SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________
FORM 8-K
___________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 2, 1998
___________________
IBP, inc.
A Delaware Commission File IRS Employer Identification
Corporation Number 1-6085 No. 42-0838666
IBP Avenue
Post Office Box 515
Dakota City, NE 68731
Telephone Number (402) 241-2061
___________________
page 1 of 49 pages
ITEM 5. Other Events
In connection with the issuance and sale from time to time by IBP,
inc. (the "Company") of its Medium-Term Notes due nine months or
more from the date of issue (the "Notes") under the Company's
Registration Statement on Form S-3 (Registration No. 33-64459), as
amended (the "Registration Statement"), the Company is filing herewith
the exhibits referenced below in Item 7 and in the annexed Index to
Exhibits.
In addition, on January 23, 1998, the Company announced
financial results for its 1997 fourth quarter and fiscal year ended
December 27, 1997.
Net sales in 1997 totaled $13.3 billion versus $12.5 billion in
1996. Net earnings for the same periods are $117 million and $199
million, respectively. Earnings per share in 1997 declined 40% to $1.26
from $2.10 per share in 1996. Net earnings for the fourth quarter of
1997 totaled $22 million, or $.23 per share, up 19% from the $18
million, or $.19 per share, recorded in 1996.
The Company released the following financial results.
IBP, inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 27, December 28,
1997 1996
ASSETS ------------ ------------
CURRENT ASSETS:
Cash $ 69,022 $ 94,164
Marketable securities 3,120 169,476
Accounts receivable, net 564,125 500,781
Inventories 389,753 299,700
Deferred income tax benefits and
prepaid expenses 57,907 6,464
--------- ---------
TOTAL CURRENT ASSETS 1,083,927 1,110,585
Property, plant and equipment, net 1,017,082 816,206
Goodwill, net 671,557 206,587
Other assets 66,375 41,117
--------- ---------
$2,838,941 $2,174,495
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 192,010 $ -
Accounts payable 345,728 299,785
Other current liabilities 339,080 269,897
--------- ---------
TOTAL CURRENT LIABILITIES 876,818 569,682
Long-term debt and capital lease
obligations 568,281 260,008
Deferred income taxes and other
liabilities 156,773 141,150
STOCKHOLDERS' EQUITY 1,237,069 1,203,655
--------- ---------
$2,838,941 $2,174,495
========= =========
IBP, inc. AND SUBSIDIARIES
SUMMARY OF SELECTED FINANCIAL DATA
(In thousands except per share data)
13 Weeks Ended 52 Weeks Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
1997 1996 1997 1996
---------- ---------- ----------- -----------
Net sales $3,259,150 $3,017,823 $13,258,784 $12,538,753
Cost of products sold 3,144,514 2,962,200 12,815,892 12,095,171
--------- --------- ---------- ----------
Gross profit 114,636 55,623 442,892 443,582
Selling, general and
administrative expense 66,017 27,463 216,176 120,674
--------- --------- ---------- ----------
EARNINGS FROM OPERATIONS 48,619 28,160 226,716 322,908
Interest expense, net 13,500 (193) 38,002 3,373
--------- --------- ---------- ----------
Earnings before income
taxes 35,119 28,353 188,714 319,535
Income tax expense 13,400 10,100 71,700 120,800
--------- --------- ---------- ----------
NET EARNINGS $ 21,719 $ 18,253 $ 117,014 $ 198,735
========= ========= ========== ==========
Earnings per share $ .23 $ .19 $1.26 $2.10
==== ==== ==== ====
Earnings per share -
assuming dilution $ .23 $ .19 $1.25 $2.07
==== ==== ==== ====
Dividends per share $.025 $.025 $.10 $.10
==== ==== === ===
Weighted average common
shares outstanding 92,542 94,639 92,651 94,688
====== ====== ====== ======
Capital expenditures $40,536 $36,511 $133,925 $170,664
====== ====== ======= =======
Depreciation and amortization
expense $30,918 $21,959 $109,930 $82,690
====== ====== ======= ======
ITEM 7. Financial Statements and Exhibits
(c) Exhibits:
The exhibits listed below relate to the Company's Registration
Statement and is filed herewith for incorporation by reference
therein.
Exhibit Number
(Referenced to
Item 601 of
Regulation S-K) Description of Exhibit
1(a) Distribution Agreement, dated December 12, 1997,
between IBP, inc. and the agents listed thereon
related to the Notes
1(b) Remarketing Agreement, dated January 15, 1998,
between IBP, inc. and NationsBanc Montgomery
Securities LLC
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
IBP, inc.
Date: February 2, 1998
---------------------
By:
/s/ Sheila B. Hagen
-----------------------
Sheila B. Hagen
Vice President and General Counsel
INDEX TO EXHIBITS
Exhibit Number Page Number
in Rule
(Referenced to 0-3 (b)
sequential
Item 601 of numbering system
where
Regulation S-K Description of Exhibit Exhibit
can be found
1(a) Distribution Agreement, 7
dated December 12, 1997,
between IBP, inc. and the
agents listed thereon related
to the Notes
1(b) Remarketing Agreement, 34
dated January 15, 1998,
between IBP, inc. and
NationsBanc Montgomery
Securities LLC
EXHIBIT 1(a)
IBP, inc.
$300,000,000
Medium-Term Notes
Due Nine Months or More from Date of Issue
DISTRIBUTION AGREEMENT
December 12, 1997
Donaldson, Lufkin & Jenrette
Securities Corporation
Salomon Brothers Inc
c/o Donaldson, Lufkin & Jenrette
277 Park Avenue
New York, New York 10172
Dear Ladies and Gentlemen:
IBP, inc., a Delaware corporation ("IBP" or the "Company"),
confirms its agreement with each of you (individually, an "Agent" and
collectively, the "Agents") with respect to the issuance and sale from
time to time by the Company of its Medium-Term Notes due nine
months or more from the date of issue (the "Notes") at an aggregate
initial offering price of up to $300,000,000 or the equivalent thereof in
one or more currencies, currency units or composite currencies other
than U.S. dollars ("Foreign Currencies"), subject to reduction as a result
of the sale of other debt securities of the Company after the date hereof
pursuant to the Registration Statement (hereafter defined). The Notes
are to be issued pursuant to an Indenture dated as of January 26, 1996
(the "Indenture") between the Company and The Bank of New York, as
trustee (the "Trustee").
The Notes shall have the applicable interest rates or interest rate
formulae, issue price, redemption and repayment provisions and other
terms set forth in the Prospectus referred to in Section 1(a) (as it may be
amended or supplemented from time to time, including any Pricing
Supplement (hereafter defined)). The Notes will be issued, and the
terms thereof established, from time to time, by the Company, in accor-
dance with the Indenture and the Procedures (hereafter defined) referred
to below. This Agreement shall only apply to sales of the Notes and not
to sales of any other securities or evidences of indebtedness of the
Company and only on the specific terms set forth herein.
On the basis of the representations and warranties herein
contained, but subject to the terms and conditions stated herein and to
the reservation by the Company of the right (A) to sell Notes directly to
investors (other than broker-dealers) in those jurisdictions in which the
Company is so permitted and (B) to accept offers to purchase Notes
from time to time through one or more additional agents or dealers,
acting as either principal or agent, on substantially the same terms as
those applicable to sales of Notes to or through the Agents pursuant to
this Agreement, the Company hereby (i) appoints the Agents as the
agents of the Company for the purpose of soliciting and receiving offers
to purchase Notes from the Company by others pursuant to Section 2(a)
hereof and (ii) agrees that, except as otherwise contemplated herein,
whenever it determines to sell Notes directly to any Agent as principal, it
will enter into a separate agreement (each, a "Purchase Agreement"),
substantially in the form of Exhibit C hereto, relating to such sale in
accordance with Section 2(e) hereof.
1. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
The Company represents and warrants to each Agent as of the date
hereof, as of the Closing Date (hereafter defined) as of the times referred
to in Sections 6(a) and 6(b) hereof (the Closing Date and each such time
being hereinafter sometimes referred to as a "Representation Date"), as
follows:
(a) A registration statement on Form S-3 (No. 33-
64459), including a prospectus relating to certain senior unsecured
debt securities of the Company, including the Notes (the "Debt
Securities"), for the registration of such securities under the Secu-
rities Act of 1933, as amended (the "Securities Act"), has (i) been
prepared by the Company in material conformity with the require-
ments of the Securities Act and the rules and regulations (the
"Rules and Regulations") of the United States Securities and Ex-
change Commission (the "Commission") thereunder, (ii) been
filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act; and the Indenture has
been qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). Copies of such registration statement
and any amendments thereto have been delivered by the Company
to the Agents. As used in this Agreement, "Effective Date" means
the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was de-
clared effective by the Commission; "Registration Statement"
means such registration statement as amended to the date of this
Agreement including all documents incorporated by reference or
deemed to be incorporated by reference therein and the exhibits
thereto; "Basic Prospectus" means the prospectus included in the
Registration Statement; "Preliminary Prospectus" means any pre-
liminary form of the Prospectus (hereafter defined) specifically
relating to the Notes, in the form first filed with, or transmitted for
filing to, the Commission pursuant to Rule 424 under the Secu-
rities Act; "Prospectus Supplement" means any prospectus supple-
ment specifically relating to the Notes in the form first filed with,
or transmitted for filing to, the Commission pursuant to Rule 424
under the Securities Act; "Pricing Supplement" means any pricing
supplement specifically relating to the terms of a particular issue
of the Notes in the form first filed with, or transmitted for filing
to, the Commission pursuant to Rule 424(b) under the Securities
Act; "Prospectus" means the Basic Prospectus together with the
Prospectus Supplement and the Pricing Supplement except that if
such Basic Prospectus is amended or supplemented on or prior to
the date on which the Prospectus Supplement was first filed pursu-
ant to Rule 424, the term "Prospectus" shall refer to the Basic
Prospectus as so amended or supplemented and as supplemented
by the Prospectus Supplement and the Pricing Supplement; "Basic
Prospectus," "Prospectus," "Preliminary Prospectus," "Prospectus
Supplement" and "Pricing Supplement" shall include in each case
the documents, if any, filed by the Company with the Commission
pursuant to the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference
therein; and "supplement" and "amendment" shall be deemed to
refer to and include any documents incorporated by reference
pursuant to Item 12 of Form S-3 under the Securities Act that are
filed subsequent to the date of the Basic Prospectus by the Com-
pany with the Commission pursuant to the Exchange Act. Any
reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company filed with
the Commission pursuant to Section 13(a) or 15(d) of the Ex-
change Act after the Effective Date that is incorporated by refer-
ence in the Registration Statement.
(b) The Registration Statement conforms in all material
respects, and the Prospectus and any further amendments or sup-
plements to the Registration Statement or the Prospectus will,
when they become effective or are filed with the Commission, as
the case may be, conform in all material respects, to the require-
ments of the Securities Act and the Rules and Regulations there-
under and do not and will not, as of the applicable Effective Date
(as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances in which they were
made) not misleading; provided, however, that no representation
or warranty is made as to (i) that part of the Registration State-
ment which shall constitute the Statement of Eligibility on Form
T-1 under the Trust Indenture Act of the Trustee, and (ii) informa-
tion contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written infor-
mation furnished to the Company by or on behalf of any Agent
specifically for use in the Registration Statement or the Prospec-
tus.
(c) The Indenture conforms in all material respects to the
requirements of the Trust Indenture Act and the applicable rules
and regulations thereunder.
(d) The documents incorporated or deemed to be incor-
porated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be,
conformed in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and, when read to-
gether with the Prospectus on the filing date of the Prospectus and
any amendment or supplement thereto, none of such documents
contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus, when
such documents become effective or are filed with the Commis-
sion, as the case may be, will conform in all material respects to
the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission there-
under and, when read together with the Prospectus on the dates
such documents become effective or are filed with the Commis-
sion, as the case may be, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
(e) The Company and each of its subsidiaries have been
duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification except where the
failure to be so qualified and in good standing would not be
reasonably expected to have a material adverse effect on the
consolidated financial condition, stockholders' equity, results of
operations or business of the Company and its subsidiaries, taken
as a whole (a "Material Adverse Effect"), and where so qualified
have all corporate power and authority necessary to own, lease or
operate their respective properties and to conduct the businesses in
which they are engaged as described in the Prospectus.
(f) The Notes have been duly and validly authorized by
the Company and, when duly executed, issued and delivered by
the Company, and authenticated by the Trustee pursuant to the
provisions of the Indenture, against payment therefor as provided
in this Agreement and any applicable Purchase Agreement, will
constitute valid and legally binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except as the enforce-
ability thereof may be subject to (i) bankruptcy, insolvency, reor-
ganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and except further
as enforcement thereof may be limited by (a) requirements that a
claim or judgment with respect to any Notes denominated in a
Foreign Currency be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable
law or (b) the ability of governmental authorities to limit, delay or
prohibit the making of payments outside the United States; and the
Notes, when issued and delivered, will conform in all material re-
spects to the description thereof contained in the Prospectus.
(g) The Indenture has been duly authorized, executed
and delivered by the Company (assuming due authorization,
execution and delivery by the Trustee) and constitutes a valid and
legally binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the enforce-
ability thereof may be subject to (i) bankruptcy, insolvency, reor-
ganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and except further
as enforcement thereof may be limited by (a) requirements that a
claim or judgment with respect to any Notes denominated in a
Foreign Currency be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable
law or (b) the ability of governmental authorities to limit, delay or
prohibit the making of payments outside the United States; and the
Indenture conforms in all material respects to the description
thereof contained in the Prospectus.
(h) This Agreement and any applicable Purchase
Agreement each has been duly authorized, executed and delivered
by the Company.
(i) The execution, delivery and performance of this
Agreement, any applicable Purchase Agreement and the Indenture
by the Company, and the consummation of the transactions con-
templated hereby and thereby, and the issuance and delivery and
performance of the Notes will not conflict with or result in a
breach or violation of any of the terms or provisions of, or consti-
tute a default under any indenture, lien, charge or encumbrance
upon any property or mortgage, deed of trust, loan agreement, or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject except for such conflicts, breaches, vio-
lations or defaults which would not have a Material Adverse
Effect; nor will such action result in any violation of the provi-
sions of the charter or by-laws of the Company or any of its sub-
sidiaries; nor will such action result in any violation of the
provisions of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their material proper-
ties or assets except for violations which would not have a
Material Adverse Effect; and except for the registration of the
Notes under the Securities Act, the qualification of the Indenture
under the Trust Indenture Act, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Notes by the
Agents, no consent, approval, authorization or order of, or filing,
registration or qualification of or with, any such court or
governmental agency or body is required for the execution, de-
livery and performance of this Agreement or the Indenture by the
Company and the consummation by the Company of the transac-
tions contemplated hereby and thereby.
(j) Except as described or incorporated by reference in
the Registration Statement or the Prospectus, there are no agree-
ments or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the secu-
rities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(k) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest financial statements included
or incorporated by reference in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree in any
such case, which would have a Material Adverse Effect, otherwise
than as set forth or contemplated in the Prospectus; and, since
such date, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospec-
tive material adverse change, in or affecting the general affairs,
management, financial condition, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus.
(l) Price Waterhouse L.L.P., which has certified certain
financial statements of the Company, which statements appear in
the Prospectus or are incorporated by reference therein, and Coo-
pers and Lybrand L.L.P., which has certified certain financial
statements of the Company, which statements appear in the
Prospectus or are incorporated by reference therein, and delivered
the initial letter referred to in Section 5(f) hereof, are each inde-
pendent public accountants as required by the Securities Act and
the Rules and Regulations.
(m) The financial statements (including the related notes
and supporting schedules) filed as part of the Registration
Statement or included or incorporated by reference in the
Prospectus present fairly in all material respects the financial
condition and results of operations of the Company and its
consolidated subsidiaries at the dates and for the periods indicated,
and have been prepared in conformity with United States general-
ly accepted accounting principles applied on a consistent basis
throughout the periods involved, except as otherwise expressly set
forth therein.
(n) Except as described in the Registration Statement,
Prospectus or in documents incorporated therein by reference,
there are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any
material property or assets of the Company or any of its subsidiar-
ies is the subject which is required to be disclosed in the Regis-
tration Statement, Prospectus or in documents incorporated therein
by reference or which, if determined adversely to the Company or
any of its subsidiaries, would reasonably be expected to have a
Material Adverse Effect; and to the Company's knowledge, no
such proceedings are threatened by governmental authorities or by
others.
(o) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described in the Prospectus
or filed as exhibits to the Registration Statement or incorporated
therein by reference under the Rules and Regulations.
(p) Neither the Company nor any of its subsidiaries is (i)
in violation of its charter or by-laws, or (ii) in default in any
material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other agreement to which the Company or any of its
subsidiaries is a party or by which it or any of them is or may be
bound or to which any of the properties or assets of the Company
or any of its subsidiaries is subject, except for such default which
would not have a Material Adverse Effect or (iii) in violation in
any material respect of any law, ordinance, governmental rule,
regulation or court decree to which the Company or any of its sub-
sidiaries or its or any of their property or assets may be subject or
has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary
to the ownership of its or their property or to the conduct of its or
their business, except for such violation or failure which would
not have a Material Adverse Effect.
(q) Neither the Company nor, to the Company's
knowledge, any of its subsidiaries, any director, officer, agent,
employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; or violated or is in
violation in any material respect of any provision of the Foreign
Corrupt Practices Act of 1977.
(r) Neither the Company nor any subsidiary is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940, as amended (the "Investment
Act"), and the rules and regulations of the Commission thereun-
der.
(s) The ratings assigned to the Notes at the time of
commencement of the Company's Medium Term Note program by
Standard & Poor's Corporation and by Moody's Investor Services,
Inc. have not been rescinded or lowered or, to the Company's
knowledge, threatened to be rescinded or lowered by either such
rating agency nor, to the Company's knowledge, has it been placed
under surveillance or review with negative implications by either
such rating agency (including any indication from the rating
agency to the Company that the Notes are on developing watch or
developing outlook).
(t) Any certificate signed by any officer of the Company
and delivered to the Agents or to counsel for the Agents pursuant
to this Agreement shall be deemed a representation and warranty
by the Company to each Agent as to the matters covered thereby.
2. SOLICITATIONS AS AGENT; PURCHASES AS
PRINCIPAL.
(a) Subject to the terms and conditions stated herein, the
Company hereby appoints each of the Agents as the agents of the
Company for the purpose of soliciting or receiving offers to
purchase the Notes from the Company by others. On the basis of
the representations and warranties contained herein, but subject to
the terms and conditions herein set forth, each Agent agrees, as the
agent of the Company, to use its reasonable efforts to solicit offers
to purchase the Notes upon the terms and conditions set forth in
the Prospectus. The Company expressly reserves the right (i) to
sell Notes directly to investors (other than broker-dealers) in those
jurisdictions in which the Company is so permitted and (ii) to
accept offers to purchase Notes from time to time through one or
more additional agents or dealers, acting as principal or agent, on
substantially the same terms as those applicable to sales of Notes
to or through Agents pursuant to this Agreement. No commission
will be paid on Notes sold directly by the Company pursuant to
clause (i) above. Each Agent may also purchase Notes from the
Company as principal for purposes of resale, as more fully
described in paragraph (e) of this Section.
(b) The Company reserves the right, in its sole discre-
tion, to instruct the Agents to suspend at any time, for any period
of time or permanently, the solicitation of offers to purchase the
Notes. The Company shall be entitled to suspend such solicitation
as to any Agent or all of the Agents, as determined by the Compa-
ny. Upon receipt of at least one business day's prior written notice
from the Company, the Agent or Agents to whom such instruc-
tions are directed will forthwith suspend solicitation of offers to
purchase such Notes from the Company as the Company shall
designate until such time as the Company has advised such Agent
or Agents that such solicitation may be resumed. For the purpose
of the foregoing sentence, "business day" shall mean any day
which is not a Saturday or Sunday and which is not a day on
which (i) banking institutions are generally authorized or
obligated by law to close in The City of New York or (ii) the New
York Stock Exchange, Inc. is closed for trading. The Company
shall transmit copies of any instructions delivered by the
Company pursuant to this paragraph to each Agent, regardless of
whether such instructions are directed to such Agent.
Upon receipt of notice from the Company as contemplated
by this Section 2(b), each applicable Agent shall suspend its
solicitation of offers to purchase the Notes until such time as the
Company shall have advised such Agent that such solicitation
may be resumed.
(c) Promptly upon the closing of the sale of any Notes
sold by the Company as a result of a solicitation made by or offer
to purchase received by an Agent, the Company agrees to pay
such Agent a commission, in the form of a discount, in accordance
with the schedule set forth in Exhibit A hereto.
(d) The Agents are authorized to solicit offers to pur-
chase the Notes only in such denominations as are specified in the
Prospectus at a purchase price as shall be specified by the Compa-
ny. Each Agent shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Notes received by it as
an Agent. The Company shall have the sole right to accept offers
to purchase such Notes and may reject any such offer in whole or
in part. Each Agent shall have the right in its discretion without
advising the Company to reject any offer to purchase the Notes
received by it that it reasonably considers to be unacceptable, in
whole or in part, and any such rejection shall not be deemed a
breach of its agreement contained herein.
No Note which the Company has agreed to sell pursuant to
this Agreement shall be deemed to have been purchased and paid
for, or sold by the Company, until such Note shall have been
delivered to the purchaser thereof against payment by such pur-
chaser. If the Company defaults on its obligations to deliver
Notes to a purchaser whose offer it has accepted, the Company
shall (i) hold the Agents harmless against any loss, claim or
damage arising from or as a result of such default by the Company
and (ii) pay to the Agent that solicited such offer any commission
to which such agent would have been entitled had such offer
resulted in a sale.
(e) Each sale of Notes to any Agent as principal, for
resale to one or more investors or to another broker-dealer (acting
as principal for purposes of resale) shall be made in accordance
with the terms of this Agreement and a Purchase Agreement,
whether oral (and confirmed in writing by such Agent to the
Company, that may be by facsimile transmission) or in writing,
which will provide for the sale of such Notes to, and the purchase
thereof by, such Agent. A Purchase Agreement may also specify
certain provisions relating to the reoffering of such Notes by such
Agent. The commitment of any Agent to purchase Notes from the
Company as principal shall be deemed to have been made on the
basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein
set forth. Each Purchase Agreement shall specify the principal
amount and terms of the Notes of the Company to be purchased
by an Agent, the time and date (each such time and date being
referred to herein as a "Time of Delivery") and place of delivery
of and payment for such Notes and such other information (as
applicable) as is set forth in Exhibit C hereto. The Company
agrees that if any Agent purchases Notes as principal for resale,
such Agent shall receive such compensation in the form of a
discount or otherwise, as shall be indicated in the applicable
Purchase Agreement or, if no compensation is indicated therein, a
commission in accordance with Exhibit A hereto. Any Agent may
utilize a selling or dealer group in connection with the resale of
such Notes. In addition, any Agent may offer the Notes it has
purchased as principal to other dealers. Any Agent may sell Notes
to any dealer at a discount and, unless otherwise specified in an
applicable Pricing Supplement, such discount allowed to any
dealer will not be in excess of 66-2/3% of the discount or
commission to be received by such Agent from the Company.
Such Purchase Agreement shall also specify any requirements for
delivery of opinions of counsel and officers' certificates pursuant
to Section 5 hereof.
(f) Administrative procedures respecting the sale of
Notes (the "Procedures") are set forth in Exhibit B hereto and may
be amended in writing from time to time by agreement between
the Agents and the Company. Each Agent and the Company
agree to perform the respective duties and obligations specifically
provided to be performed by each of them herein and in the
Procedures. The Procedures shall apply to all transactions
contemplated hereunder, including sales of Notes to any Agent as
principal pursuant to a Purchase Agreement, unless otherwise set
forth in such Purchase Agreement.
(g) The documents required to be delivered pursuant to
Section 5 hereof on the Closing Date (as defined below) shall be
delivered at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, 919 Third Avenue, New York, New York, at 10:00 A.M.,
New York City time, on the date of this Agreement, which date
and time of such delivery may be postponed by agreement
between the Agents and the Company but in no event shall be
later than the day prior to the date on which solicitation of offers
to purchase Notes is commenced (such time and date being re-
ferred to herein as the "Closing Date").
(h) Notwithstanding anything to the contrary contained
herein, the Company may authorize any other person, partnership
or corporation (an "Additional Agent"), without the consent of any
Agent, to act as its agent to solicit and receive offers for the pur-
chase of all or part of the Notes of the Company and shall give the
Agents prompt notice of such authorization; provided, however,
that any Additional Agent shall execute this Agreement or an
agreement to be bound hereby. Each Additional Agent may also
purchase Notes from the Company as principal, as described in
paragraph (e) of this Section.
3. COVENANTS OF THE COMPANY.
The Company covenants and agrees with each Agent:
(a) To prepare the Basic Prospectus and Prospectus
Supplement in a form reasonably acceptable to the Agents and to
file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission's close of business on the
second Business Day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required
by Rule 430A(a)(3) under the Securities Act; to make no further
amendment or supplement to the Registration Statement or to the
Prospectus prior to the termination of the offering of the Notes
pursuant to this Agreement or any Purchase Agreement except as
permitted herein; to advise the Agents, promptly after it receives
notice thereof, of the time when any amendment to the Registra-
tion Statement has been filed or becomes effective or any supple-
ment to the Prospectus or any amended Prospectus has been filed
and to furnish the Agents with copies thereof; to file promptly all
reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursu-
ant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subse-
quent to the date of the Prospectus and for so long as the delivery
of a prospectus is required in connection with the offering or sale
of the Notes; to advise the Agents, promptly after it receives no-
tice thereof, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any Prelim-
inary Prospectus or the Prospectus, of the suspension of the
qualification of the Notes for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or
for additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its with-
drawal;
(b) The Company will prepare, with respect to any Notes
to be sold through or to any Agent pursuant to this Agreement, a
Pricing Supplement with respect to such Notes in a form pre-
viously approved by the Agents and will file such Pricing
Supplement pursuant to Rule 424(b)(3) under the Securities Act
not later than the close of business of the Commission on the
second business day after the date on which such Pricing
Supplement is first used;
(c) To furnish promptly to the Agents and to counsel for
the Agents a copy of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits (other than those
incorporated by reference) filed therewith;
(d) To deliver promptly to the Agents such number of the
following documents as the Agents shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement, the Indenture and
such other exhibits as the Agents may reasonably request), (ii)
each Preliminary Prospectus, each Pricing Supplement, the
Prospectus Supplement, the Prospectus and any amended or sup-
plemented Prospectus and (iii) any document incorporated by
reference in the Prospectus (excluding exhibits thereto); and, if the
delivery of a prospectus is required at any time after the Effective
Date in connection with the offering or sale of the Notes, if the
solicitation of offers to purchase the Notes has not been suspended
and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would in-
clude an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary to amend or supplement the Prospec-
tus (or to file under the Exchange Act any document incorporated
by reference in the Prospectus) in order to comply with the
Securities Act or the Exchange Act, to notify the Agents and,
upon the reasonable request of the Agents, to file such document
and to prepare and furnish without charge to each Agent as many
copies as the Agents may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance;
(e) Except as otherwise provided in subsection (p) of this
Section, if at any time during the term of this Agreement any
event shall occur or condition exist as a result of which it is
necessary, in the reasonable opinion of counsel for the Agents or
counsel for the Company, to further amend or supplement the Pro-
spectus in order that the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, or if it shall be necessary,
in the reasonable opinion of either such counsel, to amend or
supplement the Registration Statement or the Prospectus in order
to comply with the requirements of the Securities Act or the
Securities Act Regulations, immediate notice shall be given, and
confirmed in writing, to each of the Agents to cease the
solicitation of offers to purchase the Notes in the Agent's capacity
as agent and to cease sales of any Notes the Agent may then own
as principal pursuant to a Purchase Agreement, and the Company,
at its expense, will promptly prepare and file with the Commission
such amendment or supplement, whether by filing documents
pursuant to the Exchange Act, the Securities Act or otherwise, as
may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with
such requirements;
(f) Except as otherwise provided in subsection (p) of this
Section, on or prior to the date on which there shall be released to
the general public interim financial statement information related
to the Company with respect to each of the first three quarters of
any fiscal year or preliminary financial statement information with
respect to any fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause
the Prospectus to be amended or supplemented to include or
incorporate by reference financial information with respect thereto
and corresponding information for the comparable period of the
preceding fiscal year, as well as such other information and
explanations as shall be necessary for an understanding thereof or
as shall be required by the Securities Act or the Securities Act
Regulations;
(g) Except as otherwise provided in subsection (p) of this
Section, on or prior to the date on which there shall be released to
the general public financial information included in or derived
from the audited financial statements of the Company for the
preceding fiscal year, the Company shall cause the Registration
Statement and the Prospectus to be amended, whether by the filing
of documents pursuant to the Exchange Act, the Securities Act or
otherwise, to include or incorporate by reference such audited
financial statements and the report or reports, and consent or
consents to such inclusion or incorporation by reference, of the
independent accountants with respect thereto, as well as such
other information and explanations as shall be necessary for an
understanding of such financial statements or as shall be required
by the Securities Act or the Securities Act Regulations;
(h) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or any
supplement to the Prospectus that may, in the judgment of the
Company and the Agents, be required by the Securities Act or re-
quested by the Commission;
(i) Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus, and
promptly after filing with the Commission any document incorpo-
rated by reference in the Prospectus or any Prospectus pursuant to
Rule 424 of the Rules and Regulations, to furnish a copy thereof
to the Agents and counsel for the Agents;
(j) The Company will make generally available to its
security holders as soon as practicable, but not later than 45 days
after the close of the period covered thereby (90 days if the period
covered corresponds to a fiscal year of the Company), an earnings
statement (in form complying with the provisions of Rule 158
under the 1933 Act) covering each twelve-month period
beginning, in each case, not later than the first day of the
Company's next fiscal quarter following the "effective date" (as
defined in such Rule 158) of the Registration Statement with
respect to each sale of Notes;
(k) So long as any Notes are outstanding, to furnish to
the Agents copies of all materials furnished by the Company to all
of its stockholders and all public reports and all reports and finan-
cial statements furnished by the Company to the principal national
securities exchange upon which the Company's common stock and
any debt securities may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant to
the Exchange Act or any rules or regulations of the Commission
thereunder;
(l) Promptly from time to time, to use its best efforts, to
take such action as the Agents may reasonably request to qualify
the Notes for offering and sale under the securities laws of such
jurisdictions as the Agents may reasonably request and to comply
with such laws so as to permit the continuance of sales and deal-
ings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Notes; provided, however, that
in connection therewith the Company shall not be required to
qualify as a foreign corporation, to file a general consent to
service of process in any jurisdiction where it is not so qualified or
to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject;
(m) If a designated series of Notes are to be duly au-
thorized for listing on a national securities exchange, to apply for
any listing of such designated Notes on such national securities
exchange and to use its best efforts to complete that listing,
subject only to official notice of issuance, prior to the relevant
Closing Date;
(n) Between the date of any Purchase Agreement and the
earlier of (i) the Settlement Date with respect to such Agreement
and (ii) five Business Days after the date of such Purchase
Agreement, the Company will not, without the prior consent of the
Purchaser that is party thereto, offer or sell, or enter into any
agreement to sell, any debt securities of the Company having
terms substantially similar to the terms of the Notes that are the
subject of such Purchase Agreement, except as may otherwise be
provided in any such Purchase Agreement;
(o) To apply the net proceeds from the sale of the Notes
being sold by the Company as set forth in the Prospectus; and
(p) The Company shall not be required to comply with the
provisions of subsections (e), (f) or (g) of this Section during any
period from the time (i) each of the Agents shall have suspended
solicitation of purchases of the Notes in its capacity as agent
pursuant to a request from the Company and (ii) the Agents shall
not then hold any Notes as principal purchased pursuant to a
Purchase Agreement, to the time the Company shall determine
that solicitation of purchases of the Notes should be resumed or
shall subsequently enter into a new Purchase Agreement with the
Agents.
4. PAYMENT OF EXPENSES.
The Company agrees to pay all costs, expenses, fees and taxes
incident to (i) the preparation, printing, filing and distribution under the
Securities Act of the Registration Statement (including financial
statements and exhibits), each Preliminary Prospectus and in each case
all amendments and supplements thereto, (ii) the printing and delivery of
the Prospectus and all amendments or supplements thereto, (iii) the
printing and delivery of this Agreement, any applicable Purchase
Agreement, the Blue Sky Memorandum and all other agreements,
memoranda, correspondence and other documents printed and delivered
in connection with the offering of the Notes (including in each case any
reasonable disbursements of counsel for the Agents relating to such
printing and delivery), (iv) the registration or qualification of the Notes
for offer and sale under the securities or Blue Sky Laws of the several
states (including in each case the reasonable fees and disbursements of
counsel for the Agents relating to such registration or qualification and
memoranda relating thereto), (v) filings and clearance with the NASD in
connection with the offering, if applicable, and (vi) furnishing such
copies of the Registration Statement, the Prospectus and all amendments
and supplements thereto as may be requested for use in connection with
the offering or sale of the Notes by the Agents.
5. CONDITIONS OF OBLIGATIONS OF AGENTS.
The obligation of the Agents, as the agents of the Company, under
this Agreement to solicit offers to purchase the Notes, the obligation of
any person who has agreed to purchase Notes to make payment for and
take delivery of Notes, and the obligation of any Agent to purchase
Notes pursuant to any Purchase Agreement is subject to the accuracy, on
each Representation Date, of the representations and warranties of the
Company contained herein, to the accuracy of the statements of the
officers of the Company made in any certificate finished pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) As of the Closing Date, the Basic Prospectus and
Prospectus Supplement shall have been timely filed with the Com-
mission in accordance with Section 3(b); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information
in the Registration Statement or the Prospectus or otherwise shall
have been complied with to the Agents' reasonable satisfaction.
(b) Sheila B. Hagen, Esq., General Counsel to the Com-
pany, shall have furnished to the Agents her opinion, as general
counsel of the Company, addressed to the Agents and dated the
Closing Date, in form and substance reasonably satisfactory to
counsel for the Agents to the effect that:
i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of Delaware;
ii) The Company's subsidiaries have been duly in-
corporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation; and the Company is duly qualified to do
business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification
and where the failure to be so qualified and in good
standing would have a Material Adverse Effect, and where
so qualified, has all corporate power and authority neces-
sary to own, lease or operate its properties and to conduct
businesses as described or incorporated by reference in the
Prospectus;
iii) To such counsel's knowledge, there are no con-
tracts or other documents which are required to be de-
scribed in the Prospectus or filed as exhibits to the Registra-
tion Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Pro-
spectus or filed as exhibits to the Registration Statement or
incorporated therein by reference under the Rules and
Regulations;
iv) The documents incorporated by reference in the
Prospectus (other than the financial statements and related
schedules therein and all other financial and statistical data
included or incorporated by reference therein or omitted
therefrom, as to which such counsel need express no opin-
ion), when they were filed with the Commission complied
as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Com-
mission thereunder;
v) To such counsel's knowledge, and other than as
set forth in the Registration Statement, the Prospectus, or
any documents incorporated by reference, there are no legal
or governmental proceedings pending to which the Com-
pany or any of its subsidiaries is a party or of which any
material property or assets of the Company or any of its
subsidiaries is the subject which is required to be disclosed
in the Registration Statement, Prospectus or in documents
incorporated therein by reference or which, if determined
adversely to the Company or any of its subsidiaries, would
reasonably be expected to have a Material Adverse Effect;
and to such counsel's knowledge, no such proceedings are
threatened by governmental authorities or others;
vi) The issuance and sale of the Notes by the
Company and the compliance by the Company with all of
the provisions of this Agreement, any applicable Purchase
Agreement and the Indenture and the consummation of the
transactions contemplated hereby and thereby, will not con-
flict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any in-
denture, mortgage, deed of trust, loan agreement or other
agreement known to such counsel to which the Company or
any of its subsidiaries is a party or by which any of them is
bound or to which any of the property or assets of the Com-
pany or any of its subsidiaries is subject except for such
conflicts, breaches, violations or defaults which would not
have a Material Adverse Effect nor will such actions result
in any violation of the provisions of any state or federal
statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body hav-
ing jurisdiction over the Company or any of its subsidiaries
or any of their material properties or assets, except for such
violations as would not have a Material Adverse Effect; and
vii) The statements contained in the Registration
Statement and Prospectus under the captions relating to the
Debt Securities, including the Notes, insofar as such state-
ments relate to the Notes and concern legal matters, are fair,
accurate and complete.
viii) The Notes have been duly and validly autho-
rized by the Company and, when duly executed, issued and
delivered by the Company, and authenticated by the Trustee
pursuant to the provisions of the Indenture, against payment
therefor as provided in this Agreement and any Purchase
Agreement, will constitute valid and legally binding obliga-
tions of the Company entitled to the benefits of the Inden-
ture and enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be
subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceabil-
ity is considered in a proceeding at law or in equity) and
except further as enforcement thereof may be limited by (a)
requirements that a claim or judgment with respect to any
Notes denominated in a Foreign Currency be converted into
U.S. dollars at a rate of exchange prevailing on a date deter-
mined pursuant to applicable law or (b) the ability of gov-
ernmental authorities to limit, delay or prohibit the making
of payments outside the United States; and the Notes, when
issued and delivered, will conform in all material respects to
the description thereof contained in the Prospectus;
ix) The Indenture has been duly authorized,
executed and delivered by the Company (assuming due
authorization, execution and delivery by the Trustee) and
constitutes a valid and legally binding obligation of the
Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be
subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceabil-
ity is considered in a proceeding at law or in equity) and
except further as enforcement thereof may be limited by (a)
requirements that a claim or judgment with respect to any
Notes denominated in a Foreign Currency be converted into
U.S. dollars at a rate of exchange prevailing on a date deter-
mined pursuant to applicable law or (b) the ability of
governmental authorities to limit, delay or prohibit the mak-
ing of payments outside the United States; and the Inden-
ture conforms in all material respects to the description
thereof contained in the Prospectus;
x) This Agreement and any applicable Purchase
Agreement each has been duly authorized, executed and de-
livered by the Company;
xi) The Company is not an "investment company"
within the meaning of such term under the Investment Act
and the rules and regulations of the Commission thereunder;
xii) The Registration Statement was declared ef-
fective under the Securities Act and the Indenture was qual-
ified under the Trust Indenture Act as of the date and time
specified in such opinion, the Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424
specified in such opinion on the date specified therein and
no stop order suspending the effectiveness of the Regis-
tration Statement has been issued and, to the knowledge of
such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
xiii) The statements contained in the Prospectus
under the captions relating to the Debt Securities, including
the Notes, insofar as they describe federal statutes, rules and
regulations, or portions thereof, constitute accurate de-
scriptions thereof in all material respects;
xiii) The Registration Statement, as of the Effective
Date, and the Prospectus, as of the date it was filed with the
Commission, and any further amendments or supplements
thereto, including the Pricing Supplement, made by the
Company prior to the date hereof (other than the financial
statements and related schedules therein and all other
financial and statistical data included or incorporated by
reference therein or omitted therefrom and other than the T-
l, as to which such counsel need express no opinion) appear
on the face to comply as to form in all material respects
with the requirements of the Securities Act and the Rules
and Regulations; and the Indenture conforms in all material
respects to the requirements of the Trust Indenture Act and
the applicable rules and regulations thereunder; and
xiv) The issuance and sale of the Notes by the
Company and the compliance by the Company with all of
the provisions of this Agreement, any applicable Purchase
Agreement and the Indenture and the consummation of the
transactions contemplated hereby and thereby, will not re-
sult in any violation of the provisions of the charter or by-
laws of the Company; and will not result in any violation of
the provisions of any state or federal statute or any order,
rule or regulation known to such counsel of any state or
federal court or governmental agency or body having juris-
diction over the Company except for such violations as
would not have a Material Adverse Effect; and, except for
the registration of the Notes under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act,
the Trust Indenture Act and applicable state securities laws
in connection with the purchase and distribution of the N-
otes, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental
agency or body is required for the execution delivery and
performance of this Agreement, any applicable Purchase
Agreement and the Indenture by the Company and the con-
summation by the Company of the transactions contemplat-
ed hereby and thereby.
In rendering the opinions required by subsection (b) of this
section, Sheila B. Hagen, Esq. may (i) state that her opinion is
limited to matters governed by the federal laws of the United
States of America, the laws of the State of New York or the
General Corporation Law of the State of Delaware and (ii) rely (to
the extent such counsel deems proper and specifies in her opinion)
as to matters involving the application of laws covered by support-
ing opinion upon the opinion of other counsel of good standing,
provided that such other counsel is reasonably satisfactory to
counsel for the Agents and furnishes a copy of its opinion to the
Agents. Such counsel may also state that, insofar as such opinion
involves factual matters, she has relied upon certificates of
officers of the Company and its subsidiaries and certificates of
public officials. In addition, Sheila B. Hagen, Esq., in rendering
the opinions required by clauses (i) and (ii) of subsection (b) with
respect to subsidiaries, may rely on opinions rendered by counsel
employed by such subsidiaries.
Sheila B. Hagen, Esq. shall have furnished to the Agents
written statements, addressed to the Agents and dated the Closing
Date, in form and substance reasonably satisfactory to the Agents,
to the effect that such counsel has participated in conferences with
officers and other representatives of the Company and
representatives of the independent public accountants for the
Company and representatives of the Agents and counsel for the
Agents at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and based on the
foregoing, such counsel does not believe that the Registration
Statement (other than the financial statements and related
schedules and all other financial data included or incorporated by
reference therein or omitted therefrom, and other than the Form T-
1, as to which such counsel shall express no opinion or belief), as
of the Effective Date and as of the date of filing each document
incorporated by reference in the Registration Statement, contained
any untrue statement of a material fact or omitted to state a materi-
al fact required to be stated therein or necessary in order to make
the statements therein not misleading, or that the Prospectus (other
than the financial statements and related schedules and all other
financial and statistical data included or incorporated by reference
therein or omitted therefrom, and other than the Form T-1, as to
which such counsel shall express no opinion or belief), as of its
date and the Closing Date, contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not mis-
leading. Sheila B. Hagen, Esq. shall also have furnished to the
Agents a written statement, addressed to the Agents and dated the
Closing Date, in form and substance reasonably satisfactory to the
Agents, to the effect that she does not believe that any document
incorporated by reference in the Prospectus (other than the finan-
cial statements and related schedules and all other financial and
statistical data included or incorporated by reference therein or
omitted therefrom, and other than the Form T-1, as to which such
counsel shall express no opinion or belief) contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
foregoing opinions and statements may be qualified by statements
to the effect that (i) such counsel has not, except with respect to
matters set forth in paragraph (b)(vi) above, independently
checked or verified the accuracy, completeness or fairness of the
information contained in the Registration Statement, Prospectus or
any documents incorporated by reference, and such counsel does
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement
or the Prospectus except for matters set forth in paragraph (b)(vi)
above and (ii) as to facts necessary to the determination of
materiality, such counsel is relying upon the opinions of officers
and other representatives of the Company.
(c) The Agents shall have received from counsel for the
Agents such opinion or opinions, dated the Closing Date, with re-
spect to the issuance and sale of the Notes, the Registration State-
ment, the Prospectus and other related matters as the Agents may
reasonably require.
(d) At the Closing Date, counsel for the Agents shall
have been furnished with such documents, certificates and
information as they may reasonably require for the purpose of en-
abling them to pass upon the issuance and sale of the Notes as
contemplated herein and in each Purchase Agreement and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein and therein contained.
(e) At the Closing Date or such Representation Date, as
the case may be, the Agents shall have received from Coopers &
Lybrand L.L.P., with respect to the Company, letters, in form and
substance reasonably satisfactory to the Agents, addressed to the
Agents and dated the date hereof (i) confirming that they are inde-
pendent public accountants with respect to the Company and its
subsidiaries within the meaning of the Securities Act, (ii) stating,
as of the date hereof (or with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and
other matters as provided in SAS No. 72.
(f) On the Closing Date, there shall not have been, since
the Closing Date or since the respective dates as of which infor-
mation is given in the Registration Statement and the Prospectus,
any material adverse change in the consolidated financial condi-
tion, stockholders' equity, results of operations or business of the
Company and its subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business, and the Company shall
have furnished to the Agents a certificate, dated the Closing Date
of its Chairman of the Board, its President, a Vice President of the
Company, or its Chief Financial Officer (or any person acting in
such capacity), stating that:
i) The representations and warranties of the
Company in Section 1 are true and correct as of such date;
the Company has complied with its agreements contained in
this Agreement and any applicable Purchase Agreement,
and the conditions set forth in Section 5(a) and 5(h) have
been fulfilled, in each case, in all material respects;
ii) They have carefully examined the Registration
Statement and the Prospectus and in their opinion (A) as of
the Effective Date, the Registration Statement and Prospec-
tus did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein, (in the
case of the Prospectus, in light of the circumstances in
which they were made) not misleading, and (B) since the
Effective Date no event has occurred which should have
been set forth or incorporated by reference in a supplement
or amendment to the Registration Statement or the Prospec-
tus which has not been so set forth; and
iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the
Commission.
(g) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the respective dates as of which
information is given in the Registration Statement or the
Prospectus or in any document incorporated by reference therein
any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth, contemplated or incorporated
by reference in the Prospectus or in any of the documents incorpo-
rated by reference therein, or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries except as set forth in the letters
described in paragraphs (f) or (g) of this Section 5, or any material
change in the financial condition, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated or incorporated by
reference in the Prospectus or in any of the documents incorpo-
rated by reference therein, the effect of which, in any such case
described in clause (i) or (ii), is, in the reasonable judgment of the
Agents, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of
the Notes being delivered on such Closing Date on the terms and
in the manner contemplated in the Prospectus.
(h) Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating
accorded the Company's securities by any "nationally recognized
statistical rating organization", as that term is defined by the Com-
mission for purposes of Rule 436(g)(2) of the Rules and Regula-
tions and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's securities.
(i) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange,
the American Stock Exchange, the NASDAQ National Market or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a general banking
moratorium shall have been declared by federal or New York state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities in-
volving the United States or there shall have been a declaration of
a national emergency or war by the United States, if the effect of
any event specified in this clause (iii) in the judgment of the
Agents makes it impracticable or inadvisable to proceed with the
public offering or delivery of the Notes on the terms and in the
manner contemplated in the Prospectus, (iv) any federal or state
statute, regulation, rule or order of any court or other governmen-
tal authority shall have been enacted, published, decreed or other-
wise promulgated which in the judgment of the Agents materially
and adversely affects, or will materially and adversely affect, the
business or operations of the Company and any subsidiaries, taken
as a whole, (v) any federal, state or local government or agency
shall take any action in respect of its monetary or fiscal affairs
which in the judgment of the Agents has a material adverse effect
on the financial markets in the United States, or (vi) there shall
have occurred such a material adverse change in general economic
or financial conditions (or such a material adverse change in inter-
national conditions the effect of which on the financial markets in
the United States shall be such) as to make it, in the reasonable
judgment of the Agents, impracticable or inadvisable to proceed
with the public offering or delivery of the Notes on the terms and
in the manner contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in substance
reasonably satisfactory to counsel for the Agents. The Company may
rely on any waiver of such conditions given by the Agents or counsel to
the Agents as if given by the Agents.
6. ADDITIONAL COVENANTS OF THE COMPANY
The Company covenants and agrees that:
(a) Each acceptance by the Company of an offer for the
purchase of Notes shall be deemed to be an affirmation that the
representations and warranties of the Company contained in this
Agreement and in any certificate theretofore given to the Agents
pursuant hereto are true and correct at the time of such acceptance,
and an undertaking that such representations and warranties will
be true and correct at the time of delivery to the purchaser or his
agent of the Notes relating to such acceptance as though made at
and as of each such time (and such representations and warranties
shall relate to the Registration Statement or the Prospectus as
amended or supplemented to each such time).
(b) During each period preceding the date, if any, on
which the Company has advised the Agents to suspend solicita-
tions of offers to purchase Notes pursuant to Section 2(b) or after
which the Company has advised the Agents that the solicitation of
offers to purchase Notes which was suspended may be resumed
(the "Marketing Period"), each time that the Registration
Statement or Prospectus shall be amended or supplemented, or
each time the Company sells Notes to an Agent as principal and
the applicable Purchase Agreement specifies the delivery of an
officers' certificate under this Section 6(b) as a condition to the
purchase of Notes pursuant to such Purchase Agreement or each
time the Company files with, or mails for filing to, the
Commission any document incorporated by reference in the
Prospectus, the Company shall submit to the Agents certificates,
(i) as of the date of such amendment or supplement or as of the
Time of Delivery relating to such sale or (ii) if such Prospectus
was not amended or supplemented during a Marketing Period, as
of the first day of the next succeeding Marketing Period, repre-
senting that the statements contained in the certificates referred to
in Section 5(f) hereof which were last furnished to the Agents are
true and correct at the time of such amendment or supplement,
Time of Delivery or first day of such Marketing Period, as the
case may be, as though made at and as of such time (except that
such statements shall be deemed to relate to the Prospectus as
amended and supplemented to such time).
(c) During each Marketing Period, each time that the
Registration Statement or the Prospectus shall be amended or
supplemented (other than by a Pricing Supplement specifically
relating to the terms of a particular series of Notes), each time the
Company files with, or mails for filing to, the Commission its
Annual Report on Form 10-K, each time the Company files with,
or mails for filing to, the Commission its Quarterly Report on
Form 10-Q, each time the Company files with, or mails for filing
to, the Commission a Current Report on Form 8-K or each time
the Company sells Notes to an Agent as principal and the appli-
cable Purchase Agreement specifies the delivery of a legal opinion
under this Section 6(c) as a condition to the purchase of Notes
pursuant to such Purchase Agreement, the Company shall (i)
concurrently with such amendment, supplement, event or Time of
Delivery relating to such sale or (ii) if such Registration Statement
or the Prospectus was not amended or supplemented during a
Marketing Period, on the first day of the next succeeding
Marketing Period, furnish the Agents and their counsel with the
written opinion of the Company's General Counsel or such other
counsel acceptable to the Agents, addressed to the Agents and
dated the date of delivery of such opinion, in form satisfactory to
the Agents, of the same effect as the opinion referred to in Section
5(b) hereof, but modified, as necessary, to relate to the Registra-
tion Statement or the Prospectus as amended or supplemented to
the time of delivery of such opinion; provided, however, that in
lieu of such opinion, such counsel may furnish the Agents with a
letter to the effect that the Agents may rely on such prior opinion
to the same extent as though it was dated the date of such letter
authorizing reliance (except that statements in such prior opinion
shall be deemed to relate to the Registration Statement or the
Prospectus as amended or supplemented to the time of delivery of
such letter authorizing reliance).
(d) On any settlement date for the sale of Notes, the
Company shall, if requested by the Agent that solicited or received
the offer to purchase any Notes being delivered on such settlement
date, furnish such Agent with a written opinion of the Company's
General Counsel or such other counsel acceptable to the Agents,
dated such settlement date, in form satisfactory to such Agent, to
the effect set forth in Section 5(b) hereof, but modified, as
necessary, to relate to the Registration Statement or the Prospectus
relating to the Notes to be delivered on such settlement date;
provided, however, that in lieu of such opinion, such counsel may
furnish the Agents with a letter to the effect that the Agents may
rely on such prior opinion to the same extent as though it was
dated such settlement date (except that statements in such prior
opinion shall be deemed to relate to the Registration Statement or
the Prospectus as amended or supplemented to the time of deliv-
ery of such letter authorizing reliance).
(e) Each time that the Registration Statement or the Pro-
spectus shall be amended or supplemented (other than by a Pricing
Supplement specifically relating to the terms of a particular series
of Notes), each time the Company files with, or mails for filing to,
the Commission its Annual Report on Form 10-K, each time the
Company files with, or mails for filing to, the Commission its
Quarterly Report on Form 10-Q, each time the Company files
with, or mails for filing to, the Commission a Current Report on
Form 8-K or each time the Company sells Notes to an Agent as
principal and the applicable Purchase Agreement specifies the
delivery of a letter of Coopers & Lybrand under this Section 6(e)
as a condition to the purchase of Notes pursuant to such Purchase
Agreement, the Company shall concurrently with such
amendment, supplement, event or Time of Delivery relating to
such sale furnish the Agents and their counsel with a letter of
Coopers & Lybrand to the same effect as the letter referred to in
Section 5(e) hereof but modified, as necessary, to relate to the
Registration Statement or the Prospectus as amended or supple-
mented to the time of delivery of such opinion; provided,
however, that if the Registration Statement or the Prospectus is
amended or supplemented solely to include financial information
as of and for an interim reporting period, Coopers & Lybrand may
limit the scope of such letter to the unaudited financial statements
included in such amendment or supplement unless any other infor-
mation included therein of an accounting, financial or statistical
nature is of such a nature that, in the reasonable judgment of the
Agents or such Purchaser, as the case may be, or counsel to the
Agents, such letter should cover such other information; provided,
further, that with respect to financial information for an interim
reporting period filed with the Commission in a Current Report on
Form 8-K, no such letter need be furnished to the Agents and their
counsel unless the Company sells one or more notes to an Agent
prior to the time such letter is otherwise required to be furnished
pursuant to this Section 6(e), in which case such letter shall be
furnished at least three days prior to the anticipated closing date
with respect to the sale of such Note.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless
each Agent and each person, if any, who controls any Agent
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained
in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any
amendments or supplements thereto) or caused by any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not mis-
leading, except insofar as such losses, claims, damages, liabilities
or judgments are caused by any such untrue statement or omission
or alleged untrue statement or omission based upon information
relating to any Agents furnished in writing to the Company by or
on behalf of any Agent expressly for use therein.
(b) In case any action shall be brought against any Agent
or any person controlling such Agent, based upon the Registration
Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought
against the Company, such Agent shall promptly notify the
Company in writing and the Company shall assume the defense
thereof, including the employment of counsel reasonably satisfac-
tory to such indemnified party and payment of all fees and
expenses. Any Agent or any such controlling person shall have
the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Agent or such con-
trolling person unless (i) the employment of such counsel shall
have been specifically authorized in writing by the Company, (ii)
the Company shall have failed to assume the defense and employ
counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such Agent or such controlling
person and the Company and such Agent or such controlling
person shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from
or additional to those available to the Company (in which case the
Company shall not have the right to assume the defense of such
action on behalf of such Agent or such controlling person, it being
understood, however, that the Company shall not, in connection
with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition
to any local counsel) for all such Agents and controlling persons,
which firm shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation, and that all such fees and
expenses shall be reimbursed as they are incurred). The Company
shall not be liable for any settlement of any such action effected
without its written consent, but, if settled with the written consent
of the Company, the Company agrees to indemnify and hold
harmless any Agent and any such controlling person from and
against any loss or liability by reason of such settlement.
Notwithstanding the immediately preceding sentence, if in any
case where the fees and expenses of counsel are at the expense of
the indemnifying party and an indemnified party shall have
requested the indemnifying party to reimburse the indemnified
party for such fees and expenses of counsel as incurred, such
indemnifying party agrees that it shall be liable for any settlement
of any action effected without its written consent if (i) such set-
tlement is entered into more than 30 business days after the receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified
party in accordance with such request for reimbursement prior to
the date of such settlement. No indemnifying party shall without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the
subject matter of such proceeding.
(c) Each Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its
officers and any person controlling the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Agent but only with reference to information
relating to such Agent furnished in writing to the Company by or
on behalf of such Agent expressly for use in the Registration
Statement or the Prospectus. In case any action shall be brought
against the Company, any of its directors, any such officer or any
person controlling the Company based on the Registration
Statement or the Prospectus and in respect of which indemnity
may be sought against any Agent, such Agent shall have the rights
and duties given to the Company (except that if the Company
shall have assumed the defense thereof, such Agent shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel for the Company shall be at the expense of such Agent),
and the Company, its directors, any such officers and any person
controlling the Company shall have the rights and duties given to
the Agent, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one
hand and the Agents on the other hand from the offering of the
Company's Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the
Agents in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments,
as well as any other relevant equitable considerations. The rela-
tive benefits received by the Company and the Agents shall be
deemed to be in the same proportion as the total net proceeds from
the offering of the Notes (before deducting expenses) received by
the Company, and the total underwriting discounts and
commissions received by the Agents from the offering of the
Notes, bear to the total price to the public of the Notes. The
relative fault of the Company and the Agents 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 Agents and the parties' relative intent, knowl-
edge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and each Agent agree that it would not be just and
equitable if contribution pursuant to this Section 7(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 in the immediately
preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstand-
ing the provisions of this Section 7, no Agent shall be required to
contribute any amount in excess of the amount by which the total price
at which the Notes purchased by or sold through such Agent and
distributed to the public were offered to the public exceeds the amount
of any damages which such Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Agents' obligations to contribute pursuant to this
Section 7(d) are several in proportion to the respective principal amount
of Notes purchased by or through each of the Agents hereunder and not
joint.
8. STATUS OF EACH AGENT.
In soliciting offers to purchase Notes from the Company pursuant
to this Agreement (other than in respect of any Purchase Agreement),
each Agent is acting individually and not jointly and is acting solely as
agent for the Company and not as principal. Each Agent will make
reasonable efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes from the Company has
been solicited by such Agent and accepted by the Company but such
Agent shall have no liability to the Company in the event any such
purchase is not consummated for any reason. If the Company shall
default in its obligations to deliver Notes to a purchaser whose offer it
has accepted, the Company shall (i) hold the Agents harmless against
any loss, claim or damage arising from or as a result of such default by
the Company and (ii) pay to the Agents any commission to which they
would be entitled in connection with such sale.
9. REPRESENTATIONS, WARRANTIES AND OBLIGA-
TIONS TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Agents
contained in this Agreement, or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain operative and in
full force and effect, regardless of any investigation made by or on
behalf of any Agent or any person controlling such Agent or by or on
behalf of the Company, and shall survive each delivery of and payment
for any of the Notes.
10. TERMINATION.
This Agreement may be terminated for any reason with respect to
any party hereto, at any time, by any party hereto upon the giving of one
day's written notice of such termination to the other parties hereto;
provided, however, that such termination shall be effective only with
respect to such terminating party. If, at the time of a termination, an
offer to purchase any of the Notes has been accepted by the Company
but the time of delivery to the purchaser has not occurred, the provisions
of this Agreement shall remain in effect with respect to the Agents and
the Company until such Notes are delivered. The provisions of Sections
2(c), 4, 7, 9, 10, 11 and 12 hereof shall survive any termination of this
Agreement.
Any purchaser may terminate any Purchase Agreement, immedi-
ately upon notice to the Company, at any time prior to the Repre-
sentation Date relating thereto (i) if there has been, since the date of such
Purchase Agreement, any material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries taken as a
whole, or in the earnings, affairs or business prospects of the Company
and its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, (ii) if there has occurred any outbreak or
escalation of hostilities or other calamity or crisis the effect of which on
the financial markets of the United States or elsewhere is such as to
make it, in the judgment of such purchaser, impracticable to market the
Notes or enforce contracts for the sale of the Notes, (iii) if trading in any
securities of the Company has been suspended by the Commission or a
national securities exchange, or if trading generally on the American
Stock Exchange or the New York Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either
the New York Stock Exchange or the American Stock Exchange or by
order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by federal or New York State
authorities or by the relevant authorities of any country issuing any
foreign or composite currency in which the Notes covered by such
Purchase Agreement are denominated or payable, (iv) if there has been
any downgrading or any notice has been given of any intended or poten-
tial downgrading in the rating accorded any of the Company's securities
by any "nationally recognized statistical rating organization," as such
term is defined for the purposes of Rules 436(g)(2) under the Securities
Act, (v) if there shall have come to the Purchaser's attention any fact that
causes the Purchaser to believe that the Prospectus, at the time it was
required to be delivered to a purchaser of Notes, contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at the time of such delivery, not misleading.
11. NOTICES.
Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or submitted by any standard form of
telecommunication.
Notices shall be sent as follows:
In the case of Donaldson, Lufkin & Jenrette Securities
Corporation, to:
Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: MTN Trading
Telephone: (212) 892-3035
Telecopy: (212) 892-4298
In the case of Salomon Brothers Inc, to:
Salomon Brothers Inc
7 World Trade Center, 42nd Floor
New York, New York 1048
Attention: MTN Trading
Telephone: (212) 783-2882
Telecopy: (212) 783-4120
In the case of the Company, to:
IBP, inc.
IBP Avenue
Dakota City, Nebraska 68731
Attention: General Counsel
Telephone: (402) 241-3827
Telecopy: (402) 241-2427
12. BINDING EFFECT; BENEFITS.
This Agreement and any Purchase Agreement shall be binding
upon each Agent, the Company and their respective successors. This
Agreement and the terms and provisions hereof and any Purchase
Agreement are for the sole benefit of only those persons, except that (a)
the representations, warranties, indemnities and agreements of the
Company contained in this Agreement and any Purchase Agreement
shall also be deemed to be for the benefit of the person or persons, if
any, who control any Agent within the meaning of Section 15 of the
Securities Act and (b) the indemnity agreement of the Agents contained
in Section 7 hereof shall be deemed to be for the benefit of any person
controlling the Company. Nothing in this Agreement is intended or shall
be construed to give any person, other than the person referred to in this
Section, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
13. GOVERNING LAW; COUNTERPARTS.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. This Agreement may be
executed in counterparts and the executed counterparts shall together
constitute a single instrument.
14. COUNTERPARTS.
This Agreement may be executed in counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be
deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
15. PARAGRAPH HEADINGS.
The paragraph headings used in this Agreement are for conve-
nience of reference only, and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
Very truly yours,
IBP, inc.
By: /s/
Name: John N. Borgh
Title: Vice President & Treasurer
Confirmed and accepted
as of the date first
above written:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
Acting severally on behalf of
themselves and the several
Agents
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/
Name: Eric Manley
Title: Vice President
EXHIBIT 1(b)
REMARKETING AGREEMENT, dated as of January 15, 1998
(the "Remarketing Agreement"), between:
IBP, INC., a Delaware corporation (the "Company"); and
NATIONSBANC MONTGOMERY SECURITIES LLC
("NMS" and, in its capacity as the remarketing dealer hereunder, the
"Remarketing Dealer").
WHEREAS, the Company has issued $50,000,000 aggregate
principal amount of its 6.00% Remarketable Or Redeemable Securities_due
January 15, 2011 (the "ROARS"_) / pursuant to an Indenture, dated as of
January 26, 1996 (the "Indenture"), between the Company and The Bank of
New York, as trustee (in such capacity, the "Trustee"); and
WHEREAS, the ROARS are being sold initially pursuant to a
purchase agreement, dated January 6, 1998 (the "Purchase Agreement"),
between the Company and NMS; and
WHEREAS, the Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (No.
033-64459) under the Securities Act of 1933, as amended (the "1933 Act"),
in connection with the offering of Debt Securities, including the ROARS,
which registration statement was declared effective by order of the
Commission, and has filed such amendments thereto and such amended
prospectuses as may have been required to the date hereof, and will file such
additional amendments thereto and such additional amended prospectuses as
may hereafter be required (such registration statement (No. 033-64459),
including any amendments and supplements thereto, and including any
preliminary or final prospectus relating to the offering of ROARS by the
Company constituting a part thereof (including the Prospectus Supplement
dated December 12, 1997 (the "Prospectus Supplement")), and all
documents incorporated therein by reference, as from time to time amended
or supplemented pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the 1933 Act, or otherwise, are referred to herein
as the "Registration Statement" and the "Prospectus", respectively, except
that if any revised prospectus shall be provided to the Remarketing Dealer
by the Company for use in connection with the remarketing of the ROARS
which differs from the Prospectus on file at the Commission at the time the
Registration Statement became effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of
the rules and regulations under the 1933 Act (the "1933 Act Regulations")),
the term "Prospectus" shall refer to such revised prospectus from and after
the time it is first provided to the Remarketing Dealer for such use); and
WHEREAS, NMS is prepared to act as the Remarketing Dealer
with respect to the remarketing of the ROARS on January 16, 2001 (the
"Remarketing Date") pursuant to the terms of, but subject to the conditions
set forth in, this Agreement;
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used and not defined
in this Agreement shall have the meanings assigned to them in the Indenture
(including in the form of the ROARS issued thereunder).
Section 2. Representations and Warranties.
(a) The Company represents and warrants to the Remarketing
Dealer as of the date hereof, the Notification Date (as defined below), the
Determination Date (as defined below), the Remarketing Date and each date
thereafter, if any, of delivery of ROARS by the Remarketing Dealer (each of
the foregoing dates being hereinafter referred to as a "Representation
Date"), that (i) it has made all the filings with the Commission that it is
required to make under the 1934 Act and the rules and regulations
thereunder (the "1934 Act Regulations") (collectively, the "1934 Act
Documents"), (ii) each 1934 Act Document complies in all material respects
with the requirements of the 1934 Act and 1934 Act Regulations, and each
1934 Act Document did not at the time of filing with the Commission, and
as of each Representation Date will not, include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (iii) the
applicable Remarketing Materials (as defined herein) will not, as of the
Remarketing Date and each date thereafter, if any, of delivery of ROARS by
the Remarketing Dealer, include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, (iv) no consent, approval,
authorization, order or decree of any court or governmental agency or body,
including as to an effective registration statement under the 1933 Act with
respect to the ROARS, is required for the consummation by the Company of
the transactions contemplated by this Agreement or in connection with the
remarketing of ROARS pursuant hereto, except such as have been or shall
have been obtained or rendered, as the case may be, and (v) the
representations and warranties contained in the Purchase Agreement are true
and correct with the same force and effect as though expressly made at and
as of the date hereof.
(b) The Company further represents and warrants to the
Remarketing Dealer as of each Representation Date as follows:
(i) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the
1934 Act Documents are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(ii) The financial statements included or incorporated by
reference in the 1934 Act Documents, together with the related
schedules and notes, present fairly the financial condition and results
of operations of the Company and its consolidated subsidiaries, if any,
at the dates and for the periods indicated; said financial statements
have been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules included or incorporated
by reference in the 1934 Act Documents present fairly in accordance
with GAAP the information required to be stated therein. Any pro
forma financial statements and the related notes thereto included or
incorporated by reference in the 1934 Act Documents present fairly
the information shown therein, have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(iii) Since the respective dates as of which information is given
in the 1934 Act Documents, except as otherwise stated therein, there
has been no material adverse change in the consolidated financial
condition, stockholders' equity or results of operations or business of
the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect").
(iv) The Company and each of its subsidiaries have been duly
incorporated and are validly existing and in good standing under the
laws of their respective jurisdictions of incorporation and are duly
qualified to do business and in good standing as a foreign corporation
in each jurisdiction in which their respective ownership of property or
conduct of business requires such qualification, except where the
failure to so qualify would not have a Material Adverse Effect, and
have power and authority necessary to own or hold their respective
properties, to conduct the business in which they are engaged and, in
the case of the Company, to enter into and perform its obligations
under this Agreement.
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The Indenture has been validly authorized, executed and
delivered by the Company and duly qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and, assuming it
has been duly executed and delivered by the Trustee, constitutes the
legally binding obligation of the Company, except as the
enforceability thereof may be subject to (x) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (y) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(vii) The ROARS have been validly authorized and executed
by the Company and authenticated, issued and delivered in the
manner provided for in the Indenture and delivered against payment
of the purchase price therefor as provided in the Purchase Agreement,
and constitute legally binding obligations of the Company entitled to
the benefits of the Indenture, except as the enforceability thereof may
be subject to (x) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors'
rights generally and (y) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
(viii) Neither the Company nor any of its subsidiaries (if any)
is in violation of its corporate charter or by-laws or in default under
any agreement, indenture or instrument, except for such defaults that
would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Indenture and the
ROARS and the consummation of the transactions contemplated
herein and in the Prospectus (including the issuance and sale of the
ROARS and the use of the proceeds from the sale thereof as described
in the Prospectus under the caption "Use of Proceeds") have been duly
authorized by all necessary corporate action and do not and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any such subsidiary pursuant to,
any material agreement, indenture or instrument to which the
Company or any such subsidiary is a party or by which it is bound or
to which any of its property or assets is subject, except for such
conflicts, breaches, defaults, liens, charges or encumbrances that
would not result in a Material Adverse Effect and would not result in
any liability of the Remarketing Dealer, nor will such action result in
a material violation of the charter or by-laws of the Company or any
such subsidiary or any order, rule or regulation of any court or
governmental agency having jurisdiction over the Company or any
such subsidiary or its property.
(ix) There is no material action, suit or proceeding before any
court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any subsidiary, which is required to be
disclosed in the 1934 Act Documents (other than as disclosed therein),
or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement or the performance
by the Company of its obligations hereunder.
(x) No consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
execution, delivery and performance by the Company of this
Agreement and the Indenture or the consummation of the transactions
contemplated hereby and thereby, except such as have been already
obtained.
(xi) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(xii) The ROARS are rated at least "A3" by Moody's Investors
Service, Inc., at least "A-" by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., or, in each case, such other rating as to
which the Company shall have most recently notified the Remarketing
Dealer pursuant to Section 3(a) hereof.
(c) Any certificate signed by any director or officer of the
Company and delivered to the Remarketing Dealer or to counsel for the
Remarketing Dealer in connection with the remarketing of the ROARS shall
be deemed a representation and warranty by the Company to the
Remarketing Dealer as to the matters covered thereby.
Section 3. Covenants of the Company. The Company
covenants with the Remarketing Dealer as follows:
(a) The Company will provide prompt notice by telephone,
confirmed in writing (which may include facsimile or other electronic
transmission), to the Remarketing Dealer of (i) any notification or
announcement by a "nationally recognized statistical rating agency" (as
defined by the Commission for purposes of Rule 436(g)(2) under the 1933
Act) with regard to the ratings of any securities of the Company, including,
without limitation, notification or announcement of a downgrade in or
withdrawal of the rating of any security of the Company or notification or
announcement of the placement of any rating of any securities of the
Company under surveillance or review, including placement on Credit
Watch or on Watch List with negative implications, or (ii) the occurrence at
any time of any event set forth in Section 9(c) of this Agreement.
(b) The Company will furnish to the Remarketing Dealer:
(i) the Registration Statement, the Prospectus and the
Prospectus Supplement relating to the ROARS (including in each case
any amendment or supplement thereto and each document
incorporated therein by reference);
(ii) each 1934 Act Document filed after the date hereof; and
(iii) in connection with the remarketing of ROARS, such other
information as the Remarketing Dealer may reasonably request from
time to time.
The Company agrees to provide the Remarketing Dealer with as many
copies of the foregoing written materials and other Company-approved
information as the Remarketing Dealer may reasonably request for use in
connection with the remarketing of ROARS and consents to the use thereof
for such purpose.
(c) If, at any time during which the Remarketing Dealer would
be obligated to take any action under this Agreement, any event or condition
known to the Company relating to or affecting the Company, any subsidiary
thereof or the ROARS shall occur which could reasonably be expected to
cause any of the reports, documents, materials or information referred to in
paragraph (b) above or any document incorporated therein by reference
(collectively, the "Remarketing Materials") to contain an untrue statement
of a material fact or omit to state a material fact, the Company shall
promptly notify the Remarketing Dealer in writing of the circumstances and
details of such event or condition.
(d) So long as the ROARS are outstanding, the Company will
file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(e) The Company will comply with the 1933 Act and the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations and the 1939
Act and the rules and regulations of the Commission thereunder so as to
permit the completion of the remarketing of the ROARS as contemplated in
this Agreement and in each Prospectus. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
ROARS, any event shall occur or condition shall exist as a result of which it
is necessary, in the reasonable opinion of counsel for the Remarketing
Dealer or for the Company, to amend the Registration Statement or amend
or supplement any Prospectus in order that such Prospectus will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser, or if
it shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or file a new registration statement or amend
or supplement any Prospectus or issue a new prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations and the
Commission's interpretations of the 1933 Act and the 1933 Act Regulations,
the Company, at its expense, will promptly (i) prepare and file with the
Commission such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or any
such Prospectus comply with such requirements, or prepare and file any
such new registration statement and prospectus as may be necessary for such
purpose, (ii) furnish to the Remarketing Dealer such number of copies of
such amendment, supplement or other document as the Remarketing Dealer
may reasonably request and (iii) furnish to the Remarketing Dealer an
officers' certificate, an opinion, including a statement as to the absence of
material misstatements in or omissions from the Registration Statement and
each Prospectus, as amended or supplemented, of counsel for the Company
satisfactory to the Remarketing Dealer and a "comfort letter" from the
Company's independent accountants, in each case in form and substance
satisfactory to the Remarketing Dealer, of the same tenor as the officers'
certificate, opinion and comfort letter, respectively, delivered pursuant to
the Purchase Agreement, but modified to relate to the Registration Statement
and each Prospectus as amended or supplemented to the date thereof or such
new registration statement and prospectus.
(f) The Company agrees that neither it nor any of its
subsidiaries or affiliates shall purchase or otherwise acquire, or enter into
any agreement to purchase or otherwise acquire, any of the ROARS prior to
the remarketing thereof by the Remarketing Dealer, other than pursuant to
Section 4(g) or 4(h) of this Agreement.
(g) The Company will comply with each of the covenants set
forth in the Purchase Agreement.
Section 4. Appointment and Obligations of the
Remarketing Dealer.
(a) Unless this Agreement is otherwise terminated in
accordance with Section 12 hereof, in accordance with the terms, but subject
to the conditions, of this Agreement, the Company hereby appoints NMS,
and NMS hereby accepts such appointment, as the exclusive Remarketing
Dealer with respect to $50,000,000 aggregate principal amount of ROARS,
subject further to repurchase of the ROARS in accordance with clause (g) of
this Section 4 or redemption of the ROARS in accordance with clause (h) of
this Section 4.
(b) It is expressly understood and agreed by the parties hereto
that the obligations of the Remarketing Dealer hereunder with respect to the
ROARS to be remarketed on the Remarketing Date are conditioned on (i)
the issuance and delivery of such ROARS pursuant to the terms and
conditions of the Purchase Agreement and (ii) the Remarketing Dealer's
election on the Notification Date to purchase the ROARS for remarketing on
the Remarketing Date. It is further expressly understood and agreed by and
between the parties hereto that, if the Remarketing Dealer has elected to
remarket the ROARS pursuant to clause (c) below, the Remarketing Dealer
shall not be obligated to set the Interest Rate to Maturity (as defined below)
on any ROARS, to remarket any ROARS or to perform any of the other
duties set forth herein at any time after the Notification Date in the event
that (i) any of the conditions set forth in clause (a) or (b) of Section 9
hereof shall not have been fully and completely met to the satisfaction of the
Remarketing Dealer, or (ii) any of the events set forth in clause (c) of
Section 9 hereof shall have occurred.
(c) On a Business Day not later than five Business Days prior
to the Remarketing Date, the Remarketing Dealer will notify the Company
and the Trustee as to whether it elects to purchase the ROARS on the
Remarketing Date (the "Notification Date"). If, and only if, the
Remarketing Dealer so elects, the ROARS shall be subject to mandatory
tender to the Remarketing Dealer for purchase and remarketing on the
Remarketing Date, upon the terms and subject to the conditions described
herein. The purchase price of such tendered ROARS shall be equal to 100%
of the aggregate principal amount thereof.
(d) Subject to the Remarketing Dealer's election to remarket
the ROARS as provided in clause (c) above, by 3:30 p.m., New York City
time, on the third Business Day immediately preceding the Remarketing
Date (the "Determination Date"), the Remarketing Dealer shall determine
the Interest Rate to Maturity to the nearest one hundred-thousandth
(0.00001) of one percent per annum. The "Interest Rate to Maturity" shall
be equal to the sum of 5.530% (the "Base Rate") and the Applicable Spread
(as defined below), which will be based on the Dollar Price (as defined
below) of the ROARS.
The "Applicable Spread" shall be the lowest bid indication,
expressed as a spread (in the form of a percentage or in basis points)
above the Base Rate, obtained by the Remarketing Dealer on the
Determination Date from the bids quoted by five Reference Corporate
Dealers (as defined below) for the full aggregate principal amount of
the ROARS at the Dollar Price, but assuming (i) an issue date that is
the Remarketing Date, with settlement on such date without accrued
interest, (ii) a maturity date that is the Stated Maturity Date and (iii) a
stated annual interest rate equal to the Base Rate plus the spread bid
by the applicable Reference Corporate Dealer. If fewer than five
Reference Corporate Dealers bid as described above, then the
Applicable Spread shall be the lowest of such bid indications obtained
as described above. The Interest Rate to Maturity announced by the
Remarketing Dealer, absent manifest error, shall be binding and
conclusive upon the actual purchasers of the ROARS ("Beneficial
Owners") and Holders of the ROARS, the Company and the Trustee.
"Comparable Treasury Issues" means the United States
Treasury security or securities selected by the Remarketing Dealer as
having an actual or interpolated maturity or maturities comparable to
the remaining term of the ROARS being purchased by the
Remarketing Dealer.
"Comparable Treasury Price" means, with respect to the
Remarketing Date, (a) the offer prices for the Comparable Treasury
Issues (expressed in each case as a percentage of its principal amount)
on the Determination Date, as set forth on "Telerate Page 500" (or
such other page as may replace Telerate Page 500), or (b) if such page
(or any successor page) is not displayed or does not contain such offer
prices on the Determination Date, (i) the average of the Reference
Treasury Dealer Quotations (as defined below) for the Remarketing
Date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (ii) if the Remarketing Dealer obtains fewer
than four such Reference Treasury Dealer Quotations, the average of
all such Reference Treasury Dealer Quotations. "Telerate Page 500"
means the display designated as "Telerate Page 500" on Dow Jones
Markets (or such other page as may replace Telerate Page 500 on such
service) or such other service displaying the offer prices specified in
(a) above as may replace Dow Jones Markets.
"Dollar Price" means, with respect to the ROARS, the present
value, as of the Remarketing Date, of the Remaining Scheduled
Payments (as defined below) discounted to the Remarketing Date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-
day months) at the Treasury Rate (as defined below).
"Reference Corporate Dealers" means each of NationsBanc
Montgomery Securities LLC, BankAmerica Robertson Stephens,
Donaldson, Lufkin & Jenrette Securities Corporation, Salomon Smith
Barney and UBS Securities LLC and their respective successors;
provided that if any of the foregoing or their affiliates shall cease to be
a leading dealer of publicly traded debt securities of the Company (a
"Primary Corporate Dealer"), the Remarketing Dealer shall substitute
therefor another Primary Corporate Dealer.
"Reference Treasury Dealer" means each of NationsBanc
Montgomery Securities LLC, BankAmerica Robertson Stephens,
Donaldson, Lufkin & Jenrette Securities Corporation, Salomon Smith
Barney and UBS Securities LLC and their respective successors;
provided that if any of the foregoing or their affiliates shall cease to be
a primary U.S. Government securities dealer (a "Primary Treasury
Dealer"), the Remarketing Dealer shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and the Remarketing Date, the
offer prices for the Comparable Treasury Issues (expressed in each
case as a percentage of its principal amount) quoted in writing to the
Remarketing Dealer by such Reference Treasury Dealer by 3:30 p.m.,
on the Determination Date.
"Remaining Scheduled Payments" means, with respect to the
ROARS, the remaining scheduled payments of the principal thereof
and interest thereon, calculated at the Base Rate only, that would be
due after the Remarketing Date to and including the Stated Maturity
Date; provided that if the Remarketing Date is not an Interest Payment
Date with respect to the ROARS, the amount of the next succeeding
scheduled interest payment thereon, calculated at the Base Rate only,
will be reduced by the amount of interest accrued thereon, calculated
at the Base Rate only, to the Remarketing Date.
"Treasury Rate" means, with respect to the Remarketing Date,
the rate per annum equal to the semi-annual equivalent yield to
maturity or interpolated (on a day count basis) yield to maturity of the
Comparable Treasury Issues, assuming a price for the Comparable
Treasury Issues (expressed as a percentage of its principal amount),
equal to the Comparable Treasury Price for the Remarketing Date.
(e) Subject to the Remarketing Dealer's election to remarket
the ROARS as provided in clause (c) above, the Remarketing Dealer shall
notify the Company, the Trustee and The Depository Trust Company
("DTC") by telephone, confirmed in writing (which may include facsimile or
other electronic transmission), by 4:00 p.m., New York City time, on the
Determination Date of the Interest Rate to Maturity applicable to the
ROARS effective from and including the Remarketing Date.
(f) In the event that the ROARS are remarketed as provided
herein, the Remarketing Dealer shall make, or cause the Trustee to make,
payment to the DTC participant of each tendering Beneficial Owner of
ROARS subject to remarketing, by book entry through DTC by the close of
business on the Remarketing Date against delivery through DTC of such
Beneficial Owner's tendered ROARS, of the purchase price for such
tendered ROARS that have been purchased for remarketing by the
Remarketing Dealer. The purchase price of such tendered ROARS shall be
equal to 100% of the aggregate principal amount thereof. The Company
shall make, or cause the Trustee to make, payment of interest to each
Beneficial Owner of ROARS due on the Remarketing Date by book entry
through DTC by the close of business on the Remarketing Date.
(g) Subject to Section 12(c) of this Agreement, in the event that
(i) the Remarketing Dealer for any reason does not notify the Company of
the Interest Rate to Maturity by 4:00 p.m., New York City time, on the
Determination Date, or (ii) prior to the Remarketing Date, the Remarketing
Dealer has resigned and no successor has been appointed on or before the
Determination Date, or (iii) at any time after the Remarketing Dealer elects
on the Notification Date to remarket the ROARS, any event as set forth in
Section 9 or Section 12 of this Agreement shall have occurred, or (iv) the
Remarketing Dealer for any reason does not elect, by notice to the Company
and the Trustee not later than the Notification Date, to purchase the ROARS
for remarketing on the Remarketing Date, or (v) the Remarketing Dealer for
any reason does not purchase all tendered ROARS on the Remarketing Date,
the Company shall repurchase the ROARS as a whole on the Remarketing
Date at a price equal to 100% of the aggregate principal amount of the
ROARS plus all accrued and unpaid interest, if any, on the ROARS to the
Remarketing Date. In any such case, payment will be made by the Company
through the Trustee to the DTC participant of each tendering Beneficial
Owner of ROARS, by book-entry through DTC by the close of business on
the Remarketing Date against delivery through DTC of such Beneficial
Owner's tendered ROARS.
(h) If the Remarketing Dealer elects to remarket the ROARS as
provided in clause (c) above, then not later than the Business Day
immediately preceding the Determination Date, the Company shall notify
the Remarketing Dealer and the Trustee if the Company irrevocably elects to
exercise its right to redeem the ROARS, in whole but not in part, from the
Remarketing Dealer on the Remarketing Date at the Optional Redemption
Price. The "Optional Redemption Price" shall be the greater of (i) 100% of
the aggregate principal amount of the ROARS and (ii) the sum of the present
values of the Remaining Scheduled Payments thereon, as determined by the
Remarketing Dealer, discounted to the Remarketing Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate, plus in either case accrued and unpaid interest from the
Remarketing Date on the principal amount being redeemed to the date of
redemption. If the Company elects to redeem the ROARS, it shall pay the
redemption price therefor in same-day funds by wire transfer to an account
designated by the Remarketing Dealer on the Remarketing Date.
(i) In accordance with the terms and provisions of the ROARS,
the tender and settlement procedures set forth in this Section 4, including
provisions for payment by purchasers of ROARS in the remarketing or for
payment to selling Beneficial Owners of tendered ROARS, shall be subject
to modification, notwithstanding any provision to the contrary set forth in
the Indenture, to the extent required by DTC or, if the book-entry system is
no longer available for the ROARS at the time of the remarketing, to the
extent required to facilitate the tendering and remarketing of ROARS in
certificated form. In addition, the Remarketing Dealer may, notwithstanding
anything to the contrary contained in the Indenture, modify the settlement
procedures set forth in the Indenture and/or the ROARS in order to facilitate
the settlement process.
(j) In accordance with the terms and provisions of the ROARS,
the Company hereby agrees that at all times, notwithstanding any provision
to the contrary set forth in the Indenture, (i) it will use its best efforts to
maintain the ROARS in book-entry form with DTC or any successor thereto
and to appoint a successor depository to the extent necessary to maintain the
ROARS in book-entry form and (ii) it will waive any discretionary right it
otherwise may have under the Indenture to cause the ROARS to be issued in
certificated form.
Section 5. Fees and Expenses. Subject to Section 12 of this
Agreement, for its services in performing its duties set forth herein, the
Remarketing Dealer will not receive any fees or reimbursement of expenses
from the Company.
Section 6. Resignation of the Remarketing Dealer. The
Remarketing Dealer may resign and be discharged from its duties and
obligations hereunder at any time, such resignation to be effective 10
business days after delivery of a written notice to the Company and the
Trustee of such resignation. The Remarketing Dealer also may resign and
be discharged from its duties and obligations hereunder at any time, such
resignation to be effective immediately, upon termination of this Agreement
in accordance with Section 12(b) hereof. It shall be the sole obligation of
the Company to appoint a successor Remarketing Dealer.
Section 7. Dealing in the ROARS; Purchase of ROARS by
the Company.
(a) NMS, when acting as the Remarketing Dealer or in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold and deal in any of the ROARS. NMS, as Holder or Beneficial
Owner of the ROARS, may exercise any vote or join as a Holder or
Beneficial Owner, as the case may be, in any action which any Holder or
Beneficial Owner of ROARS may be entitled to exercise or take pursuant to
the Indenture with like effect as if it did not act in any capacity hereunder.
The Remarketing Dealer, in its capacity either as principal or agent, may
also engage in or have an interest in any financial or other transaction with
the Company as freely as if it did not act in any capacity hereunder.
(b) The Company may purchase ROARS in the remarketing,
provided that the Interest Rate to Maturity established with respect to
ROARS in the remarketing is not different from the Interest Rate to Maturity
that would have been established if the Company had not purchased such
ROARS.
Section 8. Information.
(a) The Company agrees to furnish to the Remarketing Dealer:
(i) copies of each report or other document mailed or filed by the Company
with the Commission, including the Registration Statement and any
Prospectus relating to the ROARS (including in each case any documents
incorporated therein by reference), (ii) notice of the occurrence of any of the
events set forth in clause (c) of Section 9 hereof, and (iii) in connection
with the remarketing, such other information as the Remarketing Dealer may
reasonably request from time to time, in such form as the Remarketing
Dealer may reasonably request, including, but not limited to, the financial
condition of the Company or any material subsidiary thereof. The Company
agrees to provide the Remarketing Dealer with as many copies of the
foregoing materials and information as the Remarketing Dealer may
reasonably request for use in connection with the remarketing and consents
to the use thereof for such purpose.
(b) If, at any time during the term of this Agreement, any event
or condition known to the Company relating to or affecting the Company,
any subsidiary thereof or the ROARS shall occur which might cause any of
the reports, documents, materials or information referred to in clause (i) of
paragraph (a) above or any document incorporated therein by reference
(collectively, the "Remarketing Materials") to include an untrue statement
of a material fact or omit to state a material fact, the Company shall
promptly notify the Remarketing Dealer in writing of the circumstances and
details of such event or condition.
Section 9. Conditions to Remarketing Dealer's Obligations.
The obligations of the Remarketing Dealer under this Agreement have been
undertaken in reliance on, and shall be subject to, (a) the due performance in
all material respects by the Company of its obligations and agreements as set
forth in this Agreement and the accuracy of the representations and
warranties in this Agreement and any certificate delivered pursuant hereto,
(b) the due performance in all material respects by the Company of its
obligations and agreements set forth in, and the accuracy in all material
respects as of the dates specified therein of the representations and
warranties contained in, the Purchase Agreement, and (c) the further
condition that none of the following events shall have occurred after the
Remarketing Dealer elects on the Notification Date to remarket the ROARS:
(i) the rating of any securities of the Company shall have been
down graded or put under surveillance or review with negative
implications, including being put on what is commonly termed a
"watch list," or withdrawn by a nationally recognized statistical rating
agency;
(ii) without the prior written consent of the Remarketing
Dealer, the Indenture (including the ROARS) shall have been
amended in any manner, or otherwise contain any provision not
contained therein as of the date hereof, that in either case in the
judgment of the Remarketing Dealer materially changes the nature of
the ROARS or the remarketing procedures (it being understood that,
notwithstanding the provisions of this clause (ii), the Company shall
not be prohibited from amending the Indenture);
(iii) trading in any securities of the Company shall have been
suspended or materially limited by the Commission, or if trading
generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market shall have been
suspended or materially limited, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices shall
have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority, or if a banking
moratorium shall have been declared by either Federal or New York
authorities;
(iv) there shall have occurred any material adverse change in
the financial markets in the United States, any outbreak of hostilities
or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or
international political, financial or economic conditions, in each case
the effect of which is such as to make it, in the judgment of the
Remarketing Dealer, impracticable to remarket the ROARS or to
enforce contracts for the sale of the ROARS;
(v) an Event of Default, or any event which, with the giving of
notice or passage of time, or both, would constitute an Event of
Default, with respect to the ROARS shall have occurred and be
continuing;
(vi) a material adverse change in the consolidated financial
condition, stockholders' equity or results of operations or business of
the Company and its subsidiaries taken as a whole the effect of which
is such as to make it, in the judgment of the Remarketing Dealer,
impracticable to remarket the ROARS or to enforce contracts for the
sale of the ROARS, shall have occurred since the Notification Date or
since the respective dates as of which information is given in the 1934
Act Documents; or
(vii) if a prospectus is required under the 1933 Act to be
delivered in connection with the remarketing of the ROARS, the
Company shall fail to furnish to the Remarketing Dealer on the
Remarketing Date the officers' certificate, opinion and comfort letter
referred to in Section 3(e) of this Agreement and such other
documents and opinions as counsel for the Remarketing Dealer may
reasonably require for the purpose of enabling such counsel to pass
upon the sale of ROARS in the remarketing as herein contemplated
and related proceedings, or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and the
Remarketing Dealer shall have received on the Remarketing Date a
certificate of the Chairman of the Board, the President, the Chief
Financial Officer, any Vice President or the Treasurer of the
Company, dated as of the Remarketing Date, to the effect that (i) the
representations and warranties in this Agreement are true and correct
with the same force and effect as though expressly made at and as of
the Remarketing Date, (ii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Remarketing Date and (iii) none of the
events specified in the preceding clause (c) has occurred.
(d) In furtherance of the foregoing, the effectiveness of the
Remarketing Dealer's election on the Notification Date to remarket the
ROARS shall be subject to the condition that the Remarketing Dealer shall
have received a certificate of the Chairman of the Board, the President, the
Chief Financial Officer, any Vice President or the Treasurer of the
Company, dated as of the Notification Date, to the effect that (i) the
Company has, prior to the Remarketing Dealer's election on the Notification
Date to remarket the ROARS, provided the Remarketing Dealer with notice
of all events as required under Section 3(a) of this Agreement, (ii) the
representations and warranties in this Agreement are true and correct at and
as of the Notification Date and (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Notification Date. Such certificate shall be
delivered by the Company to the Remarketing Dealer as soon as practicable
following notification by the Remarketing Dealer to the Company on the
Notification Date of its election to remarket the ROARS and in any event
prior to the Determination Date.
In the event of the failure of any of the foregoing conditions, the
Remarketing Dealer may terminate its obligations under this Agreement or
redetermine the Interest Rate to Maturity as provided in Section 12.
Section 10. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Remarketing Dealer and its officers, directors and employees and each
person, if any, who controls the Remarketing Dealer within the meaning of
Section 20 of the 1934 Act as follows:
(i) against any loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) the failure to have an
effective registration statement under the 1933 Act relating to the
ROARS, if required, or the failure to satisfy the prospectus delivery
requirements of the 1933 Act because the Company failed to notify
the Remarketing Dealer of such delivery requirement or failed to
provide the Remarketing Dealer with an updated Prospectus for
delivery, or (B) any untrue statement or alleged untrue statement of a
material fact contained in any of the Remarketing Materials (including
any incorporated documents), or (C) the omission or alleged omission
therefrom of a material fact necessary to make the statements therein,
in the light of the circumstances in which they were made, not
misleading, or (D) any violation by the Company of, or any failure by
the Company to perform any of its obligations under, this Agreement,
or (E) the acts or omissions of the Remarketing Dealer in connection
with its duties and obligations hereunder except to the extent finally
judicially determined to be due to its gross negligence or willful
misconduct;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever arising out of, or based upon,
any of items (A) through (E) in clause (i) above; provided that
(subject to clause (d) below) such settlement is effected with the
written consent of the Company, which consent shall not be
unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Remarketing Dealer), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or
any claim whatsoever arising out of, or based upon, any of items (A)
through (E) in clause (i) above to the extent that any such expense is
not paid under (i) or (ii) above; provided that the foregoing indemnity
shall not apply to any losses, liabilities, claims, damages and expenses
to the extent arising out of any untrue statement or omission made in
reliance upon and in conformity with written information furnished to
the Company by the Remarketing Dealer expressly for use in the
Remarketing Materials.
(b) The Remarketing Dealer agrees to indemnify and hold
harmless the Company, its directors and each of its officers who signed the
Registration Statement from and against any loss, liability, claim, damage
and expense, as incurred, but only with respect to untrue statements or
omissions made in the Remarketing Materials in reliance upon and in
conformity with information furnished to the Company in writing by the
Remarketing Dealer expressly for use in such Remarketing Materials. The
indemnity agreement in this clause (b) shall extend upon the same terms and
conditions to each person, if any, who controls the Company within the
meaning of Section 20 of the 1934 Act.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the
case of parties indemnified pursuant to clause (a) above, counsel to the
indemnified parties shall be selected by NMS, and, in the case of parties
indemnified pursuant to clause (b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may participate at
its own expense in the defense of any such action; provided that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 10 or
Section 11 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission or fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by clause (a) (ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) The indemnity agreements contained in this Section 10
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Remarketing Dealer, and shall
survive the termination or cancellation of this Agreement and the
remarketing of any ROARS hereunder.
Section 11. Contribution. If the indemnification provided for
in Section 10 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Remarketing Dealer on the other hand
from the remarketing of the ROARS pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Remarketing Dealer on the other hand in connection with
the acts, failures to act, statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and
the Remarketing Dealer on the other hand in connection with the
remarketing of the ROARS pursuant to this Agreement shall be deemed to
be in the same respective proportions as (i) the aggregate principal amount
of the ROARS, and (iii) the aggregate positive difference, if any, between
the price paid by the Remarketing Dealer for the ROARS tendered on the
Remarketing Date and the price at which the ROARS are sold by the
Remarketing Dealer in the remarketing.
The relative fault of the Company on the one hand and the
Remarketing Dealer on the other hand shall be determined by reference to,
among other things, the responsibility hereunder of the applicable party for
any act or failure to act relating to the losses, liabilities, claims, damages
or expenses incurred or, in the case of any losses, liabilities, claims, damages
or expenses arising out of any untrue or alleged untrue statement of a material
fact contained in any of the Remarketing Materials or the omission or
alleged omission to state a material fact therefrom, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Remarketing Dealer and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Remarketing Dealer agree that it would not be
just and equitable if contribution pursuant to this Section 11 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this Section 11. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 11 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such act or failure to act or untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 11, the Remarketing
Dealer shall not be required to contribute any amount in excess of the
amount by which the total price at which the ROARS remarketed by it and
resold to the public were sold to the public exceeds the amount of any
damages which the Remarketing Dealer has otherwise been required to pay
by reason of any act or failure to act for which it is responsible hereunder or
any untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 11, each person, if any, who controls the
Remarketing Dealer within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Remarketing Dealer, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company.
Section 12. Termination of Remarketing Agreement or
Redetermination of Interest Rate to Maturity.
(a) This Agreement shall terminate as to the Remarketing
Dealer on the effective date of the resignation of the Remarketing Dealer
pursuant to Section 6 hereof or the repurchase of the ROARS by the
Company pursuant to Section 4(g) hereof or the redemption of the ROARS
by the Company pursuant to Section 4(h) hereof.
(b) In addition, the Remarketing Dealer may terminate all of its
obligations under this Agreement immediately by notifying the Company
and the Trustee of its election to do so, at any time on or before the
Remarketing Date, in the event that: (i) any of the conditions referred to or
set forth in Section 9(a) or (b) hereof have not been met or satisfied in full,
(ii) any of the events set forth in Section 9(c) shall have occurred after the
Remarketing Dealer elects on the Notification Date to remarket the ROARS
or (iii) the Remarketing Dealer determines, in its sole discretion, after
consultation with the Company, that it shall not have received all of the
information, whether or not specifically referenced herein, necessary to
fulfill its obligations under this Agreement.
(c) Notwithstanding any provision herein to the contrary, in
lieu of terminating this Agreement pursuant to Section 12(b) above, upon the
occurrence of any of the events set forth therein, the Remarketing Dealer, in
its sole discretion at any time between the Determination Date and 3:30
p.m., New York City time, on the Business Day immediately preceding the
Remarketing Date, may elect to purchase the ROARS for remarketing and
determine a new Interest Rate to Maturity in the manner provided in
Section 4(d) of this Agreement, except that for purposes of determining the
new Interest Rate to Maturity pursuant to this paragraph the Determination
Date referred to therein shall be the date of such election and
redetermination. The Remarketing Dealer shall notify the Company, the
Trustee and DTC by telephone, confirmed in writing (which may include
facsimile or other electronic transmission), by 4:00 p.m., New York City
time, on the date of such election, of the new Interest Rate to Maturity
applicable to the ROARS. Thereupon, such new Interest Rate to Maturity
shall supersede and replace any Interest Rate to Maturity previously
determined by the Remarketing Dealer and, absent manifest error, shall be
binding and conclusive upon the Beneficial Owners and Holders of the
ROARS on and after the Remarketing Date, the Company and the Trustee;
provided that the Remarketing Dealer, by redetermining the Interest Rate to
Maturity upon the occurrence of any event set forth in Section 12(b) as set
forth above, shall not thereby be deemed to have waived its right to
determine a new Interest Rate to Maturity or terminate this Agreement upon
the occurrence of any other event set forth in Section 12(b).
(d) If this Agreement is terminated pursuant to this Section 12,
such termination shall be without liability of any party to any other party,
except that, in the case of termination pursuant to Section 12(b) of this
Agreement, the Company shall reimburse the Remarketing Dealer for all of
its reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Remarketing Dealer, and except further as
set forth in Section 12(e) below. Sections 1, 10, 11, 12(d) and 12(e) shall
survive such termination and remain in full force and effect.
(e) In the case of either (i) termination of this Agreement
pursuant to Section 12(b) or (ii) the occurrence, prior to the Remarketing
Dealer's election on the Notification Date to remarket the ROARS, of any
event set forth in Section 9(c)(ii) or (v), upon the request of the Remarketing
Dealer, the Company shall immediately following the Call Price
Determination Date (as defined below) pay the Remarketing Dealer, in
same-day funds by wire transfer to an account designated by the
Remarketing Dealer, the fair market value, calculated as set forth below, of
the Remarketing Dealer's right to purchase and remarket the ROARS
pursuant to this Agreement (the "Call Price").
In the case of termination of this Agreement pursuant to
Section 12(b), the Call Price shall be equal to the excess of (i) the present
value of the Remaining Scheduled Payments determined as provided in
Section 4 over (ii) the aggregate principal amount of the ROARS.
In the case of the occurrence, prior to the Remarketing Dealer's
election on the Notification Date to remarket the ROARS, of any event set
forth in Section 9(c)(ii) or (v), the Call Price shall be determined in good
faith by the Remarketing Dealer on a commercially reasonable basis by
reference to, among other factors, the formulation set forth in the preceding
paragraph.
The Remarketing Dealer shall determine the applicable Call Price on
the Business Day immediately following the date of termination or
notification of the occurrence, prior to the Remarketing Dealer's election on
the Notification Date to remarket the ROARS, of any event set forth in
Section 9(c)(ii) or (v), as the case may be, or as soon as practicable
thereafter (the "Call Price Determination Date"). The Remarketing Dealer
shall promptly notify the Company of the Call Price Determination Date and
the Call Price by telephone, confirmed in writing (which may include
facsimile or other electronic transmission). The Call Price, absent manifest
error, shall be binding and conclusive upon the parties hereto.
(f) This Agreement shall not be subject to termination by the
Company.
Section 13. Remarketing Dealer's Performance; Duty of
Care. The duties and obligations of the Remarketing Dealer shall be
determined solely by the express provisions of this Agreement and the
Indenture. No implied covenants or obligations of or against the
Remarketing Dealer shall be read into this Agreement or the Indenture. In
the absence of bad faith on the part of the Remarketing Dealer, the
Remarketing Dealer may conclusively rely upon any document furnished to
it, which purports to conform to the requirements of this Agreement and the
Indenture, as to the truth of the statements expressed in any of such
documents. The Remarketing Dealer shall be protected in acting upon any
document or communication reasonably believed by it to have been signed,
presented or made by the proper party or parties. The Remarketing Dealer
shall incur no liability to the Company or to any Beneficial Owner or Holder
of ROARS in its individual capacity or as Remarketing Dealer for any action
or failure to act in connection with the remarketing or otherwise, except as a
result of gross negligence or willful misconduct on its part.
Section 14. GOVERNING LAW. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 15. Term of Agreement. Unless otherwise terminated
in accordance with the provisions hereof, this Agreement shall remain in full
force and effect from the date hereof until the earlier of the first day
thereafter on which no ROARS are outstanding or the completion of the
remarketing of the ROARS. Regardless of any termination of this
Agreement pursuant to any of the provisions hereof, the obligations of the
Company pursuant to Sections 10, 11 and 12 hereof shall remain operative
and in full force and effect until fully satisfied.
Section 16. Successors and Assigns. The rights and
obligations of the Company hereunder may not be assigned or delegated to
any other person without the prior written consent of the Remarketing
Dealer. The rights and obligations of the Remarketing Dealer hereunder
may not be assigned or delegated to any other person without the prior
written consent of the Company. This Agreement shall inure to the benefit
of and be binding upon the Company and the Remarketing Dealer and their
respective successors and assigns, and will not confer any benefit upon any
other person, partnership, association or corporation other than persons, if
any, controlling the Remarketing Dealer within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, or any indemnified party to the
extent provided in Section 10 hereof, or any person entitled to contribution
to the extent provided in Section 11 hereof. The terms "successors" and
"assigns" shall not include any purchaser of any ROARS merely because of
such purchase.
Section 17. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and will not be
used in the interpretation of any provisions of this Agreement.
Section 18. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provision of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatsoever.
Section 19. Counterparts. This Agreement may be executed
in several counterparts, each of which shall be regarded as an original and all
of which shall constitute one and the same document.
Section 20. Amendments. This Agreement may be amended
by any instrument in writing signed by each of the parties hereto so long as
this Agreement as amended is not inconsistent with the Indenture in effect as
of the date of any such amendment.
Section 21. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or
pursuant hereto shall be made in writing (which may include facsimile or
other electronic transmission) and shall be deemed to have been validly
given or made when delivered or mailed, registered or certified mail, return
receipt requested and postage prepaid, addressed as follows:
(a) to the Company:
IBP, inc.
IBP Avenue
Post Office Box 515
Dakota City, Nebraska 68731
Telephone: 402-241-2041
Facsimile: 402-241-2404
Attention: Treasurer
(b) to NMS:
NationsBanc Montgomery Securities LLC
100 North Tryon Street
Charlotte, North Carolina 28255
Telephone: 704-386-9690
Facsimile: 704-388-0502
Attention: Syndicate
or to such other address as the Company or the Remarketing Dealer shall
specify in writing.
IN WITNESS WHEREOF, each of the Company and the
Remarketing Dealer has caused this Remarketing Agreement to be executed
in its name and on its behalf by one of its duly authorized officers as of the
date first above written.
IBP, INC.
By /s/ John N. Borgh
Title: Vice President and Treasurer
NATIONSBANC MONTGOMERY
SECURITIES LLC
By /s/ Lynn T. McConnell
Title: Senior Vice President &
Director
/Service Mark of NationsBanc Montgomery Securities LLC
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