wire
transfer of immediately available funds to an account maintained by the payee
with a bank located in the United States, but only if appropriate wire transfer
instructions have been received in writing by the Trustee not later than the
Record Date immediately preceding the applicable Interest Payment Date, and (ii)
if the Specified Currency is other than U.S. dollars, to receive by wire
transfer of immediately available funds to an account maintained by the payee
with a bank located in a jurisdiction in which payment in such Specified
Currency is then lawful. Within ten days following each Record Date, the Trustee
will inform the Company of the total amount of the interest payments to be made
by the Company on the next succeeding Interest Payment Date and the currencies
or currency units in which such interest payments are to be made. The Trustee
will provide monthly to the Company a list of the principal and interest to be
paid on Certificated Notes maturing in the next succeeding month.
Procedure for Rate Setting and
Posting: The Company and the Agents will discuss from time to time the
--------
aggregate principal amount of, the issuance price of, and the interest rates to
be borne by, Certificated Notes that may be sold as a result of the solicitation
or offers by the Agents. If the Company decides to establish prices of
(including the currency of issuance), and rates borne by, any Certificated Notes
to be sold (the establishment of such prices and rates to be referred to herein
as "posting") or if the Company decides to change prices or rates previously
posted by it, it will promptly advise the Agents of the prices and rates to be
posted.
Acceptance of Offers:Unless otherwise agreed between the Company and such Agent,
any Agent
--------------------
which receives an offer to purchase Certificated Notes will promptly advise the
Company of each such offer other than offers rejected by such Agent as provided
below. The Company will have the sole right to accept any such offer to purchase
Certificated Notes. The Company may reject any such offer in whole or in part.
Unless otherwise agreed between the Company and any Agent, each Agent may, in
its discretion reasonably exercised, reject any offer to purchase Certificated
Notes received by it in whole or in part.
Preparation of Pricing Supplement:
If any offer to purchase a Certificated Note is accepted by or on
----------------------------------
behalf of the Company, the Company and the Guarantor, with the approval of the
Agents, will prepare a Pricing Supplement reflecting the terms of such
Certificated Note and will arrange to have requisite copies of such Pricing
Supplement filed with the Commission, in each case no later than the second
Business Day after the earlier of the determination of the offering price or the
date it is first used and will supply at least ten copies thereof (or additional
copies if requested) to the Agents and one copy to the Trustee no later than
11:00 A.M., New York City time, on the Business Day following the date of
acceptance at the following applicable address (unless otherwise specified in
the applicable trading confirmation): if to Lehman Brothers Inc., to Lehman
Brothers Inc., 3 World Financial Center, 9th Floor, New York, New York 10285,
attention Medium-Term Note Desk, telephone no. (212) 526-8400, telecopier no.
(212) 526-1532; if to Banc of America Securities LLC to The Bank of New York,
One Wall Street, 3rd Floor, Dealers Clearance, Window B, A/C Banc of America
Securities LLC; if to Chase Securities Inc., to Chase Securities Inc., 270 Park
Avenue, 8th Floor, New York, New York 10017, attention Medium-Term Note Desk,
telecopier no. (212) 834-6081; if to Deutsche Bank Securities Inc. to Deutsche
Bank Securities Inc., 31 West 52nd Street, New York, New York 10019, attention
of Erich Mauff, telephone no. (212) 469-7859, telecopier no. (212) 469-7875,
with a copy to Deutsche Bank Securities Inc., c/o ADP Prospectus, 536
Broadhollow Road, Melville, NY 11747, attention of Krista Zeoli, telephone no.
(516) 254-7107, telecopier no. (516) 254-7134; if to Goldman, Sachs & Co., to
Goldman, Sachs & Co., 85 Broad Street, 27th Floor, New York, New York 10004,
attention of Ben Smilchensky, telephone no. (212) 902-1482, telecopier no. (212)
902-0658; if to Merrill Lynch, Pierce, Fenner & Smith Incorporated, to Merrill
Lynch Production Technologies, by e-mail to [email protected], 44B Colonial
Drive, Piscataway, New Jersey 08854, attention Final Prospectus Unit/Nachman
Kimmerling, telephone no. (732) 885-2768, telecopier no. (732) 885-2774, with a
copy to Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial
Center, 15th Floor, New York, New York 10080, attention MTN Product Management,
telephone no. (212) 449-7476, telecopier no. (212) 449-2234; if to J.P. Morgan
Securities Inc., to J.P. Morgan Securities Inc. 60 Wall Street, 3rd Floor, New
York, New York 10260, attention Medium-Term Note Desk, telephone no. (212)
648-0591, telecopier no. (212) 648-5909; if to Morgan Stanley & Co.
Incorporated, to Morgan Stanley & Co. Incorporated, 1585 Broadway, 2nd Floor,
New York, New York 10036, attention Medium-Term Note Trading Desk, Carlos
Cabrera, telephone no. (212) 761-4000, telecopier no. (212) 761-0780; if to
Salomon Smith Barney Inc., to Salomon Smith Barney Inc., Brooklyn Army Terminal,
140 58th Street, 5th Floor, Brooklyn, NY 11220, attention of Dianne Graham,
telephone no. (718) 765-6736, telecopier no. (718) 765-6734; if to Countrywide
Securities Corporation, to Countrywide Securities Corporation, 4500 Park
Granada, CH-143, Calabasas, California 91302, attention of Tom O'Hallaron,
telephone no. (818) 225-3297, or, if after 5:00 p.m., (818) 225-3201, telecopier
no. (818) 225-4014 ; and if to the Trustee, to The Bank of New York, 101 Barclay
Street, New York, New York 10286, attention Corporate Trust Office. Such Agent
will cause a Pricing Supplement to be delivered to the purchaser of the
Certificated Note. In all respects, the Company and the Guarantor will prepare
and file each such Pricing Supplement in accordance with Rule 424 under the Act.
In each instance that a Pricing
Supplement is prepared, each Agent
will affix the Pricing Supplement to
Prospectuses prior to their use;
provided, however, that pursuant to
Rule 434 ("Rule 434") under the
Securities Act of 1933, as amended,
the Pricing Supplement may be
delivered separately from the
Prospectuses. Outdated Pricing
Supplements, and the Prospectuses to
which they are attached or relate
(other than those retained for
files), will be destroyed.
Suspension of Solicitation;
Amendment or Supplement:
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 Certificated Notes. As soon as practicable,
but in no event later than one Business Day after receipt of instructions from
the Company, the Agents will suspend solicitation of offers to purchase
Certificated Notes from the Company until such time as the Company has advised
them that such solicitation may be resumed.
If the Company or the Guarantor
decides to amend or supplement the
Registration Statement or the
Prospectus relating to the Notes
(except in the case of a Pricing
Supplement to the Prospectus), the
Company or the Guarantor, as the
case may be, will promptly advise
the Agents and the Trustee and will
furnish the Agents and the Trustee
with the proposed amendment or
supplement in accordance with the
terms of the Agency Agreement. The
Company or the Guarantor will mail
or transmit to the Commission for
filing therewith any supplement to
the Prospectus relating to the
Notes, provide the Agents with
copies of any supplement, and
confirm to the Agents that such
supplement has been filed with the
Commission.
In the event that at the time the
Company suspends solicitation of
offers to purchase Certificated
Notes there shall be any outstanding
offers to purchase Certificated
Notes that have been accepted by the
Company but for which settlement has
not yet occurred, the Company will
promptly advise the Agents and the
Trustee whether such sales may be
settled and whether copies of the
Prospectus as supplemented to the
time of the suspension may be
delivered in connection with the
settlement of such sales. The
Company will have the sole
responsibility for such decision and
for any arrangements which may be
made in the event that the Company
determines that such sales may not
be settled or that copies of such
Prospectus may not be so delivered.
Delivery of Prospectus:
Each Agent shall, for each offer to purchase a Certificated Note that
-----------------------
is solicited by such Agent and accepted by the Company, deliver a copy of the
Prospectus as most recently amended or supplemented (including the applicable
Pricing Supplement which, pursuant to Rule 434, may be delivered separately from
the Prospectus) with the earlier of the delivery of the confirmation of sale or
the Certificated Note to the purchaser thereof or such purchaser's agent.
Confirmation: For each offer to purchase a
Certificated Note solicited by any
Agent and accepted by the Company,
such Agent will issue a confirmation
to the purchaser, with a copy to the
Company, setting forth the details
set forth above and delivery and
payment instructions.
Settlement: The Settlement Date with respect to any offer to purchase
----------
Certificated Notes accepted by or on behalf of the Company will be a date on or
before the third Business Day next succeeding the date of acceptance unless
otherwise agreed by the purchaser and the Company and shall be specified upon
acceptance of such offer. The Company will instruct the Trustee to effect
delivery of each Certificated Note no later than 1:00 p.m., New York City time,
on the Settlement Date to such Agent for delivery to the purchaser.
Details for Settlement: For each offer to
purchase a Certificated Note
received by any Agent and accepted
pursuant to the terms of the Agency
Agreement, such Agent will provide
(unless provided by the purchaser
directly to the Company) by
telephone the following information
(to the extent applicable) to the
Company:
1. Exact name of Holder.
2. Exact address of Holder and address for payment of principal, premium, if
any, and interest.
3. Taxpayer identification number of Holder (if available).
4. Principal amount of the Note.
5. Specified Currency.
6. Interest rate or interest rate basis.
7. Base Rate(s), Index Maturity, Initial Interest Rate, Maximum Interest Rate,
Minimum Interest Rate, Interest Reset Dates, Interest Payment Dates, Calculation
Dates, Interest Reset Dates and Spread and/or Spread Multiplier (as each such
term is defined in the Prospectus).
8. Issue price of Note and proceeds to Company.
9. Settlement Date.
10. Stated Maturity Date.
11. Redemption and/or repayment provisions, if any.
12. Agent's commission to be paid in the form of a discount upon settlement.
13. Other relevant terms, including any reset and/or extension provisions.
Such Agent will advise the Company
of the foregoing information (unless
provided by the purchaser directly
to the Company) for each offer to
purchase a Certificated Note
solicited by such Agent and accepted
by the Company in time for the
Trustee to prepare and authenticate
the required Certificated Note.
Before accepting any offer to
purchase a Certificated Note to be
settled in less than three Business
Days, the Company shall verify that
the Trustee will have adequate time
to prepare and authenticate such
Certificated Note.
After receiving from such Agent the
details for each offer to purchase a
Certificated Note, the Company will,
after recording the details and any
necessary calculations, provide
appropriate documentation to the
Trustee, including the information
provided by such Agent necessary for
the preparation and authentication
of such Certificated Note. Prior to
preparing the Certificated Note for
delivery (but in any case no later
than 11:00 a.m., New York City time,
on the Business Day next preceding
the Settlement Date therefor), the
Trustee will confirm the details of
such issue with such Agent by
telephone.
Note Deliveries and Cash Payment: Upon
receipt of appropriate documentation
and instructions, the Company will
cause the Trustee to prepare and
authenticate the pre-printed 4-ply
Certificated Note packet containing
the following documents in forms
approved by the Company, the Agents
and the Trustee:
1. Certificated Note with customer confirmation.
2. Stub 1--For the applicable Agent.
3. Stub 2--For the Company.
4. Stub 3--For the Trustee.
Each Certificated Note shall be
authenticated on or before the
Settlement Date therefor. The
Trustee will authenticate each
Certificated Note and deliver it to
such Agent (and deliver the stubs as
indicated above), all in accordance
with written instructions (which may
be in the form of facsimile
transmission) from the Company.
Delivery by the Trustee of each
Certificated Note will be made
against receipt by the Company by
1:00 p.m., New York City time, on
the Settlement Date in immediately
available funds of an amount equal
to the issue price of such
Certificated Note or the U.S. dollar
equivalent of the issue price of
such Note as agreed between the
Company and such Agent, unless
otherwise agreed between the Company
and such Agent, less such Agent's
commission.
Upon verification by such Agent that
a Note has been prepared and
properly authenticated by the
Trustee and registered in the name
of the purchaser in the proper
principal amount and that the
related Guarantee has been duly
endorsed thereon, payment will be
made to the Company by such Agent
the same day in immediately
available funds in the Specified
Currency. Such payment shall be made
only upon prior receipt by such
Agent of immediately available funds
from or on behalf of the purchaser
in the Specified Currency unless
such Agent decides, at its option,
to advance its own funds for such
payment against subsequent receipt
of funds from the purchaser.
Upon delivery of a Certificated Note
to such Agent, such Agent shall
promptly deliver such Certificated
Note to the purchaser.
In the event any Certificated Note
is incorrectly prepared, the Trustee
shall promptly issue a replacement
Certificated Note in exchange for
the incorrectly prepared
Certificated Note.
Failure to Settle:
If any Agent, at its own option, has advanced its own funds for
-----------------
payment against subsequent receipt of funds from the purchaser, and if the
purchaser shall fail to make payment for the Certificated Note on the Settlement
Date therefor, such Agent will promptly notify the Trustee and the Company by
telephone, promptly confirmed in writing (but no later than the next Business
Day). In such event, the Company shall promptly provide the Trustee with
appropriate documentation and instructions consistent with these procedures for
the return of the Certificated Note to the Trustee and such Agent will promptly
return the Certificated Note to the Trustee. Upon confirmation (i) from the
Trustee in writing (which may be given by telex or telecopy) that the Trustee
has received the Certificated Note and (ii) from such Agent in writing (which
may be given by telex or telecopy) that such Agent has not received payment from
the purchaser (the matters referred to in clauses (i) and (ii) are referred to
hereinafter as the "Confirmations"), the Company will promptly pay to such Agent
an amount in immediately available funds equal to the amount previously paid by
such Agent in respect of such Certificated Note. Assuming receipt of the
Certificated Note by the Trustee and of the Confirmations by the Company, such
payment will be made on the Settlement Date, if reasonably practicable, and in
any event not later than the Business Day following the date of receipt of the
Certificated Note and Confirmations. If a purchaser shall fail to make payment
for the Certificated Note for any reason other than the failure of such Agent to
provide the necessary information to the Company as described above for
settlement or to provide a confirmation to the purchaser within a reasonable
period of time as described above or otherwise to satisfy its obligation
hereunder or in the Agency Agreement, and if such Agent shall have otherwise
complied with its obligations hereunder and in the Agency Agreement, the Company
will reimburse such 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.
Immediately upon receipt of the
Certificated Note in respect of
which the failure occurred, the
Trustee will void said Certificated
Note, make appropriate entries in
its records and destroy the
Certificated Note; and upon such
action, the Certificated Note will
be deemed not to have been issued,
authenticated and delivered.
Trustee Not to
Risk Funds:
Nothing herein shall be deemed to require the Trustee to risk or
----------
expend its own funds in connection with any payment to the Company, or any Agent
or the purchaser, it being understood by all parties that payments made by the
Trustee to either the Company or any Agent shall be made only to the extent that
funds are provided to the Trustee for such purpose.
Authenticity of Signatures:
The Company will cause the Trustee and the Guarantor to furnish each
---------------------------
Agent from time to time with the specimen signatures of the officers, employees
or agents who have been authorized to authenticate Certificated Notes or execute
the related Guarantee, as the case may be, but each Agent will have no
obligation or liability to the Company, the Guarantor or the Trustee in respect
of the authenticity of the signature of any officer, employee or agent of the
Company, the Guarantor or the Trustee on any Certificated Note.
Payment of Expenses:
Each Agent shall forward to the Company and the Guarantor, from time
-------------------
to time (but not more often than monthly), a statement of the out-of-pocket
expenses incurred by such Agent during the related period which are reimbursable
to it pursuant to the terms of the Agency Agreement. The Company and the
Guarantor will promptly remit payment to such Agent.
Advertising
Costs:
The Company will determine with each Agent the amount of advertising
-----
that may be appropriate in soliciting offers to purchase the Notes. Advertising
expenses will be paid by the Company and the Guarantor.
PART II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of Book-Entry Notes for eligibility in
the book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations from the
Company, the Guarantor and the Trustee to The Depository Trust Company ("DTC")
of even date herewith and a Medium-Term Note Certificate Agreement between the
Trustee and DTC, dated April 14, 1989 and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance:
On any Settlement Date (as defined under "Settlement" below) for one
--------
or more Fixed Rate Book-Entry Notes, the Company will issue a single global
security in fully registered form without coupons (a "Global Security")
representing up to U.S. $400,000,000 principal amount of all of such Notes that
have the same Issue Date, Specified Currency, Interest Rate, Stated Maturity
Date, redemption and/or repayment provisions and Interest Payment Dates.
Similarly, on any Settlement Date for one or more Floating Rate Book-Entry
Notes, the Company will issue a single Global Security representing up to U.S.
$400,000,000 principal amount of all of such Notes that have the same Issue
Date, Specified Currency, Base Rate(s), Index Maturity, Interest Reset Dates,
Spread and/or Spread Multiplier (if any), Initial Interest Rate, Interest
Payment Dates, Minimum Interest Rate (if any), Maximum Interest Rate (if any),
Stated Maturity Date and redemption and/or repayment provisions. Each Global
Security will be dated and issued as of the date of its authentication by the
Trustee. Each Global Security will bear an "Interest Accrual Date", which will
be (i) with respect to an original Global Security (or any portion thereof), its
original issuance date and (ii) with respect to any Global Security (or portion
thereof) issued subsequently upon exchange of a Global Security or in lieu of a
destroyed, lost or stolen Global Security, the most recent Interest Payment Date
to which interest has been paid or duly provided for on the predecessor Global
Security or Securities (or if no such payment or provision has been made, the
original issuance date of the predecessor Global Security), regardless of the
date of authentication of such subsequently issued Global Security. No Global
Security will represent any Certificated Note.
Price to Public:
Each Book-Entry Note will be issued at the percentage of principal
---------------
amount specified in the Prospectus.
Identification Numbers:
The Company will arrange, on or prior to commencement of a program
-----------------------
for the offering of Book-Entry Notes, with the CUSIP Service Bureau of Standard
& Poor's Ratings Group (the "CUSIP Service Bureau") for the reservation of a
series of CUSIP numbers (including tranche numbers), consisting of approximately
900 CUSIP numbers and relating to Global Securities representing the Book-Entry
Notes. The Trustee has or will obtain from the CUSIP Service Bureau a written
list of such series of reserved CUSIP numbers and will deliver to the Company
and DTC such written list of 900 CUSIP numbers of such series. The Company will
assign CUSIP numbers to Global Securities as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service Bureau periodically of the
CUSIP numbers that the Company has assigned to Global Securities. The Trustee
will notify the Company at any time when fewer than 100 of the reserved CUSIP
numbers remain unassigned to Global Securities, and if it deems necessary, the
Company will reserve additional CUSIP numbers for assignment to Global
Securities representing Book-Entry Notes. Upon obtaining such additional CUSIP
numbers, the Trustee shall deliver such additional CUSIP numbers to the Company
and DTC.
Registration:
Each Global Security will be registered in the name of CEDE & CO., as
------------
nominee for DTC, on the Securities Register maintained under the Indenture
governing such Global Security. The beneficial owner of a Book-Entry Note (or
one or more indirect participants in DTC designated by such owner) will
designate one or more participants in DTC (with respect to such Note, the
"Participants") to act as agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such Participants, a credit balance
with respect to such Note in the account of such Participants. The ownership
interest of such beneficial owner in such Note will be recorded through the
records of such Participants or through the separate records of such
Participants and one or more indirect participants in DTC.
Transfers: Transfer of a Book-Entry Note will
be accomplished by book entries made
by DTC and, in turn, by Participants
(and in certain cases, one or more
indirect participants in DTC) acting
on behalf of beneficial transferors
and transferees of such Note.
Consolidation and Exchange:
The Trustee may deliver to DTC and the CUSIP Service Bureau at any
--------------------------
time a written notice of consolidation specifying (i) the CUSIP numbers of two
or more outstanding Global Securities that represent (A) Fixed Rate Book-Entry
Notes having the same Issue Date, Specified Currency, Interest Rate, Stated
Maturity Date, redemption and/or repayment provisions (if any) and Interest
Payment Dates and with respect to which interest has been paid to the same date
or (B) Floating Rate Book-Entry Notes having the same Issue Date, Specified
Currency, Base Rate, Index Maturity, Interest Reset Dates, Spread and/or Spread
Multiplier (if any), Initial Interest Rate, Interest Payment Dates, Minimum
Interest Rate (if any), Maximum Interest Rate (if any), redemption and/or
repayment provisions (if any) and Stated Maturity Date and with respect to which
interest has been paid to the same date, (ii) a date, occurring at least thirty
days after such written notice is delivered and at least thirty days before the
next Interest Payment Date for such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single replacement Global Security and (iii)
a new CUSIP number, obtained from the Company, to be assigned to such
replacement Global Security. Upon receipt of such a notice, DTC will send to its
Participants (including the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified exchange date, the Trustee
will exchange such Global Securities for a single Global Security bearing the
new CUSIP number and a new Interest Accrual Date, and the CUSIP numbers of the
exchanged Global Securities will, in accordance with CUSIP Service Bureau
procedures, be cancelled and not immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be exchanged exceed U.S. $400,000,000 in
aggregate principal amount, one Global Security will be authenticated and issued
to represent each U.S. $400,000,000 of principal amount of the exchanged Global
Securities and an additional Global Security will be authenticated and issued to
represent any remaining principal amount of such Global Securities (see
"Denominations" below).
Maturities:
Each Book-Entry Note will mature on a date nine months or more after
----------
the Settlement Date for such Note.
Notice of Redemption Date: The Trustee will
notify DTC not more than 60 but not
less than 30 days prior to each
redemption date, if any, with
respect to a Book-Entry Note, of the
CUSIP number of such Note, the
redemption date, the redemption
price and the principal amount of
such Book-Entry Note to be redeemed.
Denominations:
Book-Entry Notes will be issued in principal amounts of U.S. $1,000
-------------
or any amount in excess thereof that is an integral multiple of U.S. $1,000.
Global Securities will be denominated in principal amounts not in excess of U.S.
$400,000,000. If one or more Book-Entry Notes having an aggregate principal
amount in excess of U.S. $400,000,000 would, but for the preceding sentence, be
represented by a single Global Security, then one Global Security will be issued
to represent each U.S. $400,000,000 principal amount of such Book-Entry Note or
Notes and an additional Global Security will be issued to represent any
remaining principal amount of such Book-Entry Note or Notes. In such a case,
each of the Global Securities representing such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
Interest: General.
Interest on each Book-Entry Note will accrue from the
-------- -------
Interest Accrual Date of the Global Security representing such Note. Except as
set forth in the underlying Global Security, each Book-Entry Note which is a
Fixed Rate Note will bear interest at the annual rate stated in such Global
Security, payable semiannually on January 15 and July 15 of each year (each, an
"Interest Payment Date") and on the Maturity Date, and each Book-Entry Note
which is a Floating Rate Note will bear interest as determined in the manner set
forth in such Global Security, payable on the dates set forth on such Global
Security. Except as set forth in the underlying Global Security, interest
(including payments for partial periods) on Fixed Rate Notes will be calculated
on the basis of a 360-day year of twelve 30-day months. Except as set forth in
the underlying Global Security, interest on Book-Entry Notes which are Floating
Rate Notes will be determined in the manner agreed upon by the Company and the
purchaser thereof in accordance with the provisions of the Prospectus. Except as
set forth in the underlying Global Security, the "Record Date" with respect to
any Interest Payment Date for Book-Entry Notes which are Floating Rate Notes
shall be the date 15 calendar days immediately preceding such Interest Payment
Date, and for Fixed Rate Notes shall be the December 31 or June 30 next
preceding such Interest Payment Date, whether or not such date shall be a
Business Day. The first payment of interest on any Book-Entry Note originally
issued between a Record Date and an Interest Payment Date will be made on the
Interest Payment Date following the next succeeding Record Date to the Holder on
such next succeeding Record Date. Notwithstanding the record date provisions
above, interest payable on the Maturity Date will be payable to the person to
whom principal shall be payable.
Standard & Poor's Ratings Group will
use the information received in the
pending deposit message described
under Settlement Procedure "C" below
in order to include the amount of
any interest payable and certain
other information regarding the
related Global Security in the
appropriate weekly bond report
published by Standard & Poor's
Ratings Group.
On the first Business Day of
January, April, July and October of
each year, the Trustee will deliver
to the Company and DTC a written
list of Record Dates and Interest
Payment Dates that will occur with
respect to Floating Rate Book-Entry
Notes during the six-month period
beginning on such first Business
Day. Promptly after each Interest
Determination Date (as defined in
the Prospectus) for Floating Rate
Notes, the Company will notify the
Trustee, and the Trustee in turn
will notify Standard & Poor's
Ratings Group, of the interest rates
determined on such Interest
Determination Date.
Payments of Principal and Interest: Payments of Interest Only. .
Promptly after each Record Date, the
---------------------------------- -------------------------
Trustee will deliver to the Company and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each Global Security on the
following Interest Payment Date (other than an Interest Payment Date coinciding
with a Maturity Date) and the total of such amounts. DTC will confirm the amount
payable on each Global Security on such Interest Payment Date by reference to
the daily bond reports published by Standard & Poor's Corporation. The Company
will pay to the Trustee, as paying agent, the total amount of interest due on
such Interest Payment Date (other than on the Maturity Date), and the Trustee
will pay such amount to DTC 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 Trustee will deliver to the Company and DTC
a written list of principal and interest to be paid on each Global Security with
a Maturity Date in the following month. The Company, the Trustee and DTC will
confirm the amounts of such principal and interest payments with respect to each
such Global Security on or about the fifth Business Day preceding the Maturity
Date of such Global Security. The Company will pay to the Trustee, as the paying
agent, the principal amount of such Global Security, together with interest due
on such Maturity Date. The Trustee will pay such amount to DTC at the time and
in the manner set forth below under "Manner of Payment".
Promptly after payment to DTC of the
principal and interest due on the
Maturity Date of such Global
Security, the Trustee will cancel
such Global Security and deliver it
to the Company with an appropriate
debit advice. On the first Business
Day of each month, the Trustee will
prepare a written statement
indicating the total principal
amount of outstanding Global
Securities for which it serves as
trustee as of the immediately
preceding Business Day.
Manner of Payment. The total amount
of any principal and interest due on
Global Securities on any Interest
Payment Date or on the Maturity Date
shall be paid by the Company to the
Trustee in funds available for use
by the Trustee as of 9:30 A.M. (New
York City time) on such date. The
Company will make such payment on
such Global Securities by
instructing the Trustee to withdraw
funds from an account maintained by
the Company at the Trustee. For
maturity, redemption, repayment or
any other principal payments: prior
to 10:00 A.M. (New York City time)
on such date or as soon as possible
thereafter, the Trustee will make
such payments to DTC in same day
funds in accordance with DTC's Same
Day Funds Settlement Paying Agent
Operating Procedures. For interest
payments: the Trustee will make such
payments to DTC in accordance with
existing arrangements between DTC
and the Trustee. DTC will allocate
such payments to its participants in
accordance with its existing
operating procedures. Neither the
Company (either as Issuer or as
Paying Agent), the Trustee or any
Agent shall have any direct
responsibility or liability for the
payment by DTC to such Participants
of the principal of and interest on
the Book-Entry Notes.
Withholding Taxes. The amount of any
taxes required under applicable law
to be withheld from any interest
payment on a Book-Entry Note will be
determined and withheld by the
Participant, indirect participant in
DTC or other Person responsible for
forwarding payments and materials
directly to the beneficial owner of
such Note.
Procedure for Rate Setting
and Posting:
The Company and the Agents will discuss from time to time the
-----------
aggregate principal amount of, the issuance price of, and the interest rates to
be borne by, Book-Entry Notes that may be sold as a result of the solicitation
or offers by the Agents. If the Company decides to establish prices of
(including the currency of issuance), and rates borne by, any Book-Entry Notes
to be sold (the establishment of such prices and rates to be referred to herein
as "posting") or if the Company decides to change prices or rates previously
posted by it, it will promptly advise the Agents of the prices and rates to be
posted.
Acceptance
of Offers:
Unless otherwise agreed between the Company and such Agent, any Agent
---------
which receives an offer to purchase Book-Entry Notes will promptly advise the
Company of each such offer other than offers rejected by such Agent as provided
below. The Company will have the sole right to accept any such offer to purchase
Book-Entry Notes. The Company may reject any such offer in whole or in part.
Unless otherwise agreed between the Company and any Agent, each Agent may, in
its discretion reasonably exercised, reject any offer to purchase Book-Entry
Notes received by it in whole or in part.
Preparation of Pricing Supplement:
If any offer to purchase a Book-Entry Note is accepted by or on behalf of the
Company, the Company and the Guarantor, with the approval of the Agents, will
prepare a Pricing Supplement reflecting the terms of such Book-Entry Note and
will arrange to have requisite copies of such Pricing Supplement filed with the
Commission, in each case no later than the second Business Day after the earlier
of the determination of the offering price or the date it is first used and will
supply at least ten copies thereof (or additional copies if requested) to the
Agents and one copy to the Trustee no later than 11:00 A.M., New York City time,
on the Business Day following the date of acceptance at the following applicable
address (unless otherwise specified in the applicable trading confirmation): if
to Lehman Brothers Inc., to Lehman Brothers Inc., 3 World Financial Center, 9th
Floor, New York, New York 10285, attention Medium-Term Note Desk, telephone no.
(212) 526-8400, telecopier no. (212) 526-1532; if to Banc of America Securities
LLC, to The Bank of New York, One Wall Street, 3rd Floor, Dealers Clearance,
Window B, A/C Banc of America Securities LLC; if to Chase Securities Inc., to
Chase Securities Inc., 270 Park Avenue, 8th Floor, New York, New York 10017,
attention Medium-Term Note Desk, telecopier no. (212) 834-6081; if to Deutsche
Bank Securities Inc. to Deutsche Bank Securities Inc., 31 West 52nd Street, New
York, New York 10019, attention of Erich Mauff, telephone no. (212) 469-7859,
telecopier no. (212) 469-7875, with a copy to Deutsche Bank Securities Inc., c/o
ADP Prospectus, 536 Broadhollow Road, Melville, NY 11747, attention of Krista
Zeoli, telephone no. (516) 254-7107, telecopier no. (516) 254-7134; if to
Goldman, Sachs & Co., to Goldman, Sachs & Co., 85 Broad Street, 27th Floor, New
York, New York 10004, attention of Ben Smilchensky, telephone no. (212)
902-1482, telecopier number (212) 902-0658; if to Merrill Lynch, Pierce, Fenner
& Smith Incorporated, to Merrill Lynch Production Technologies, by e-mail to
[email protected], 44B Colonial Drive, Piscataway, New Jersey 08854,
attention of Nachman Kimmerling/Final Prospectus Unit, telephone no. (732)
885-2768, telecopier no. (732) 885-2774, with a copy to Merrill Lynch, Pierce,
Fenner & Smith Incorporated, 4 World Financial Center, 15th Floor, New York, New
York 10080, attention MTN Product Management, telephone no. (212) 449-7476,
telecopier no. (212)449-2234; if to J.P. Morgan Securities Inc. to J.P. Morgan
Securities Inc., 60 Wall Street, 3rd Floor, New York, New York 10260, attention
Medium-Term Note Desk, telephone no. (212) 648-0591, telecopier no. (212)
648-5909; if to Morgan Stanley & Co. Incorporated, to Morgan Stanley & Co.
Incorporated, 1585 Broadway, 2nd Floor, New York, New York 10036, attention
Medium-Term Note Trading Desk, Carlos Cabrera, telephone no. (212) 761-4000,
telecopier no. (212) 761-0780; if to Salomon Smith Barney Inc., to Salomon Smith
Barney Inc., Brooklyn Army Terminal, 140 58th Street, 5th Floor, Brooklyn, NY
11220, attention of Dianne Graham, telephone no. (718) 765-6736, telecopier no.
(718) 765-6734; if to Countrywide Securities Corporation, to Countrywide
Securities Corporation, 4500 Park Granada, CH-143, Calabasas, California 91302,
attention of Tom O'Hallaron, telephone no. (818) 225-3297, or, if after 5:00
p.m., (818) 225-3201, telecopier no. (818) 225-4014; and if to the Trustee, to
The Bank of New York, 101 Barclay Street, New York, New York 10286, attention
Corporate Trust Office. Such Agent will cause a Pricing Supplement to be
delivered to the purchaser of the Book-Entry Note. In all respects, the Company
and the Guarantor will prepare and file each such Pricing Supplement in
accordance with Rule 424 under the Act. In each instance that a Pricing
Supplement is prepared, each Agent will affix the Pricing Supplement to
Prospectuses prior to their use; provided, however, that pursuant to Rule 434,
the Pricing Supplement may be delivered separately from the Prospectuses.
Outdated Pricing Supplements, and the Prospectuses to which they are attached or
relate (other than those retained for files), will be destroyed.
Suspension of Solicitation;
Amendment or Supplement:
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 Book-Entry Notes. As soon as practicable, but
in no event later than one Business Day after receipt of instructions from the
Company, the Agents will suspend solicitation of offers to purchase Book-Entry
Notes from the Company until such time as the Company has advised them that such
solicitation may be resumed.
If the Company or the Guarantor
decides to amend or supplement the
Registration Statement or the
Prospectus relating to the Notes
(except in the case of a Pricing
Supplement to the Prospectus), the
Company or the Guarantor, as the
case may be, will promptly advise
the Agents and the Trustee and will
furnish the Agents and the Trustee
with the proposed amendment or
supplement in accordance with the
terms of the Agency Agreement. The
Company or the Guarantor will mail
or transmit to the Commission for
filing therewith any supplement to
the Prospectus relating to the
Notes, provide the Agents with
copies of any supplement, and
confirm to the Agents that such
supplement has been filed with the
Commission.
In the event that at the time the
Company suspends solicitation of
offers to purchase Book-Entry Notes
there shall be any outstanding
offers to purchase Book-Entry Notes
that have been accepted by the
Company but for which settlement has
not yet occurred, the Company will
promptly advise the Agents and the
Trustee whether such sales may be
settled and whether copies of the
Prospectus as supplemented to the
time of the suspension may be
delivered in connection with the
settlement of such sales. The
Company will have the sole
responsibility for such decision and
for any arrangements which may be
made in the event that the Company
determines that such sales may not
be settled or that copies of such
Prospectus may not be so delivered.
Delivery of
Prospectus:
Each Agent shall, for each offer to purchase a Book-Entry Note that
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is solicited by such Agent and accepted by the Company, deliver a copy of the
Prospectus as most recently amended or supplemented (including the applicable
Pricing Supplement which, pursuant to Rule 434, may be delivered separately from
the Prospectus) with the earlier of the delivery of the confirmation of sale or
the Book-Entry Note to the purchaser thereof or such purchaser's agent.
Confirmation: Such Agent will confirm the purchase
of such Note to the purchaser either
by transmitting to the Participants
with respect to such Note a
confirmation order or orders through
DTC's institutional delivery system
or by mailing a written confirmation
to such purchaser.
Settlement:
The receipt by the Company of immediately available funds in payment
----------
for a Book-Entry Note and the authentication and issuance of the Global Security
representing such Note shall constitute "settlement" with respect to such Note.
The "Settlement Date" with respect to any offer to purchase Book-Entry Notes
accepted by or on behalf of the Company will be a date on or before the third
Business Day next succeeding the date of acceptance unless otherwise agreed by
the purchaser and the Company and shall be specified upon acceptance of such
offer.
Settlement
Settlement Procedures with regard to each Book-Entry
----------
Procedures:
Note sold by the Company through an Agent, as agent, shall be as
----------
follows:
A. Such Agent will advise the Company by telephone of the following settlement
information:
1. Principal amount.
2. Specified Currency.
3. Stated Maturity Date.
4. In the case of a Fixed Rate Book-Entry Note, the interest rate, or, in the
case of a Floating Rate Book-Entry Note, Base Rate, Index Maturity, Initial
Interest Rate, Maximum Interest Rate, Minimum Interest Rate, Interest Reset
Dates, Interest Payment Dates, Calculation Dates, Interest
Reset Dates and Spread and/or Spread Multiplier.
5. Settlement Date.
6. Redemption and/or repayment provisions, if any.
7. Estate Option, if applicable.
8. Agent's commission, determined as provided in the Agency Agreement between
the Company and such Agent.
9. The DTC Participant account number of such Agent.
10. Taxpayer identification number of beneficial owner (if available).
11. Issue price of Book-Entry Note and proceeds to the
Company.
B. The Trustee will assign
a CUSIP number to the
Global Security
representing such
Book-Entry Note and will
then advise the Company of
such CUSIP number. The
Company will then advise
the Trustee by electronic
transmission (confirmed by
telephone) of the
information set forth in
Settlement Procedure "A"
above and the name of such
Agent. Each such
communication by the
Company shall constitute a
representation and warranty
by the Company to the
Trustee and each Agent that
(i) such Note is then, and
at the time of issuance and
sale thereof will be, duly
authorized for issuance and
sale by the Company, (ii)
such Note, and the Global
Security representing such
Note, will conform with the
terms of the Indenture
pursuant to which such Note
and Global Security are
issued and (iii) upon
authentication and delivery
of such Global Security,
the aggregate initial
offering price of all Notes
issued under the Indenture
will not exceed
$3,000,000,000 (except for
Book-Entry Notes
represented by Global
Securities authenticated
and delivered in exchange
for or in lieu of Global
Securities pursuant to the
Indenture and except for
Certificated Notes
authenticated and delivered
upon registration of
transfer of, in exchange
for, or in lieu of
Certificated Notes pursuant
to the Indenture).
C. The Trustee will enter a
pending deposit message
through DTC's Participant
Terminal System, providing
the following settlement
information to DTC, such
Agent, Standard & Poor's
Ratings Group and, upon
request, the Trustee under
the Indenture pursuant to
which such Note is to be
issued:
1. The information set forth in Settlement Procedure "A".
2. Identification as a Fixed Rate Book-Entry Note or a Floating Rate Book-Entry
Note.
3. Initial Interest Payment Date for such Note and amount of interest payable on
such Interest Payment Date.
4. Frequency of interest payments (monthly, semiannually, quarterly, etc.).
5. CUSIP number of Global Security representing such Note.
6. Whether such Global Security will represent any other Book-Entry Note (to the
extent known at such time).
D. The Trustee will complete the Global Security, the form of which was
previously approved by the Company, the Agents and the Trustee.
E. The Trustee, as Trustee, will authenticate the Global Security representing
such Note.
F. DTC will credit such Note to the Trustee's participant account at DTC.
G. The Trustee will enter
an SDFS deliver order
through DTC's Participant
Terminal System instructing
DTC to (i) debit such Note
to the Trustee's
participant account and
credit such Note to such
Agent's participant account
and (ii) debit such Agent's
settlement account and
credit the Trustee's
settlement account for an
amount equal to the price
of such Note less such
Agent's commission. The
entry of such a deliver
order shall constitute a
representation and warranty
by the Trustee to DTC that
(i) the Global Security
representing such
Book-Entry Note has been
issued and authenticated
and (ii) the Trustee is
holding such Global
Security pursuant to the
Certificate Agreement.
H. Such Agent will enter an
SDFS deliver order through
DTC's Participant Terminal
System instructing DTC (i)
to debit such Note to such
Agent's participant account
and credit such Note to the
participant accounts of the
Participants with respect
to such Note and (ii) to
debit the settlement
accounts of such
Participants and credit the
settlement account of such
Agent for an amount equal
to the price of such Note.
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 Trustee will credit to an account of the Company maintained at the
Trustee funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure "G".
K. The Trustee will hold
the Global Security
pursuant to the Certificate
Agreement and will send a
photocopy of such Global
Security to the Company by
first-class mail. Upon
written request the Trustee
will deliver a photocopy of
such Global Security to
such Agent. Periodically,
the Trustee will send to
the Company a statement
setting forth the principal
amount of Notes Outstanding
as of that date and setting
forth a brief description
of any sales of which the
Company has advised the
Trustee but which have not
yet been settled.
L. As set forth in
"Delivery of Prospectus"
above, such Agent will
deliver to the purchaser a
copy of the most recent
Prospectus applicable to
the Book-Entry Note with or
prior to any written offer
of Book-Entry Notes and the
confirmation and payment by
the purchaser of such Note.
Such Agent will confirm the purchase
of such Note to the purchaser either
by transmitting to the Participants
with respect to such Note a
confirmation order or orders through
DTC's institutional delivery system
or by mailing a written confirmation
to such purchaser.
Settlement Procedures
Timetable:
For offers to purchase Book-Entry Notes solicited by an Agent, as
----------
agent, and accepted by the Company for settlement on the first Business Day
after the sale date, 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-B 11:00 A.M. on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on 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
L 5:00 P.M. on Settlement Date
If a sale is to be settled more than
one Business Day after the sale
date, Settlement Procedures "A", "B"
and "C" shall be completed as soon
as practicable but no later than
11:00 A.M. and 2:00 P.M., as the
case may be, on the first Business
Day after the sale date. If the
initial interest rate for a Floating
Rate Book-Entry Note has not been
determined at the time that
Settlement Procedure "A" is
completed, Settlement Procedures "B"
and "C" shall be completed as soon
as such rate has been determined but
no later than 11:00 A.M. and 12:00
Noon, respectively, on the second
Business Day before the Settlement
Date. Settlement Procedure "I" is
subject to extension in accordance
with any extension of Fedwire
closing deadlines and in the other
events specified in the SDFS
operating procedures in effect on
the Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
-----------------
Book-Entry Note pursuant to Settlement Procedure "G", the Trustee may deliver to
DTC, through DTC's Participant Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such Note to the Trustee's
participant account. DTC will process the withdrawal message, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Note that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with respect to all the Book-Entry
Notes represented by a Global Security, the Trustee will mark such Global
Security "canceled", make appropriate entries in the Trustee's records and send
such canceled Global Security to the Company. The CUSIP number assigned to such
Global Security shall, in accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If a withdrawal message is processed
with respect to one or more, but not all, of the Book-Entry Notes represented by
a Global Security, the Trustee will exchange such Global Security for two Global
Securities, one of which shall represent such Book-Entry Note or Notes and shall
be canceled immediately after issuance and other Book-Entry Notes previously
represented by the surrendered Global Security and shall bear the CUSIP number
of the surrendered Global Security.
If the purchase price for any
Book-Entry Note is not timely paid
to the Participants with respect to
such Note by the beneficial
purchaser thereof (or a Person,
including an indirect participant in
DTC, acting on behalf of such
purchaser), such Participants and,
in turn, the Agent for such Note may
enter SDFS deliver orders through
DTC's Participant Terminal System
reversing the orders entered
pursuant to Settlement Procedures
"H" and "G", respectively.
Thereafter, the Trustee will deliver
the withdrawal message and take the
related actions described in the
preceding paragraph.
Notwithstanding the foregoing, upon
any failure to settle with respect
to a Book-Entry Note, DTC may take
any actions in accordance with its
SDFS operating procedures then in
effect. In the event of a failure to
settle with respect to one or more,
but not all, of the Book-Entry Notes
to have been represented by a Global
Security, the Trustee will provide,
in accordance with Settlement
Procedures "D" and "E", for the
authentication and issuance of a
Global Security representing the
other Book-Entry Notes to have been
represented by such Global Security
and will make appropriate entries in
its records.
Trustee Not to
Risk Funds:
Nothing herein shall be deemed to require the Trustee to risk or
----------
expend its own funds in connection with any payment to the Company, or any Agent
or the purchaser, it being understood by all parties that payments made by the
Trustee to either the Company or any Agent shall be made only to the extent that
funds are provided to the Trustee for such purpose.
Authenticity of Signatures:
The Company will cause the Trustee and the Guarantor to furnish each
--------------------------
Agent from time to time with the specimen signatures of the officers, employees
or agents who have been authorized to authenticate Notes or execute the related
Guarantee, but each Agent will have no obligation or liability to the Company,
the Guarantor or the Trustee in respect of the authenticity of the signature of
any officer, employee or agent of the Company, the Guarantor or the Trustee on
any Note.
Payment of Expenses:
Each Agent shall forward to the Company and the Guarantor, from time
-------------------
to time (but not more often than monthly), a statement of the out-of-pocket
expenses incurred by such Agent during the related period which are reimbursable
to it pursuant to the terms of the Agency Agreement. The Company and the
Guarantor will promptly remit payment to such Agent.
Advertising Costs:
The Company will determine with each Agent the amount of advertising
------------------
that maybe appropriate in soliciting offers to purchase the Notes. Advertising
expenses will be paid by the Company and the Guarantor.
EXHIBIT B
Countrywide Home Loans, Inc.
U.S. $3,000,000,000
Medium-Term Notes, Series I
Due Nine Months or More
From Date of Issue
Payment of Principal, Premium, if any, and Interest
Fully and Unconditionally Guaranteed by
Countrywide Credit Industries, Inc.
TERMS AGREEMENT
_________________, 20__
Countrywide Home Loans, Inc.
4500 Park Granada
Calabasas, California 91302
Attention: Corporate Counsel
Subject in all respects to the terms and conditions of the Selling Agency
Agreement dated June 15, 2000 among Lehman Brothers Inc., Banc of America
Securities LLC, Chase Securities Inc., Deutsche Bank Securities Inc., Goldman,
Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc.
and Countrywide Securities Corporation and you (the "Agreement"), the
undersigned agrees to purchase the following Medium-Term Notes, Series I (the
"Notes"), of Countrywide Home Loans, Inc.:
Aggregate Principal Amount:
Currency or Currency Unit:
Interest Rate or Base Rate(s):
Spread:
Spread Multiplier:
Stated Maturity Date:
Interest Payment Dates:
Record Dates:
Purchase Price: % of Principal Amount [plus accrued interest, if any, from
_______________, 20 __]
Purchase Date and Time:
Certificated or Book-Entry Form:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in the requirements to deliver the documents specified in
Section 6(b) of the Agreement:
Period during which additional Notes may not be sold pursuant to Section 4(l) of
the Agreement:
Default provisions, if any:
Other terms:
[PURCHASERS]
By: _______________________________
Accepted:
COUNTRYWIDE HOME LOANS, INC.
By: ______________________________
Title:
COUNTRYWIDE CREDIT INDUSTRIES, INC.
By: ______________________________
Title:
