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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 4, 1996
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M.A. Hanna Company
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(Exact name of registrant as specified in its charter)
Delaware 1-5222 34-023435
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(State Or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification Number)
Of Incorporation)
Suite 36-5000, 200 Public Square, Cleveland, Ohio 44114-2304
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 589-4000
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Exhibit Index Appears on sequential page 3.
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Item 5. Other Events.
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The Company is filing herewith the following exhibits to its
Registration Statement on Form S-3 (File No. 333-5763), which was declared
effective on November 8, 1996.
1. Selling Agency Agreement, dated as of December 4, 1996,
by and among M. A. Hanna Company, Salomon Brothers Inc
and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
2. Opinion of Jones, Day, Reavis
& Pogue relating to certain tax matters
3. Consent of Jones, Day, Reavis & Pogue
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
M.A. HANNA COMPANY
Date: December 17, 1996 By: /s/ John S. Pyke, Jr.
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Name: John S. Pyke, Jr.
Title: Vice President and
Secretary
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EXHIBIT INDEX
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Exhibit Description of Exhibit
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4.2 Selling Agency Agreement, dated as of December 4, 1996,
by and among M. A. Hanna Company, Salomon Brothers Inc
and Merrill Lynch, Pierce, Fenner & Smith Incorporated
8.1 Opinion of Jones, Day, Reavis
& Pogue relating to tax matters
23.4 Consent of Jones, Day, Reavis & Pogue
(included in Exhibit 8.1)
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EXHIBIT 4.2
M. A. Hanna Company
$300,000,000 Medium-Term Notes
Due Nine Months or More
From Date of Issue
Selling Agency Agreement
December 4, 1996
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
Merrill Lynch, Pierce, Fenner & Smith,
Incorporated
North Tower
World Financial Center
New York, N.Y. 10281
[Co-agents]
Dear Sirs:
M. A. Hanna Company, a Delaware corporation (the "Company"),
confirms its agreement with each of you with respect to the issue and sale by
the Company of up to $300,000,000 aggregate principal amount of its Medium-Term
Notes Due Nine Months or More from Date of Issue (the "Notes"). The Notes will
be issued under an indenture (the "Indenture") dated as of November 9, 1996
between the Company and NBD Bank, as trustee (the "Trustee"). Unless otherwise
specifically provided for and set forth in a Pricing Supplement (as defined
below), the Notes will be issued in minimum denominations of $1,000 and in
denominations exceeding such amount by integral multiples of $1,000, will be
issued only in fully registered form and will have the interest rates,
maturities and, if applicable, other terms set forth in such Pricing Supplement.
The Notes will be issued, and the terms thereof established, in accordance
with the Indenture and the Medium-Term Notes Administrative Procedures attached
hereto as Exhibit A (the "Procedures") (unless a Terms Agreement (as defined in
Section 2(b)) modifies or otherwise
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supersedes such Procedures with respect to the Notes issued pursuant to such
Terms Agreement). The Procedures may be amended only by written agreement of the
Company and you after notice to, and with the approval of, the Trustee. For the
purposes of this Agreement and subject to Section 12 hereof, the term "Agent"
shall refer to any of you acting solely in the capacity as agent for the Company
pursuant to Section 2(a) and not as principal (collectively, the "Agents"), the
term "Purchaser" shall refer to one of you acting solely as principal pursuant
to Section 2(b) and not as agent, and the term "you" shall refer to you
collectively whether at any time any of you is acting in both such capacities or
in either such capacity. In acting under this Agreement, in whatever capacity,
each of you is acting individually and not jointly.
1. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to, and agrees with, you as set forth below in this Section 1.
Certain terms used in this Section 1 are defined in paragraph (e) hereof.
(a) The Company has complied with the requirements for use of
Form S-3 under the Securities Act of 1933 (the "Act") and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement on such Form or Schedule (File Number:
333-5763), including a basic prospectus, which has become effective,
for the registration under the Act of $300,000,000 aggregate principal
amount of debt securities (the "Securities"), including the Notes. Such
registration statement, as amended at the date of this Agreement, meets
the requirements set forth in Rule 415(a)(1)(ix) or (x) under the Act
and complies in all other material respects with said Rule. The Company
has included in such registration statement, or has filed or will file
with the Commission pursuant to the applicable paragraph of Rule 424(b)
under the Act, a supplement to the form of prospectus included in such
registration statement relating to the Notes and the plan of
distribution thereof (the "Prospectus Supplement"). In connection with
the sale of Notes the Company proposes to file with the Commission
pursuant to the applicable paragraph of Rule 424(b) under the Act
further supplements to the Prospectus Supplement (each a "Pricing
Supplement") specifying the interest rates, maturity dates and, if
appropriate, other similar terms of the Notes sold pursuant hereto or
the offering thereof.
(b) As of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission, as of the
date of a Terms Agreement and at the date of delivery by the Company of
any Notes sold hereunder (a "Closing 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 will
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comply in all material respects with the applicable requirements of
the Act, the Trust Indenture Act of 1939 (the "Trust Indenture Act")
and the Securities Exchange Act of 1934 (the "Exchange Act") and the
respective rules thereunder; (ii) the Registration Statement, as
amended as of any such time, did not or will not contain 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; and (iii) the Prospectus, as
supplemented as of any such time, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representations or warranties as to
(i) that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by any of you
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) As of the time any Notes are issued and sold hereunder, the
Indenture will constitute a legal, valid and binding instrument
enforceable against the Company in accordance with its terms subject
to the effect of (i) general principles of equity, regardless of
whether such enforceability is considered in a proceding in equity or
at law, and (ii) any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and such Notes will have been duly authorized, executed,
authenticated and, when paid for by the purchasers thereof, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture.
(d) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "the Effective Date" shall mean
each date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective and each
date after the date hereof on which a document incorporated by
reference in the Registration Statement is filed. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall mean the
form of basic prospectus relating to the Securities contained in the
Registration Statement at the Effective Date. "Prospectus" shall mean
the Basic Prospectus as supplemented by the Prospectus Supplement.
"Registration
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Statement" shall mean the registration statement referred to in
paragraph (a) above, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time. "Rule 415" and
"Rule 424" refer to such rules under the Act. Any reference herein to
the Registration Statement, the Basic Prospectus , the Prospectus
Supplement 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 Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the
case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, the
Prospectus Supplement or the Prospectus, as the case may be, deemed to
be incorporated therein by reference.
(e) To the Company's knowledge, the Company does not do business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes.
2. APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS OF
OFFERS TO PURCHASE; SALES OF NOTES TO A PURCHASER. (a) Subject to the terms and
conditions set forth herein, the Company hereby authorizes each of the Agents 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 efforts to solicit offers to
purchase the Notes from the Company upon the terms and conditions set forth in
the Prospectus (and any supplement thereto) and in the Procedures. Each Agent
shall make reasonable efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes has been solicited by such Agent
and accepted by the Company, but such Agent shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity of any
purchaser or have any liability to the Company in the event any such purchase is
not consummated for any reason. Except as provided in Section 2(b), under no
circumstances will any Agent be obligated to purchase any Notes for its own
account. It is understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
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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 Notes. Upon receipt of
instructions from the Company, the Agents will forthwith suspend solicitation of
offers to purchase Notes from the Company until such time as the Company has
advised them that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, on the
Closing Date with respect to 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 of the aggregate principal amount of the Notes sold by the
Company. 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 an Agent as
agent for the Company at such time and in such amounts as such Agent deems
advisable. The Company may from time to time offer Notes for sale otherwise than
through an Agent; PROVIDED, HOWEVER, that, subject to Section 12 hereof, so long
as this Agreement is in effect the Company shall not solicit or accept offers to
purchase Notes through any agent other than an Agent. It is understood, however,
that if from time to time the Company is approached by a prospective agent
offering to solicit a specific purchase of Notes, the Company may engage such
agent with respect to such specific purchase, provided that (i) such agent is
engaged on terms substantially similar (including the same commission schedule)
to the terms of this Agreement and (ii) the Agents are given notice of such
purchase promptly.
If the Company shall default in its obligations to deliver
Notes to a purchaser whose offer it has accepted, the Company shall indemnify
and hold each of you harmless against any loss, claim or damage arising from or
as a result of such default by the Company.
(b) Subject to the terms and conditions stated herein,
whenever the Company and any of you determines that the Company shall sell Notes
directly to any of you as principal, each such sale of Notes shall be made in
accordance with the terms of this Agreement and a supplemental agreement
relating to such sale. Each such supplemental agreement (which may be either an
oral or written agreement) is herein referred to as a "Terms Agreement". Each
Terms Agreement shall describe the Notes to be purchased by the Purchaser
pursuant thereto and shall specify the aggregate principal amount of such Notes,
the price to be paid to the Company for such Notes, the maturity date of such
Notes, the rate at which interest will be paid on such Notes, the dates on which
interest will be paid on such Notes and the record date with respect to each
such payment of interest, the Closing Date for the purchase of such Notes, the
place of delivery of the Notes
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and payment therefor, the method of payment and any requirements for the
delivery of opinions of counsel, certificates from the Company or its officers
or a letter from the Company's independent public accountants as described in
Section 6(b). Any such Terms Agreement may also specify the period of time
referred to in Section 4(m). Any written Terms Agreement may be in the form
attached hereto as Exhibit B. The Purchaser's commitment to purchase Notes
shall be deemed to have been made on the basis of the representations and
warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser
pursuant to a Terms Agreement shall be made not later than the Closing Date
agreed to 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 Procedures unless otherwise agreed to between the Company and
the Purchaser in such Terms Agreement.
Unless otherwise agreed to between the Company and the
Purchaser in a Terms Agreement, any Note sold to a Purchaser (i) shall be
purchased by such Purchaser at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to an agency sale
of a Note of identical maturity and (ii) may be resold by such Purchaser at
varying prices from time to time or, if set forth in the applicable Terms
Agreement and Pricing Supplement, at a fixed public offering price. In
connection with any resale of Notes purchased, a Purchaser may use a selling or
dealer group and may reallow to any broker or dealer any portion of the discount
or commission payable pursuant hereto.
3. OFFERING AND SALE OF NOTES. 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 agrees with you that:
(a) Prior to the termination of the offering of the Notes
(including by way of resale by a Purchaser of Notes), the Company will
not file any amendment of the Registration Statement or supplement to
the Prospectus (except for (i) periodic or current reports filed under
the Exchange Act, (ii )a supplement relating to any offering of Notes
providing solely for the specification of or a change in the maturity
dates, interest rates, issuance prices or other similar terms of any
Notes or (iii) a supplement relating to an offering of Securities other
than the Notes) unless the Company has furnished each of you a copy for
your review prior to filing and given each of you a reasonable
opportunity to comment on any such proposed amendment or supplement.
Subject to the foregoing sentence, the Company
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will cause each supplement to the Prospectus to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to
you of such filing. The Company will promptly advise each of you (i)
when the Prospectus, and any supplement thereto, shall have been filed
with the Commission pursuant to Rule 424(b), (ii) when, prior to
termination of any offering of Notes, any amendment of the
Registration Statement shall have been filed or become effective,
(iii) of any request by the Commission for any amendment of the
Registration Statement 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 of any notification with respect
to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result
of which 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, 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 thereunder, the Company promptly will (i)
notify each of you to suspend solicitation of offers to purchase Notes
(and, if so notified by the Company, each of you shall forthwith
suspend such solicitation and cease using the Prospectus as then
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 effect
such compliance and (iii) supply any supplemented Prospectus to each
of you in such quantities as you may reasonably request. If such
amendment or supplement, and any documents, certificates and opinions
furnished to each of you pursuant to paragraph (g) of this Section 4
in connection with the preparation or filing of such amendment or
supplement are satisfactory in all respects to you, you 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
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amendment is required, resume your obligation to solicit offers to
purchase Notes hereunder.
(c) The Company, during the period when a prospectus relating to
the Notes is required to be delivered under the Act, will file
promptly all documents required to be filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and
will furnish to each of you copies of such documents. In addition, on
or prior to the date on which the Company makes any announcement to
the general public concerning earnings or concerning any other event
which is required to be described, or which the Company proposes to
describe, in a document filed pursuant to the Exchange Act, the
Company will furnish to each of you the information contained or to be
contained in such announcement. The Company will notify each of you as
soon as practicable of (i) any decrease in the rating of the Notes or
any other debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act) or (ii) any notice given of any intended or
potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible
change, as soon as the Company learns of any such decrease or notice.
(d) As soon as practicable, the Company will make generally
available to its security holders and to each of you an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(e) The Company will furnish to each of you and your counsel,
without charge, copies of the Registration Statement (including
exhibits thereto) and, so long as delivery of a prospectus may be
required by the Act, as many copies of the Prospectus and any
supplement thereto as you may reasonably request.
(f) The Company will arrange for the qualification of the Notes
for sale under the laws of such jurisdictions as any of you may
designate, will maintain such qualifications in effect so long as
required for the distribution of the Notes (provided that the Company
shall not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in
any state), and will arrange for the determination of the legality of
the Notes for purchase by institutional investors.
(g) The Company shall furnish to each of you such information,
documents, certificates of officers of the
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Company and opinions of counsel for the Company relating to the
business, operations and affairs of the Company, the Registration
Statement, the Prospectus, and any amendments thereof or supplements
thereto, the Indenture, the Notes, this Agreement, the Procedures and
the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to
time and at any time prior to the termination of this Agreement
reasonably request.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its
obligations under this Agreement and any Terms Agreement, including
the fees and disbursements of its accountants and counsel, the cost of
printing or other production and delivery of the Registration
Statement, the Prospectus, all amendments thereof and supplements
thereto, the Indenture, this Agreement, any Terms Agreement and all
other documents relating to the offering, the cost of preparing,
printing, packaging and delivering the Notes, the fees and
disbursements, including fees of counsel, incurred in compliance with
Section 4(f), the fees and disbursements of the Trustee and the fees
of any agency that rates the Notes, (ii) reimburse each of you as
requested for all out-of-pocket expenses (including without limitation
advertising expenses), if any, incurred by you in connection with this
Agreement and (iii) pay the fees and expenses of your counsel incurred
in connection with this Agreement and incurred from time to time in
connection with the transactions contemplated hereby.
(i) Each acceptance by the Company of an offer to purchase Notes
will be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the
time of such acceptance, as though made at and as of such time, and a
covenant that such representations and warranties will be true and
correct at the time of delivery to the purchaser of the Notes relating
to such acceptance, as though made at and as of such time (it being
understood that for purposes of the foregoing affirmation and covenant
such representations and warranties shall relate to the Registration
Statement and Prospectus as amended or supplemented at each such
time). Each such acceptance by the Company of an offer for the
purchase of Notes shall be deemed to constitute an additional
representation, warranty and agreement by the Company that, as of the
settlement date for the sale of such Notes, after giving effect to the
issuance of such Notes, of any other Notes to be issued on or prior to
such settlement date and of any other Securities to be issued and sold
by the Company on or prior to such settlement date, the aggregate
amount of Securities (including any Notes) which have been issued and
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sold by the Company will not exceed the amount of Securities
registered pursuant to the Registration Statement. The Company will
inform you promptly upon your request of the aggregate amount of
Securities registered under the Registration Statement which remain
unsold.
(j) Each time that the Registration Statement or the Prospectus
is amended or supplemented (other than by an amendment or supplement
relating to any offering of Securities other than the Notes or
providing solely for the specification of or a change in the maturity
dates, the interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto), the Company will deliver or cause
to be delivered promptly to each of you a certificate of the Company,
signed by the Chairman of the Board, the President, or any Vice
President and the principal financial or accounting officer of the
Company, dated the date of the effectiveness of such amendment or the
date of the filing of such supplement, in form reasonably satisfactory
to you, of the same tenor as the certificate referred to in Section
5(d) but modified to relate to the last day of the fiscal quarter for
which financial statements of the Company 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.
(k) Each time that the Registration Statement or the Prospectus
is amended or supplemented (other than by an amendment or supplement
(i) relating to any offering of Securities other than the Notes or
(ii) providing solely for the specification of or a change in the
maturity dates, the interest rates, the issuance prices or other
similar terms of any Notes sold pursuant hereto), the Company shall
furnish or cause to be furnished promptly to each of you a written
opinion of counsel of the Company satisfactory to each of you, dated
the date of the effectiveness of such amendment or the date of the
filing of such supplement, in form satisfactory to each of you, of the
same tenor as the opinion 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 or, in lieu of such opinion, counsel last
furnishing such an opinion to you may furnish each of you with a
letter to the effect that you may rely on such last opinion to the
same extent as though it were dated the date of such letter
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).
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(l) Each time that the Registration Statement or the Prospectus
is amended or supplemented to include or incorporate amended or
supplemental financial information, the Company shall cause its
independent public accountants promptly to furnish each of you a
letter, dated the date of the effectiveness of such amendment or the
date of the filing of such supplement, in form satisfactory to each of
you, of the same tenor as the letter referred to in Section 5(e) 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, HOWEVER, 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, the Company's independent
public accountants may limit the scope of such letter, which shall be
satisfactory in form to each of you, to the unaudited financial
statements, the related "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and any other
information of an accounting, financial or statistical nature included
in such amendment or supplement, unless, in the reasonable judgment of
any of you, such letter should cover other information or changes in
specified financial statement line items.
(m) During the period, if any, specified (whether orally or in
writing) in any Terms Agreement, the Company shall not, without the
prior consent of the Purchaser thereunder, offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, or announce the
offering of, any debt securities issued or guaranteed by the Company
substantially similar to the Securities sold pursuant to such Terms
Agreement.
5. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS. The
obligations of each 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 contained herein as of the Execution Time, on the Effective Date, when
any supplement to the Prospectus is filed with the Commission and as of each
Closing Date, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no
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proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to each Agent the opinion of
Jones, Day, Reavis & Pogue, counsel for the Company, dated the
Execution Time, in substantially the form attached hereto as Schedule
II, and the opinion of the General Counsel of the Company, in
substantially the form attached hereto as Schedule II.
In rendering such opinions, Jones, Day, Reavis and Pogue and the
General Counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the States of Delaware and Ohio
or the United States, to the extent deemed proper and specified in
such opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to counsel for the
Agent and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and public
officials. References to the Prospectus in this paragraph (b) include
any supplements thereto at the date such opinion is rendered.
(c) Each Agent shall have received from Cravath, Swaine & Moore,
counsel for the Agents, such opinion or opinions, dated the date
hereof, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the Agents may
reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to each Agent a certificate
of the Company, signed by the Chairman of the Board, the President or
any Vice President and the principal financial or accounting officer
of the Company, dated the Execution Time, to the effect that to the
best of their knowledge based upon reasonable investigation:
(i) the representations and warranties of the Company 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 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 the Agents to
solicit offers to purchase the Notes;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no
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13
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse change in the condition
(financial or other), earnings, business or properties of the
Company and its consolidated subsidiaries taken 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 (exclusive of any supplement thereto).
(e) At the Execution Time, Price Waterhouse LLP shall have
furnished to each Agent a letter or letters (which may refer to
letters previously delivered to the Agents), dated as of the Execution
Time, in form and substance satisfactory to the Agents, 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 financial statements,
financial statement schedules and pro forma financial statements,
if any, included or incorporated in the Registration Statement
and the Prospectus and reported on by them comply in 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 financial
statements made available by the Company and its subsidiaries; their
performance of the procedures specified by the American Institute of
Certified Public Accountants for the review of interim financial
information as described in SAS No. 71, Interim Financial Information;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders and directors (including committees) of
the Company and the Subsidiaries; and inquiries of certain officials
of the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to the date of the most recent
<PAGE> 14
14
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 in form in all material respects
with applicable accounting requirements and with the
published rules and regulations of the Commission with
respect to financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange Act; and
said unaudited financial statements are not in conformity
with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited
financial statements included or incorporated in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to the date
of the most recent financial statements (other than any
capsule information), audited or unaudited, included or
incorporated in the Registration Statement and the
Prospectus, there were any changes, at a specified date not
more than five business days prior to the date of the
letter, in the long-term debt of the Company and its
subsidiaries or common or preferred stock of the Company or
decreases in the consolidated net current assets or
stockholders' equity of the Company 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
net sales or income before income taxes and extraordinary
charge or in total or per share amounts of net income of the
Company and its subsidiaries, except in all instances for
changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said
explanation is not deemed necessary by the Agents; or
(3) the amounts included in any unaudited "capsule"
information included in the Registration
<PAGE> 15
15
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 (which is limited
to accounting, financial or statistical information derived from
the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the
Prospectus and in Exhibit 12 to the Registration Statement,
including the information included or incorporated in Items 1, 2,
6 and 7 of 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 Quarterly Reports on Form 10-Q,
incorporated in the Registration Statement and the Prospectus,
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation;
and
(iv) if unaudited 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 and the acquired company 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.
In addition, Ernst & Young LLP shall have furnished to the Agents a
letter or letters, dated as of the Execution Time, to the effect set forth
in subsection 5(e)(i) above.
<PAGE> 16
16
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Prior to the Execution Time, the Company shall have furnished to
each Agent such further information, documents, certificates and opinions
of counsel as the Agents may reasonably request.
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 Agents and counsel for the Agents, this Agreement and all
obligations of any Agent hereunder may be canceled at any time by the Agents.
Notice of such cancelation shall be given to the Company in writing or by
telephone or telecopier confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the Agents, at
Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the date hereof.
6. CONDITIONS TO THE OBLIGATIONS OF A PURCHASER. The obligations of a
Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company herein as of the date
of the related Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company 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 shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) To the extent agreed to between the Company and the Purchaser in a
Terms Agreement, the Purchaser shall have received, appropriately updated,
(i) a certificate of the Company, dated as of the Closing Date, to the
effect set forth in Section 5(d) (except that references to the Prospectus
shall be to the Prospectus as supplemented as of the date of such Terms
Agreement), (ii) the opinion of Jones, Day, Reavis & Pogue, counsel for the
Company, dated as of the Closing Date, to the effect set forth in Section
5(b), (iii) the opinion of Cravath, Swaine & Moore, counsel for the
Purchaser, dated as of the Closing Date, to the effect set forth in Section
5(c), and (iv) letter of Price Waterhouse LLP, independent accountants for
the Compa-
<PAGE> 17
17
ny, dated as of the Closing Date, to the effect set forth in Section 5(e).
(c) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the
Purchaser may reasonably request.
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
and the applicable Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the respective Closing Date
by the Purchaser. Notice of such cancelation shall be given to the Company in
writing or by telephone or telecopier confirmed in writing.
7. RIGHT OF PERSON WHO AGREED TO PURCHASE TO REFUSE TO PURCHASE. (a)
The Company agrees that any person who has agreed to purchase and pay for any
Note pursuant to a solicitation by any of the Agents shall have the right to
refuse to purchase such Note if, at the Closing Date therefor, any condition
set forth in Section 5 or 6, as applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed to purchase and
pay for any Note pursuant to a solicitation by any of the Agents shall have the
right to refuse to purchase such Note if, subsequent to the agreement to
purchase such Note, any change, condition or development specified in any of
Sections 9(b)(i) through (v) shall have occurred (with the judgment of the Agent
which presented the offer to purchase such Note being substituted for any
judgment of a Purchaser required therein) the effect of which is, in the
judgment of the Agent which presented the offer to purchase such Note, so
material and adverse as to make it impractical or inadvisable to proceed with
the sale and delivery of such Note (it being understood that under no
circumstance shall any such Agent have any duty or obligation to the Company or
to any such person to exercise the judgment permitted to be exercised under this
Section 7(b) and Section 9(b)).
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you, the directors, officers, employees and
agents of each of you and each person who controls each of you 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 you, they or any of
you or 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
<PAGE> 18
18
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 Securities 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,
in the light of the circumstances when made, 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 the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by any of you specifically for inclusion therein and, PROVIDED,
FURTHER, that the foregoing indemnity agreement with respect to any preliminary
final Prospectus shall not inure to the benefit of any Underwriter, the
directors, partners, officers, employees and agents of each Underwriter and each
person who controls such Underwriter within the meaning of either the Act or the
Exchange Act from whom the person asserting any such loss, claim, damage,
liability or action purchased securities if a copy of the final Prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of Securities to such person, and if the final Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or action. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each of you agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Registration Statement
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, to the same extent as the foregoing indemnity from the Company
to you, but only with reference to written information relating to such of you
furnished to the Company by such of you specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which you may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
<PAGE> 19
19
page, and under the heading "Plan of Distribution", of the Prospectus Supplement
constitute the only information furnished in writing by any of you 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 failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); PROVIDED, HOWEVER, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), which in the case of either (i) or
(ii) below shall be reasonably satisfactory to the indemnified party, and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with an actual
conflict of interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party
and representation of both parties by the same counsel would be, in the
reasonable judgment of the indemnified party based upon the advice of counsel,
inadvisable due to actual or potential differing interests between them, (iii)
the indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party; PROVIDED, HOWEVER that in no event shall the
indemnifying party be liable for legal fees or expenses of more than one primary
firm representing the indemnified parties or more than one local counsel in each
state or jurisdiction in whch an action in which
<PAGE> 20
20
indemnification is available has been brought. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and each of you agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
you may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and by each of you from the offering of the
Notes from which such Losses arise; PROVIDED, HOWEVER, that in no case shall any
of you be responsible for any amount in excess of the commissions received by
such of you in connection with the sale of Notes from which such Losses arise
(or, in the case of Notes sold pursuant to a Terms Agreement, the aggregate
commissions that would have been received by such of you if such commissions had
been payable). If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and each of you shall contribute in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of each of you in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) of the Notes from which such Losses arise, and benefits received by
each of you shall be deemed to be equal to the total commissions received by
such of you in connection with the sale of Notes from which such Losses arise
(or, in the case of Notes sold pursuant to a Terms Agreement, the aggregate
commissions that would have been received by such of you if such commissions had
been payable). Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or any of you. The Company and each of you agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
<PAGE> 21
21
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls any of you within the meaning of the
Act or the Exchange Act and each director, officer, employee and agent of any of
you shall have the same rights to contribution as you and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. TERMINATION. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated
either by the Company as to any Agent or by any of you insofar as this Agreement
relates to any Agent, by giving written notice of such termination to such Agent
or the Company, as the case may be. 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. 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(h), Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for any Note to be purchased thereunder, if prior to
such time (i) there shall have occurred, 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 and its consolidated
subsidiaries taken as a whole the effect of which is, in the judgment of the
Purchaser, so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of such Note, (ii) there shall have been,
subsequent to the agreement to purchase such Note, any decrease in the rating of
any of the Company's debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such rating or of
a possible change in any such rating that does not indicate the direction of the
possible change, (iii) trading in the Company's Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (iv) a
banking moratorium shall have been declared by either Federal or New York State
authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect
<PAGE> 22
22
of which on financial markets is such as to make it, in the judgment of the
Purchaser, impracticable or inadvisable to proceed with the offering or delivery
of such Notes as contemplated by the Prospectus (exclusive of any supplement
thereto).
10. SURVIVAL OF CERTAIN PROVISIONS. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you 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 you or the Company or any of the directors, officers, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Notes. The provisions of Sections 4(h) and 8
hereof shall survive the termination or cancelation of this Agreement. The
provisions of this Agreement (including without limitation Section 7 hereof)
applicable to any purchase of a Note for which an agreement to purchase exists
prior to the termination hereof shall survive any termination of this Agreement.
If at the time of termination of this Agreement any Purchaser shall own any
Notes with the intention of selling them, the provisions of Section 4 shall
remain in effect until such Notes are sold by the Purchaser.
11. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to any of you, will be mailed, delivered
or telecopied and confirmed to such of you, at the address specified in Schedule
I hereto; or, if sent to the Company, will be mailed, delivered or telecopied
and confirmed to it at Suite 36-5000, 200 Public Square, Cleveland, Ohio
44114-2304, attention: Corporate Secretary.
12. AMENDMENTS. This Agreement may be amended or supplemented if, but
only if, such amendment or supplement is in writing and is signed by the Company
and each Agent; PROVIDED that the Company may from time to time, on seven days
prior written notice to the Agents but without the consent of any Agent, amend
this Agreement to add as a party hereto one or more additional firms registered
under the Exchange Act, whereupon each such firm shall become an Agent hereunder
on the same terms and conditions as the other Agents that are parties hereto.
The Agents shall sign any amendment or supplement giving effect to the addition
of any such firm as an Agent under this Agreement.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors, the directors,
officers, employees, agents and controlling persons referred to in Section 8
hereof and, to the extent provided in Section 7, any person who has agreed to
purchase Notes, and no other person will have any right or obligation hereunder.
<PAGE> 23
23
14. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
M. A. Hanna Company
By: /s/ Michael S. Duffey
---------------------------------------
Vice President, Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
Salomon Brothers Inc
By: /s/ Martha D. Bailey
---------------------
Vice President
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: /s/ Scott G. Primrose
---------------------------------------------
Authorized Signature
[CO-AGENTS]
<PAGE> 24
SCHEDULE I
Commissions:
- ------------
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold on an agency
basis by such Agent:
<TABLE>
<CAPTION>
Maturity Commission Rate
-------- ---------------
<S> <C> <C>
9 months to less than 12 months .125%
12 months to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 8 years .600%
8 years to less than 9 years .600%
9 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .700%
20 years to less than 30 years .750%
30 years and beyond to be negotiated
</TABLE>
<PAGE> 25
25
Unless otherwise specified in the applicable Terms Agreement, the
discount or commission payable to a Purchaser shall be determined on the basis
of the commission schedule set forth above.
Address For Notice to you:
Notices to Salomon Brothers Inc shall be directed to it at Seven World
Trade Center, New York, New York 10048, Attention of the Medium-Term Note
Department.
Notices to
shall be directed to it at ,
Attention of .
<PAGE> 26
EXHIBIT B
M. A. Hanna Company
Medium Term Notes[, Series ]
Due From [More Than] Nine Months
to Years from Date of Issue
TERMS AGREEMENT
, 199
Attention:
Subject in all respects to the terms and conditions of the
Selling Agency Agreement (the "Agreement") dated , 1996, between
Salomon Brothers Inc, , and you, the undersigned agrees to
purchase the following Notes of Corporation:
[Add additional terms as may be needed to identify Notes.]
[Specified Currency]:
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Discount or Commission: % of Principal Amount
Purchase Price: % of Principal Amount [plus
accrued interest from
, 199 ]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
<PAGE> 27
27
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(m) of the Agreement:
[Purchaser]
By:____________________
Accepted:
M. A. Hanna Company
By:
-----------------------
Title:
<PAGE> 28
28
[Form of Reverse Inquiry Letter]
[Trade Date]
[Dealer]
[Address]
[Address]
Re: $__,000,000 Medium-Term Notes
Pricing Supplement Number:________
Settlement Date:__________________
(See attached Term Sheet)
Dear [Dealer]:
Reference is made to the Selling Agency Agreement dated _______________, 199__
(the "Agreement") pertaining to up to $ ,000,000 aggregate principal amount of
Medium-Term Notes (the "Notes") to be offered from time to time by M. A. Hanna
Company (the "Company"). The provisions of the Agreement (a copy of which has
been previously provided to you) are hereby incorporated by reference and each
of the representations and warranties set forth therein shall be deemed to be
made to you as of the date hereof. Subject to the terms set forth therein, the
Company hereby appoints you as an Agent (as such term is defined in the
Agreement) of the Company for purposes of soliciting one offer to purchase Notes
from the Company containng the terms as set forth in the above referenced
Pricing Supplement. This appointment is effective as to an extends only to the
one transaction which you are presenting to the Company (see attached Term
Sheet) and the Agreement shall automatically be terminated as to you upon the
earlier to occur of (i) payment made in full to the Company for the Notes sold
pursuant to the offer presented or (ii) the Company or you determine not to
proceed with the transaction. Upon such termination of the Agreement by the
Company, neither you nor the Company shall have any liability to the other
except as provided in those sections of the Agreement referenced in Section___
thereof. You agree to be bound by, and comply with, all of the provisions of the
Agreement applicable to the Agents thereunder.
*[As a condition precedent to your obligation to consummate the transaction
referred to above, you shall receive the following: (i) the opinions of counsel,
dated __________ [recent date or most recent periodic update [pursuant to
Sections ___ and ____ of the Agreement; (ii) an Officer's Certificate dated
_______ [recent date], pursuant to Section ___ of the Agreement; (iii) a
<PAGE> 29
29
letter from [Accountant] dated ________ [most recent date or most recent
periodic update] delivered pursuant to Section ___ of the Agreement; and (iv) a
copy of the resolutions adopted by the Company with respect to the Form of Note
evidencing the securities described in the above referenced Pricing Supplement,
certified by an appropriate officer of the Company.]
This letter shall be governed by and construed in accordance with the laws of
the State of New York.
If the foregoing is in accordance with your understanding, please sign and
return to us two counterparts hereof, whereupon this letter shall constitute a
binding agreement between the Company and you in accordance with its terms.
Very truly yours,
By:
-------------------------
Name:
Title:
Agreed and Accepted as of the date hereof:
[Dealer]
By:------------------
Name:
Title:
*This language is to be negotiated between the Issuer and the Reverse Inquiry
Agent at the time of the trade.
<PAGE> 1
EXHIBIT 8.1
December 4, 1996
M.A. Hanna Company
Suite 36-5000
200 Public Square
Cleveland, Ohio 44114
Re: M.A. Hanna Company Medium-Term Notes
Ladies and Gentlemen:
We have acted as special tax counsel to M.A. Hanna Company (the
"Company") in connection with its medium-term notes (the "Notes"), which may be
issued in one or more series and may be offered and sold in the United States
from time to time, as set forth in the Company's Prospectus (the "Prospectus"),
dated November 8, 1996, and the Company's Prospectus Supplement (the "Prospectus
Supplement"), dated December 4, 1996.
This letter will be deemed accepted by you in the form hereof upon
the filing of the Prospectus Supplement with the Securities and Exchange
Commission. Your acceptance of this letter in the form hereof constitutes your
acceptance of, and acquiescence in, the assumptions, exclusions, limitations and
rules of construction set forth below.
1. AUTHORITIES EXAMINED
In rendering the opinion set forth below, we have examined and
relied upon provisions of the Internal Revenue Code of 1986, as amended
(hereinafter "I.R.C." or the "Code"); final, temporary and proposed regulations
promulgated under the Code by the U.S. Department of the Treasury;
administrative pronouncements issued by the U.S. Internal Revenue Service;
judicial decisions rendered by U.S. Federal courts of competent jurisdiction;
and such other sources and authorities that we have deemed relevant in reaching
the conclusions expressed herein.
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M.A. Hanna Company
December 4, 1996
Page 2
2. OPINION
Based upon the foregoing, and subject to the assumptions,
exclusions and limitations set forth below, we are of the opinion that the
discussion contained in the section of the Prospectus Supplement entitled
"United States Tax Considerations" accurately reflects the material United
States Federal income tax consequences of the ownership and disposition of the
Notes purchased by an initial Holder (as defined in such section) thereof at the
"issue price" (as defined in such section).
3. ASSUMPTIONS
In rendering the opinion set forth above, we have assumed (and we
have made no independent investigation or inquiry whatsoever to confirm, and we
expressly disclaim any intent, undertaking or obligation to make any such
investigation or inquiry to confirm) that:
3.1. Each document that was required to be executed but was not
executed, or that was otherwise not in final form, on the date on
which we examined such document, will be timely executed and/or
delivered in final form, which final form will not differ in any
material respect from the form in which such document was
examined by us on such date.
3.2. The representations made to us by officers of the Company,
whether orally or in writing, with respect to the subject matter
of the opinion set forth above are true, correct and complete in
all material respects as of the date they were made and at all
times thereafter through and including the date hereof.
3.3. The transactions contemplated by the Prospectus Supplement will
not contravene any obligation to which any party is subject.
3.4. All assumptions made in connection with the delivery of any other
opinion to the addressee hereof or any other person, whether by
ourselves or by any other professional adviser, in connection
with any transaction or subject matter reasonably related to the
subject matter of our opinion set forth above are correct at all
relevant times through and including the later of the date of
such other opinion and the date hereof.
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M.A. Hanna Company
December 4, 1996
Page 3
4. EXCLUSIONS
Anything in the foregoing to the contrary notwithstanding, we
expressly decline to opine upon, and expressly disclaim any intent, undertaking
or obligation to opine upon, and hereby expressly exclude from the scope of the
opinion set forth above, the following matters:
4.1. Any and all matters arising under the laws of any State of the
United States or the District of Columbia or any political
subdivision thereof.
4.2. Any and all matters arising under the laws of any country other
than the United States. For this purpose, the dependencies,
protectorates, territories and possessions of the United States
shall be deemed to be countries other than the United States.
4.3. Any and all matters with respect to any tax other than the U.S.
Federal income tax.
4.4. The effect upon the opinion set forth above of any provision of
law that may affect any particular person differently from any
other person, by reason of such first-mentioned person's special
status, characteristics or situation.
5. LIMITATIONS
5.1. The opinion set forth above is furnished only as to facts and
circumstances existing at the date hereof and actually known or
represented to us on such date. If any such facts and
circumstances should change, or if a determination is made
hereafter that any such facts or circumstances were untrue or
inaccurate on such date, any such change or determination could
adversely affect or render inapplicable the opinion set forth
above. We expressly disclaim any intent, undertaking or
obligation to notify the addressee hereof or any other person of
any such change or determination of which we may subsequently
become aware or any possible effects thereof on the opinion set
forth above.
5.2. The opinion set forth above is furnished in express reliance on
the assumptions set forth in Section 3 hereof. If a determination
is made hereafter that any such assumption was untrue or
inaccurate as of
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M.A. Hanna Company
December 4, 1996
Page 4
the date hereof, any such determination could adversely affect or
render inapplicable the opinion set forth above. We expressly
disclaim any intent, undertaking or obligation to notify the
addressee hereof or any other person of any such determination of
which we may subsequently become aware or of any possible effects
thereof on the opinion set forth above.
5.3. Each of the sources and authorities described in Section hereof
is subject to repeal, revocation or modification without notice,
possibly with retroactive effect; any such repeal, revocation or
modification could adversely affect or render inapplicable the
opinion set forth above. The opinion set forth above applies only
to the subject matter thereof at the date hereof, and we
expressly disclaim any intent, undertaking or obligation to
notify the addressee hereof or any other person of any such
repeal, revocation or modification or any possible effects
thereof on the opinion set forth above.
5.4. The contents of Section 2 hereof, subject to and as modified by
the remaining contents hereof, constitute the entirety of the
opinion and advice furnished by us to the addressee hereof with
respect to the subject matter hereof. This original and any
simultaneously executed counterparts hereof together constitute
one and the same original writing, which writing supersedes any
and all (a) prior drafts or versions hereof and (b) prior or
contemporaneous statements, conclusions, representations,
writings, understandings, opinions, discussions and other
communications in any form between us and the addressee hereof
relating to the subject matter hereof. In proving the existence
or contents of this letter, it shall not be necessary to produce,
refer to or account for (x) any particular executed original
counterpart hereof in preference to any other such counterpart,
or (y) more than one such counterpart. No oral communication made
after the date hereof shall be deemed or effective to modify the
contents hereof in any manner. No written communication made
after the date hereof shall be deemed or effective to modify the
contents hereof in any manner, except to the extent that any such
modification is explicitly set forth in such subsequent written
communication and contains an express reference to this letter.
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M.A. Hanna Company
December 4, 1996
Page 5
5.5. In rendering the opinion contained in Section 2 hereof, we do not
purport to be experts on laws other than the Federal laws of the
United States.
5.6. The opinion set forth above is furnished solely for the benefit
of the addressee hereof and may not, except as specifically
provided below, be used, relied upon, referred to or quoted by
any other person without our prior specific written consent
thereto. There are no express or implied third-party
beneficiaries of or in the opinion set forth above.
6. RULES OF CONSTRUCTION
In interpreting the provisions of this letter, the following rules
of interpretation and construction shall apply:
6.1. The terms and provisions hereof and the wording used herein shall
in all cases be interpreted and construed in accordance with
their fair meanings and not strictly for or against any person.
6.2. Capitalized terms used herein without definition have the
respective meanings set forth in the Prospectus or Prospectus
Supplement.
6.3. The captions at the headings of each Section of this letter are
provided for convenience of reference only, and are in no way
intended or to be used or applied to describe, interpret,
construe, define or limit the scope, extent, intent, meaning or
operation of any term or provision hereof.
6.4. Unless the context clearly requires otherwise, each reference to,
and each use of, any of the masculine, feminine or neuter genders
herein shall be deemed to constitute a reference to, and a use
of, each such gender without distinction.
6.5. Unless the context clearly requires otherwise, each reference to,
and each use of, either the singular or plural number herein
shall be deemed to constitute a reference to, and a use of, each
such number without distinction.
****
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M.A. Hanna Company
December 4, 1996
Page 6
We hereby consent to the furnishing of the opinion as Exhibit 8.1
to Registration Statement No. 333-5763 on Form S-3 filed by the Company to
effect registration of the Notes under the Securities Act of 1933 and to the
reference to us under the caption "United States Tax Considerations" in the
Prospectus Supplement.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
