SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 13, 1997 (May 9, 1997)
LOWE'S COMPANIES, INC.
(Exact name of registrant as specified in charter)
North Carolina 0-94 56-0578072
(State or other (Commission (IRS Employer
jurisdiction of File Number Identification No.)
incorporation)
P.O. Box 1111
North Wilkesboro, North Carolina 28656-0001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (910) 651-4000
Not Applicable
(former name or former address if changed since last report)
Page 1 of 4 pages.
Exhibit Index appears on page 4.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibits are filed in connection with the Registrant's
offering from time to time of its Medium-Term Notes, Series B (the "Notes"), at
an aggregate initial offering price not to exceed $350,000,000 pursuant to its
Registration Statements on Form S-3 (File Nos. 33-51865 and 333-14257). The
Notes will be issued under the Amended and Restated Indenture, dated December 1,
1995, between the Registrant and The First National Bank of Chicago, as trustee,
which Indenture is filed as an exhibit to the Current Report on Form 8-K filed
by the Registrant on December 15, 1995. The offering is made only by means of a
prospectus.
Exhibits
1.1 Distribution Agreement, dated May 9, 1997, among Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Lehman Brothers Inc., Morgan Stanley & Co.
Incorporated and Lowe's Companies, Inc.
1.2 Administrative Procedures for Fixed Rate and Floating Rate
Medium-Term Notes, dated as of May 9, 1997.
4.1 Amended and Restated Indenture, dated December 1, 1995,
between Lowe's Companies, Inc. and The First National Bank of
Chicago, as trustee (filed as Exhibit 4.1 to the Current
Report on Form 8-K of Lowe's Companies, Inc., filed on
December 15, 1995, and incorporated by reference herein).
4.2 Form of Lowe's Companies, Inc. Floating Rate Medium-Term Note,
Series B.
4.3 Form of Lowe's Companies, Inc. Fixed Rate Medium-Term Note,
Series B.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LOWE'S COMPANIES, INC.
Date: May 13, 1997 /s/ Robert A. Niblock
------------------------
Name: Robert A. Niblock
Title: Vice President and Treasurer
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EXHIBIT INDEX
1.1 Distribution Agreement, dated May 9, 1997, among Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Lehman Brothers Inc., Morgan Stanley & Co.
Incorporated and Lowe's Companies, Inc.
1.2 Administrative Procedures for Fixed and Floating Rate
Medium-Term Notes, dated as of May 9, 1997.
4.1 Amended and Restated Indenture, dated December 1, 1995,
between Lowe's Companies, Inc. and The First National Bank of
Chicago, as trustee (filed as Exhibit 4.1 to the Current
Report on Form 8-K of Lowe's Companies, Inc., filed on
December 15, 1995, and incorporated by reference herein).
4.2 Form of Lowe's Companies, Inc. Floating Rate Medium-Term Note,
Series B.
4.3 Form of Lowe's Companies, Inc. Fixed Rate Medium-Term Note,
Series B.
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Exhibit 1.1
LOWE'S COMPANIES, INC.
Medium-Term Notes, Series B
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
May 9, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
LEHMAN BROTHERS INC.
3 World Financial Center
200 Vesey Street
New York, New York 10285
MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
2nd Floor
New York, NY 10036
Dear Sirs:
Lowe's Companies, Inc., a North Carolina corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Lehman Brothers Inc. and Morgan Stanley &
Co. Incorporated (each, an "Agent", and collectively, the "Agents") with respect
to the issue and sale by the Company of its Medium-Term Notes, Series B, Due
Nine Months or More From Date of Issue (the "Notes"). The Notes are to be issued
pursuant to the Amended and Restated Indenture, dated as of December 1, 1995, as
further amended or modified from time to time (the "Indenture"), between the
Company and The First National Bank of Chicago, as trustee (the "Trustee"). As
of the date hereof, the Company has authorized the issuance and sale of up to
U.S. $350,000,000 aggregate initial offering price of Notes to or through the
Agents pursuant to the terms of this Agreement. It is understood, however, that
the Company may from time to time authorize the issuance of additional Notes and
that such additional Notes may be sold to or through the Agents pursuant to the
terms of this Agreement, all as though the issuance of such Notes were
authorized as of the date hereof.
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This Agreement provides both for the sale of Notes by the
Company to one or more Agents as principal for resale to investors and other
purchasers and for the sale of Notes by the Company directly to investors (as
may from time to time be agreed to by the Company and the applicable Agent), in
which case the applicable Agent will act as an agent of the Company in
soliciting offers for the purchase of Notes.
The Company has filed with the Securities and Exchange
Commission (the "Commission") registration statements on Form S-3 (Nos. 33-51865
and 333-14257) for the registration of unsecured debt securities, including the
Notes, under the Securities Act of 1933, as amended (the "1933 Act"), and the
offering thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
and the Company has filed such post-effective amendments thereto as may be
required prior to any acceptance by the Company of an offer for the purchase of
Notes. Such registration statements (as so amended, if applicable) have been
declared effective by the Commission and the Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such
registration statements (as so amended, if applicable) are referred to herein as
the "Registration Statement"; and the final prospectus and all applicable
amendments or supplements thereto (including the final prospectus supplement and
pricing supplement relating to the offering of Notes), in the form first
furnished to the applicable Agent(s), are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to any acceptance by the Company of an
offer for the purchase of Notes; provided further that, if the Company files a
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Regulations (the "Rule 462(b) Registration Statement"), then, after such
filing, all references to the "Registration Statement" shall also be deemed to
include the Rule 462(b) Registration Statement. A "preliminary prospectus" shall
be deemed to refer to any prospectus used before the registration statement
became effective and any prospectus furnished by the Company after the
registration statement became effective and before any acceptance by the Company
of an offer for the purchase of Notes which omitted information to be included
upon pricing in a form of prospectus filed with the Commission pursuant to Rule
424(b) of the 1933 Act Regulations. For purposes of this Agreement, all
references to the Registration Statement, Prospectus or preliminary prospectus
or to any amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "disclosed", "contained", "included" or
"stated" (or other references of like import) in the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, Prospectus or preliminary
prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to include the filing of any document
under the 1934 Act which is incorporated by reference in the Registration
Statement, Prospectus or preliminary prospectus, as the case may be.
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SECTION 1. Appointment as Agent
(a) Appointment. Subject to the terms and conditions stated
herein and to subject to the reservation by the Company of the right to sell
Notes directly to purchasers on its own behalf or through other agents, as set
forth below in this subsection (a), and the provisions contained in Section
12(a) hereof, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company. The Company may from time to time offer Notes for sale otherwise than
through an Agent; provided, however, that so long as this Agreement shall be in
effect the Company shall not solicit offers to purchase Notes through any agent
without (x) amending this Agreement to appoint such agent an additional Agent
hereunder on the same terms and conditions as provided herein for the Agents and
(y) giving the Agents prompt notice of such appointment. If the Company sells
any Notes directly to purchasers on its own behalf and not through an agent, the
Company shall not be obligated to pay a commission. The Company may accept
offers to purchase Notes through an agent other than an Agent, provided that (i)
the Company shall not have solicited such offers, (ii) the Company and such
agent shall have executed an agreement with respect to such purchases having
terms and conditions (including, without limitation, commission rates) with
respect to such purchases substantially the same as the terms and conditions
that would apply to such purchases under this Agreement if such agent were an
Agent (which may be accomplished by incorporating by reference in such agreement
the terms and conditions of this Agreement) and (iii) the Company shall provide
the Agents with a copy of such agreement promptly following the execution
thereof.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial offering price of Notes registered pursuant to the
Registration Statement. The Agents shall have no responsibility for maintaining
records with respect to the aggregate initial offering price of Notes sold, or
of otherwise monitoring the availability of Notes for sale, under the
Registration Statement.
(c) Purchases as Principal. The Agents shall not have any
obligation to purchase Notes from the Company as principal. However, absent an
agreement between an Agent and the Company that such Agent shall be acting
solely as an agent for the Company, such Agent shall be deemed to be acting as
principal in connection with any offering of Notes by the Company through such
Agent. Accordingly, the Agents, individually or in a syndicate, may agree from
time to time to purchase Notes from the Company as principal for resale to
investors and other purchasers determined by such Agents. Any purchase of Notes
from the Company by an Agent as principal shall be made in accordance with
Section 3(a) hereof.
(d) Solicitations as Agent. If agreed upon between an Agent
and the Company, such Agent, acting solely as an agent for the Company and not
as principal, will solicit offers for the purchase of Notes. Such Agent will
communicate to the Company, orally, each offer for the purchase of Notes
solicited by it on an agency basis other than those offers rejected by such
Agent. Such Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or
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in part, and any such rejection shall not be deemed a breach of its agreement
contained herein. The Company may accept or reject any offer for the purchase of
Notes, in whole or in part. Such Agent shall make reasonable best efforts to
assist the Company in obtaining performance by each purchaser whose offer for
the purchase of Notes has been solicited by it on an agency basis and accepted
by the Company. Such Agent shall not have any liability to the Company in the
event that any such purchase is not consummated for any reason. If the Company
shall default on its obligation to deliver Notes to a purchaser whose offer has
been solicited by such Agent on an agency basis and accepted by the Company, the
Company shall (i) hold such Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii) pay to such
Agent any commission to which it would otherwise be entitled absent such
default.
(e) Reliance. The Company and the Agents agree that any Notes
purchased from the Company by one or more Agents as principal shall be
purchased, and any Notes the placement of which an Agent arranges as an agent of
the Company shall be placed by such Agent, in reliance on the representations,
warranties, covenants and agreements of the Company contained herein and on the
terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties
(a) The Company represents and warrants to each Agent as of
the date hereof, as of the date of each acceptance by the Company of an offer
for the purchase of Notes (whether to such Agent as principal or through such
Agent as agent), as of the date of each delivery of Notes (whether to such Agent
as principal or through such Agent as agent) (the date of each such delivery to
such Agent as principal is referred to herein as a "Settlement Date"), and as of
any time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of
the Company. The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of North
Carolina with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus and to enter into this Agreement and consummate the
transactions contemplated in the Prospectus; the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in
good standing would not result in a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the
Company and its subsidiaries, considered as one enterprise (a "Material
Adverse Effect"); all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable; no holder thereof is or will be subject to personal
liability by reason of being such a holder; and none of the outstanding
shares of capital stock of the Company issued since December 19, 1979
was issued in violation of preemptive rights of any securityholder of
the Company.
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(ii) Due Incorporation, Good Standing and Due Qualification of
Significant Subsidiaries. Each of Lowe's Home Centers, Inc., a North
Carolina corporation, LF Corporation, a Delaware corporation, and The
Contractor Yard, Inc., a North Carolina corporation (collectively, the
"Significant Subsidiaries"; "subsidiaries" has the meaning set forth in
Rule 405 under the 1933 Act), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority under such laws to
own, lease and operate its properties and conduct its business as
described in the Prospectus; and each Significant Subsidiary is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property
of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a Material Adverse
Effect. All of the outstanding shares of capital stock of each
Significant Subsidiary have been duly authorized and validly issued and
are fully paid and non-assessable and are owned by the Company,
directly or through one or more Significant Subsidiaries, free and
clear of any mortgage, pledge, lien, security interest, claim, charge,
equity or encumbrance of any kind.
(iii) Registration Statement and Prospectus. The Company meets
the requirements for use of Form S-3 under the 1933 Act; the
Registration Statement (including any Rule 462(b) Registration
Statement) has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement (including
any Rule 462(b) Registration Statement) has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with; the Indenture has been
duly qualified under the 1939 Act; at the respective times that the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto (including the filing of the Company's
most recent Annual Report on Form 10-K with the Commission (the "Annual
Report on Form 10-K")) became effective and at each Representation
Date, the Registration Statement (including any Rule 462(b)
Registration Statement) and any amendments thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied
when so filed in all material respects with the 1933 Act Regulations;
each preliminary prospectus and the Prospectus delivered to the
applicable Agent(s) for use in connection with the offering of Notes
are identical to any electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T; and at the date hereof, at the date of the
Prospectus and at each Representation Date, neither the Prospectus nor
any amendment or supplement thereto included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the
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representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by or on behalf of the Agents,
directly or through you, expressly for use in the Registration
Statement or the Prospectus.
(iv) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission under the 1934 Act (the
"1934 Act Regulations") and, when read together with the other
information in the Prospectus, at the date hereof, at the date of the
Prospectus and at each Representation Date, did not and 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.
(v) Independent Accountants. Deloitte & Touche, LLP ("Deloitte
& Touche"), who have reported upon the audited financial statements and
schedules included or incorporated by reference in the Registration
Statement and the Prospectus, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial
statements of the Company included or incorporated by reference in the
Registration Statement and the Prospectus, together with the related
schedules and notes present fairly the consolidated financial position
of the Company and its subsidiaries at the dates indicated and the
consolidated results of operations, and the consolidated cash flows of
the Company and its subsidiaries for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved; the financial statement schedules, if
any, included in the Registration Statement and the Prospectus present
fairly the consolidated information required to be stated therein; the
selected financial data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited consolidated financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus.
(vii) No Material Changes. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein or contemplated thereby,
there has not been any (1) material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business,
(2) transaction entered into by the Company or any subsidiary, other
than in the ordinary course of business, that is material to the
Company and its subsidiaries, considered as one enterprise, or (3)
dividend (other than ordinary quarterly dividends declared, paid or
made in the ordinary course of business) or distribution of any kind
declared, paid or made by the Company on its capital stock.
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(viii) Authorization, Etc., of this Agreement, the Indenture
and the Notes. This Agreement has been duly authorized, executed and
delivered by the Company; the Indenture has been duly authorized,
executed and delivered by the Company and will be a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally, and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law); the Notes have been duly authorized by the
Company for offer, sale, issuance and delivery pursuant to this
Agreement and, when executed, authenticated, issued and delivered in
the manner provided for in the Indenture and delivered against payment
of the consideration therefor, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally, and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law); the Notes will be substantially in a form
previously certified to the Agents and contemplated by the Indenture;
and each holder of Notes will be entitled to the benefits of the
Indenture.
(ix) Descriptions of the Indenture and the Notes. The
Indenture and the Notes conform and will conform in all material
respects to the statements relating thereto contained in the Prospectus
and are substantially in the form filed or incorporated by reference,
as the case may be, as exhibits to the Registration Statement.
(x) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any Significant Subsidiary is in violation of the provisions of its
charter or by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which it is a party or by which it may be
bound or to which any of its properties may be subject (collectively,
"Agreements and Instruments"), except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the Notes and any other
agreement or instrument entered into or issued or to be entered into or
issued by the Company in connection with the transactions contemplated
by the Prospectus, the consummation of the transactions contemplated in
the Prospectus (including the issuance and sale of the Notes and the
use of proceeds therefrom as described in the Prospectus) and the
compliance by the Company with its obligations hereunder and under the
Indenture, the Notes and such other agreements or instruments have been
duly authorized by all necessary corporate action and do not and will
not,
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whether with or without the giving of notice or the passage of time or
both, conflict with or constitute a breach of, or default or event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any of its
subsidiaries (a "Repayment Event") under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Significant Subsidiary pursuant to, any
Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect, nor will such action result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Significant Subsidiary or any of its respective
properties.
(xii) Absence of Labor Disputes. To the best knowledge of the
Company, no labor problem exists with its employees or with employees
of the Significant Subsidiaries or is imminent that could have a
Material Adverse Effect, and the Company is not actually aware of any
existing or imminent labor disturbance by the employees of any of its
or the Significant Subsidiaries' principal suppliers, contractors or
customers that could be expected to have a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit or
proceeding, before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened against the Company or any Significant Subsidiary that is
required to be disclosed in the Registration Statement and the
Prospectus (other than as stated therein), or that could result in a
Material Adverse Effect, or that could materially and adversely affect
the properties or assets of the Company and its subsidiaries,
considered as one enterprise, the performance by the Company of its
obligations under this Agreement, the Indenture and the Notes or the
consummation of the transactions contemplated in the Prospectus; and
the aggregate of all pending legal or governmental proceedings that are
not described in the Registration Statement and the Prospectus to which
the Company or any Significant Subsidiary is a party or which affect
any of its respective properties, including ordinary routine litigation
incidental to the business of the Company or any Significant
Subsidiary, would not have a Material Adverse Effect.
(xiv) Possession of Intellectual Property. The Company and the
Significant Subsidiaries each owns or possesses, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
trademarks, service marks or trade names (collectively, "Intellectual
Property") necessary to carry on its business as presently conducted,
and neither the Company nor any of its Significant Subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property that in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could have a Material Adverse
Effect.
(xv) Possession of Licenses and Permits. The Company and the
Significant Subsidiaries each owns, possesses or has obtained all
material governmental licenses, permits, certificates,
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consents, orders, approvals and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to own or
lease, as the case may be, and to operate its properties and to carry
on its business as presently conducted (other than such Governmental
Licenses, that, if neither owned, possessed nor obtained, would not
have a material adverse effect on the business of the Company and its
subsidiaries, considered as one enterprise), and neither the Company
nor any Significant Subsidiary has received any notice of proceedings
relating to revocation or modification of any such Governmental
Licenses.
(xvi) Environmental Laws. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would not,
individually or in the aggregate, have a Material Adverse Effect, (A)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and the Significant Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of the Significant Subsidiaries and (D)
there are no events or circumstances that may reasonably be expected to
form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(xvii) No Filings, Regulatory Approvals, Etc. No filing with,
or approval, authorization, consent, license, registration,
qualification, order or decree of, any court or governmental authority
or agency, domestic or foreign, is necessary or required for the
performance by the Company of its obligations under this Agreement, the
Indenture and the Notes or in connection with the transactions
contemplated in the Prospectus, except such as have been previously
obtained or rendered, as the case may be.
(xviii) Market Manipulation or Stabilization Practices. The
Company has not taken and will not take, directly or indirectly, any
action designed to, or that might be reasonably expected to, cause or
result in stabilization or manipulation of the price of the Notes.
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(xix) Commodity Exchange Act. The Notes, upon issuance, will
be excluded or exempted under, or beyond the purview of, the Commodity
Exchange Act, as amended (the "Commodity Exchange Act"), and the rules
and regulations of the Commodity Futures Trading Commission under the
Commodity Exchange Act (the "Commodity Exchange Act Regulations").
(xx) Additional Certifications. Any certificate signed by any
officer of the Company or any Significant Subsidiary and delivered to
one or more Agents or to counsel for the Agents in connection with an
offering of Notes to one or more Agents as principal or through an
Agent as agent shall be deemed a representation and warranty by the
Company to such Agent or Agents as to the matters covered thereby on
the date of such certificate and, unless subsequently amended or
supplemented, at each Representation Date subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent
(a) Purchases as Principal. Notes purchased from the Company
by the Agents, individually or in a syndicate, as principal shall be made in
accordance with terms agreed upon between such Agent or Agents and the Company
(which terms, unless otherwise agreed, shall, to the extent applicable, include
those terms specified in Exhibit A hereto and shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the
Company). An Agent's commitment to purchase Notes 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. Unless the context otherwise requires, references herein to "this
Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto. The
Agents may engage the services of any broker or dealer in connection with the
resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes from
the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement
pursuant to which such Agents agree to purchase Notes from the Company as
principal and one or more of such Agents shall fail at the Settlement Date to
purchase the Notes which it or they are obligated to purchase (the "Defaulted
Notes"), then the nondefaulting Agents shall have the right, within 24 hours
thereafter, to make arrangements for one of them or one or more other Agents or
underwriters to purchase all, but not less than all, of the Defaulted Notes in
such amounts as may be agreed upon and upon the terms herein set forth;
provided, however, that if such arrangements shall not have been completed
within such 24-hour period, then:
(i) if the aggregate principal amount of Defaulted Notes does
not exceed 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement
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Date, the nondefaulting Agents shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective initial underwriting obligations bear to the
underwriting obligations of all nondefaulting Agents; or
(ii) if the aggregate principal amount of Defaulted Notes
exceeds 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, such agreement
shall terminate without liability on the part of any nondefaulting
Agent.
No action taken pursuant to this paragraph shall relieve any
defaulting Agent from liability in respect of its default. In the event of any
such default which does not result in a termination of such agreement, either
the nondefaulting Agents or the Company shall have the right to postpone the
Settlement Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
(b) Solicitations as Agent. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, when agreed by the Company and an Agent, such
Agent, as an agent of the Company, will use its reasonable best efforts to
solicit offers for the purchase of Notes upon the terms set forth in the
Prospectus. The Agents are not authorized to appoint sub-agents with respect to
Notes sold through them as agent. All Notes sold through an Agent as agent will
be sold at 100% of their principal amount unless otherwise agreed upon between
the Company and such Agent.
The Company reserves the right, in its sole discretion, to
suspend solicitation of offers for the purchase of Notes through an Agent, as an
agent of the Company, commencing at any time for any period of time or
permanently. As soon as practicable after receipt of instructions from the
Company, such Agent will suspend solicitation of offers for the purchase of
Notes from the Company until such time as the Company has advised such Agent
that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form
of a discount, equal to the applicable percentage of the principal amount of
each Note sold by the Company as a result of a solicitation made by such Agent,
as an agent of the Company, as set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest
rate or formula, maturity date and other terms of the Notes specified in Exhibit
A hereto (as applicable) shall be agreed upon between the Company and the
applicable Agent(s) and specified in a pricing supplement to the Prospectus
(each, a "Pricing Supplement") to be prepared by the Company in connection with
each sale of Notes. Except as otherwise specified in the applicable Pricing
Supplement, the Notes will be issued in denominations of U.S. $1,000 or any
larger amount that is an integral multiple of U.S. $1,000. Administrative
procedures with respect to the issuance and sale of the Notes (the "Procedures")
shall be agreed upon from time to time among the Company, the Agents and the
Trustee. The Agents and the Company agree to perform, and the Company agrees to
cause the Trustee to agree to perform, their respective duties and obligations
specifically provided to be performed by them in the Procedures.
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SECTION 4. Covenants of the Company
The Company covenants and agrees with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the
Agents immediately, and confirm such notice in writing, of (i) the effectiveness
of any post-effective amendment to the Registration Statement or the filing of
any amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, or of any order preventing or suspending the use of
any preliminary prospectus, or of the initiation of any proceedings for that
purpose or (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Medium-Term Note Program under which the
Notes are issued (the "Program") or any debt securities (including the Notes) of
the Company, or the public announcement by any nationally recognized statistical
rating organization that it has under surveillance or review, with possible
negative implications, its rating of the Program or any such debt securities, or
the withdrawal by any nationally recognized statistical rating organization of
its rating of the Program or any such debt securities. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing or Use of Amendments. The Company will give the
Agents advance notice of its intention to file or prepare any additional
registration statement with respect to the registration of additional Notes, any
amendment to the Registration Statement (including any filing under Rule 462(b)
of the 1933 Act Regulations) or any amendment or supplement to the prospectus
included in the Registration Statement at the time it became effective or to the
Prospectus (other than an amendment or supplement thereto providing solely for
the determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish to the Agents copies of any such
document a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such document to which the Agents or
counsel for the Agents shall reasonably object.
(c) Delivery of the Registration Statement. The Company has
furnished to each Agent and to counsel for the Agents, without charge, signed
and conformed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed and conformed copies of all consents and
certificates of experts. The Registration Statement and each amendment thereto
furnished to the Agents will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
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(d) Delivery of the Prospectus. The Company will deliver to
each Agent, without charge, as many copies of each preliminary prospectus as
such Agent may reasonably request, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to
each Agent, without charge, such number of copies of the Prospectus (as amended
or supplemented) as such Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agents will be identical to
any electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will
prepare, with respect to any Notes to be sold to or through one or more Agents
pursuant to this Agreement, a Pricing Supplement with respect to such Notes in a
form previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b) under
the 1933 Act not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is first used.
(f) Revisions of Prospectus; Material Changes. Except as
otherwise provided in subsection (n) of this Section 4, if at any time during
the term of this Agreement any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the Agents or
counsel for the Company, to amend the Registration Statement in order that the
Registration Statement 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 or to amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement 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 the Prospectus is delivered to a purchaser, or if it shall be
necessary, in the opinion of either such counsel, to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company shall give
immediate notice, confirmed in writing, to the Agents to cease the solicitation
of offers for the purchase of Notes in their capacity as agents and to cease
sales of any Notes they may then own as principal, and the Company will promptly
prepare and file with the Commission, subject to Section 4(b) hereof, such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement and Prospectus comply with such
requirements, and the Company will furnish to the Agents, without charge, such
number of copies of such amendment or supplement as the Agents may reasonably
request. In addition, the Company will comply with the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of each offering of Notes.
(g) Prospectus Revisions; Periodic Financial Information.
Except as otherwise provided in subsection (n) of this Section 4, 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
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to be amended or supplemented to include financial information with respect
thereto and corresponding information for the comparable period of the preceding
fiscal year, as well as such other information and explanations as shall be
necessary for an understanding thereof or as shall be required by the 1933 Act
or the 1933 Act Regulations.
(h) Prospectus Revisions; Audited Financial Information.
Except as otherwise provided in subsection (n) of this Section 4, on or prior to
the date on which there shall be released to the general public financial
information included in or derived from the audited consolidated financial
statements of the Company for the preceding 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 such audited
consolidated financial statements and the report or reports, and consent or
consents to such inclusion, of the independent accountants with respect thereto,
as well as such other information and explanations as shall be necessary for an
understanding of such consolidated financial statements or as shall be required
by the 1933 Act or the 1933 Act Regulations.
(i) Earnings Statements. The Company will timely file such
reports pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings statement
for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(j) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act, will file
all documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) Restriction on Offers and Sales of Securities. Unless
otherwise agreed upon between one or more Agents acting as principal and the
Company, between the date of the agreement by such Agent(s) to purchase the
related Notes from the Company and the Settlement Date with respect thereto, the
Company will not, without the prior written consent of such Agent(s), issue,
sell, offer or contract to sell, grant any option for the sale of, or otherwise
dispose of, any debt securities of the Company (other than the Notes that are to
be sold pursuant to such agreement or commercial paper in the ordinary course of
business).
(l) Ratings. Prior to the offer or solicitation of any offers
for sale of any Notes, the Company shall obtain a rating from each of Moody's
Investors Service, Inc. and Standard & Poor's Ratings Service concerning the
Notes. The Company will thereafter notify the Agents immediately (and confirm
such notice in writing) of any change in either of such ratings pursuant to
subsection (a)(v) of this Section 4.
(m) Use of Proceeds. The Company will use the net proceeds
received by it from the issuance and sale of the Notes in the manner specified
in the Prospectus.
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(n) Suspension of Certain Obligations. The Company shall not
be required to comply with the provisions of subsection (f), (g) or (h) of this
Section 4 during any period from the time (i) the Agents shall have suspended
solicitation of offers for the purchase of Notes in their capacity as agents
pursuant to a request from the Company and (ii) no Agent shall then hold any
Notes purchased from the Company as principal, as the case may be, until the
time the Company shall determine that solicitation of offers for the purchase of
Notes should be resumed or an Agent shall subsequently purchase Notes from the
Company as principal.
SECTION 5. Conditions of Agents' Obligations
The obligations of one or more Agents to purchase Notes from
the Company as principal and to solicit offers for the purchase of Notes as an
agent of the Company, and the obligations of any purchasers of Notes sold
through an Agent as an agent of the Company, will be subject to the accuracy of
the representations and warranties on the part of the Company herein contained
or contained in any certificate of an officer of the Company or any of its
Significant Subsidiaries delivered pursuant to the provisions hereof, to the
performance and observance by the Company of its covenants and other obligations
hereunder, and to the following additional conditions precedent:
(a) Effectiveness of Registration Statement. The Registration
Statement (including any Rule 462(b) Registration Statement) is
effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act and no proceedings for that purpose shall have been
instituted or shall be pending or threatened by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to
the Agents.
(b) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and
in form and substance satisfactory to the Agents:
(1) Opinion of Counsel for the Company. The favorable
opinion of (a) William C. Warden, Jr., Executive Vice
President, General Counsel, Chief Administrative Officer and
Secretary of the Company, to the effect set forth in Exhibit B
hereto and to such further effect as the Agents may reasonably
request, and (b) Hunton & Williams, counsel for the Company,
to the effect set forth in Exhibit C hereto and to such
further effect as the Agents may reasonably request, both in
form and substance satisfactory to counsel for the Agents,
together with signed or reproduced copies of each such opinion
for each of the Agents.
(2) Opinion of Counsel for the Agents. The favorable
opinion of Shearman & Sterling, counsel for the Agents, with
respect to the matters set forth in Sections 2, 3, 5 and 6 and
subsections (i) and (ii) of the penultimate paragraph of
Exhibit C hereto.
(c) Officer's Certificate. On the date hereof, there shall not
have been, since the respective dates as of which information is given
in the Prospectus, any material adverse change in
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the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the Agents shall have received a certificate of
the President or a Vice President of the Company and of the Treasurer,
Assistant Treasurer, or Controller of the Company, dated as of the date
hereof, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties of the Company herein
contained are true and correct with the same force and effect as though
expressly made at and as of the date of such certificate, (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 date of
such certificate, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or, to the best of
such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of Deloitte & Touche. On the date hereof,
the Agents shall have received a letter from Deloitte & Touche, dated
as of the date hereof and in form and substance satisfactory to the
Agents, to the effect set forth in Exhibit D hereto.
(e) Additional Documents. On the date hereof, counsel to the
Agents shall have been furnished with such documents and opinions as
such counsel may require for the purpose of enabling such counsel to
pass upon the issuance and sale of Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of Notes as herein
contemplated shall be satisfactory in form and substance to the Agents
and to counsel to the Agents.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the applicable Agent or Agents by notice to the Company at any
time and any such termination shall be without liability of any party to any
other party except as provided in Section 10 hereof and except that Sections 8,
9, 11, 14 and 15 hereof shall survive any such termination and remain in full
force and effect.
SECTION 6. Delivery of and Payment for Notes Sold through an
Agent as Agent
Delivery of Notes sold through an Agent as an agent of the
Company shall be made by the Company to such Agent for the account of any
purchaser only against payment therefor in immediately available funds. In the
event that a purchaser shall fail either to accept delivery of or to make
payment for a Note on the date fixed for settlement, such Agent shall promptly
notify the Company and deliver such Note to the Company and, if such Agent has
theretofore paid the Company for such Note, the Company will promptly return
such funds to such Agent. If such failure has occurred for any reason other than
default by such Agent in the performance of its obligations hereunder, the
Company will reimburse such Agent on an equitable basis for its loss of the use
of the funds for the period such funds were credited to the Company's account.
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SECTION 7. Additional Covenants of the Company
The Company further covenants and agrees with each Agent as
follows:
(a) Reaffirmation of Representations and Warranties. Each
acceptance by the Company of an offer for the purchase of Notes
(whether to one or more Agents as principal or through an Agent as
agent), and each delivery of Notes (whether to one or more Agents as
principal or through an Agent as agent), shall be deemed to be an
affirmation that the representations and warranties of the Company
herein contained and contained in any certificate theretofore delivered
to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of
delivery to such Agent(s) or to the purchaser or its agent, as the case
may be, of the Notes relating to such acceptance or sale, as the case
may be, as though made at and as of each such time (it being understood
that such representations and warranties shall relate to the
Registration Statement and Prospectus as amended and supplemented to
each such time).
(b) Subsequent Delivery of Certificates. Each time that (i)
the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing solely
for the determination of the variable terms of the Notes or relating
solely to the offering of securities other than the Notes), (ii) (if
required in connection with the purchase of Notes from the Company by
one or more Agents as principal) the Company sells Notes to one or more
Agents as principal or (iii) the Company sells Notes in a form not
previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished to the Agent(s), forthwith a
certificate dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, or the
date of such sale, as the case may be, in form satisfactory to the
Agent(s) to the effect that the statements contained in the certificate
referred to in Section 5(c) hereof which were last furnished to the
Agents are true and correct at the time of the filing or effectiveness
of such amendment or supplement, as applicable, or the time of such
sale, as the case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such time)
or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in Section 5(c) hereof, modified as necessary
to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate (it being
understood that, in the case of clause (ii) above, any such certificate
shall also include a certification that there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise since the date of the
agreement by such Agent(s) to purchase Notes from the Company as
principal).
(c) Subsequent Delivery of Legal Opinions. Each time that (i)
the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement
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providing solely for the determination of the variable terms of the
Notes or relating solely to the offering of securities other than the
Notes), (ii) (if required in connection with the purchase of Notes from
the Company by one or more Agents as principal) the Company sells Notes
to one or more Agents as principal or (iii) the Company sells Notes in
a form not previously certified to the Agents by the Company, the
Company shall furnish or cause to be furnished forthwith to the
Agent(s) and to counsel to the Agents the written opinions of each of
William C. Warden, Jr., Executive Vice President, General Counsel,
Chief Administrative Officer and Secretary of the Company, and Hunton &
Williams, counsel to the Company, or other counsel satisfactory to the
Agent(s), dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, or the
date of such sale, as the case may be, in form and substance
satisfactory to the Agent(s), of the same tenor as the opinion referred
to in Section 5(b)(1) hereof, but modified, as necessary, to relate to
the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion or, in lieu of
such opinion, counsel last furnishing such opinion to the Agents shall
furnish the Agent(s) with a letter substantially to the effect that the
Agent(s) may rely on such last opinion to the same extent as though it
was dated the date of such letter authorizing reliance (except that
statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i)
the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information (other than by
an amendment or supplement relating solely to the issuance and/or
offering of securities other than the Notes) or (ii) (if required in
connection with the purchase of Notes from the Company by one or more
Agents as principal) the Company sells Notes to one or more Agents as
principal, the Company shall cause Deloitte & Touche forthwith to
furnish to the Agent(s) a letter, dated the date of filing with the
Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may
be, in form satisfactory to the Agent(s), of the same tenor as the
letter referred to in Section 5(d) hereof but modified to relate to the
Registration Statement and Prospectus as amended and supplemented to
the date of such letter.
SECTION 8. Indemnification
(a) Indemnification of the Agents. The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arising out of an untrue statement or alleged untrue statement of a
material fact
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included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(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 any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided
that (subject to Section 8(d) hereof) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by such Agent),
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 based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the Agents
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Indemnification of Company, Directors and Officers. Each
Agent severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers 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 against any and all loss, liability,
claim, damage and expense described in Section 8(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Agents expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. 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 Section 8(a) hereof, counsel to the indemnified parties shall be selected by
the applicable Agent(s) and, in the case of parties
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indemnified pursuant to Section 8(b) hereof, counsel to the indemnified shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, 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 8 or 9 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 of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. 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 Section 8(a)(ii) hereof 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. The indemnified party shall
promptly reimburse the indemnifying party for all amounts advanced to it
pursuant to this Section 8(d) (unless it is entitled to such amounts under
Section 9 hereof) if it shall be finally judicially determined that such
indemnified party was not entitled to indemnification hereunder and such loss,
liability, claim, damage or expense arose out of (i) an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the indemnified
party expressly for use in the Registration Statement (or any amendment thereto)
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or (ii) a fraudulent misrepresentation (within the meaning of Section
11 of the 1933 Act) by the indemnified party.
SECTION 9. Contribution
If the indemnification provided for in Section 8 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,
20
<PAGE>
and the applicable Agent(s), on the other hand, from the offering of the Notes
that were the subject of the claim for indemnification 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 the
applicable Agent(s), on the other hand, in connection with the 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 applicable Agent(s), on the other hand, in connection with the
offering of the Notes that were the subject of the claim for indemnification
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of such Notes (before deducting expenses) received by
the Company and the total discount or commission received by each applicable
Agent, as the case may be, bears to the aggregate initial offering price of such
Notes.
The relative fault of the Company, on the one hand, and the
applicable Agent(s), on the other hand, shall be determined by reference to,
among other things, whether any 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 applicable Agent(s) and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the applicable Agent(s) were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 9 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 applicable untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) no Agent
shall be required to contribute any amount in excess of the amount by which the
total discount or commission received by such Agent in connection with the
offering of the Notes that were the subject of the claim for indemnification
exceeds the amount of any damages which such Agent has otherwise been required
to pay by reason of any applicable untrue or alleged untrue statement or
omission or alleged omission and (ii) 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. In addition, in connection with an offering of Notes
purchased from the Company by two or more Agents as principal, the respective
obligations of such Agents to contribute pursuant to this Section 9 are several,
and not joint, in proportion to the aggregate principal amount of Notes that
each such Agent has agreed to purchase from the Company.
21
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For purposes of this Section 9, each person, if any, who
controls an Agent 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 such Agent, and
each director of the Company, each officer of the Company 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 10. Payment of Expenses
The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including:
(a) the preparation, filing, printing and delivery of the
Registration Statement as originally filed and all amendments thereto
and any preliminary prospectus, the Prospectus and any amendments or
supplements thereto;
(b) the preparation, printing and delivery of this Agreement
and the Indenture;
(c) the preparation, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and
issuance of Notes in book-entry form and the cost of obtaining CUSIP or
other identification numbers for the Notes;
(d) the fees and disbursements of the Company's accountants,
counsel and other advisors or agents (including any calculation agent
or exchange rate agent) and of the Trustee and its counsel;
(e) the reasonable fees and disbursements of counsel to the
Agents incurred in connection with the establishment of the Program and
incurred from time to time in connection with the transactions
contemplated hereby;
(f) the fees charged by nationally recognized statistical
rating organizations for the rating of the Program and the Notes;
(g) the fees and expenses incurred in connection with any
listing of Notes on a securities exchange;
(h) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review,
if any, by the National Association of Securities Dealers, Inc. (the
"NASD"); and
(i) any advertising and other out-of-pocket expenses of the
Agents incurred with the approval of the Company.
22
<PAGE>
SECTION 11. Representations, Warranties and Agreements to
Survive Delivery
All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agents or any controlling person of an Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for the Notes.
SECTION 12. Termination
(a) Termination of this Agreement. This Agreement (excluding
any agreement by one or more Agents to purchase Notes from the Company as
principal) may be terminated for any reason, at any time by either the Company
or an Agent, as to itself, upon the giving of 30 days' prior written notice of
such termination to the other party hereto; provided, however, that if the Agent
to which the Company provides notice does not at the time of the giving of
notice hold any Notes as principal or is not then a party to an agreement with
the Company to purchase Notes from the Company as principal, then this Agreement
may be terminated by the Company upon the giving of five days' prior written
notice.
(b) Termination of Agreement to Purchase Notes as Principal.
The applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from the Company as principal, immediately upon notice to the Company, at
any time prior to the Settlement Date relating thereto, if (i) there has been,
since the date of such agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or in the international financial markets, or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development or event 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 such Agent(s), impracticable to market
such Notes or enforce contracts for the sale of such Notes, or (iii) trading in
any securities of the Company has been suspended or limited by the Commission,
or if trading generally on the New York Stock Exchange or the American Stock
Exchange or in the Nasdaq National Market has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by either of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or (iv) a
banking moratorium has been declared by either Federal, New York or North
Carolina authorities, or (v) the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities (including
the Notes) of the Company as of the date of such agreement shall have been
lowered or withdrawn since that date or if any such rating organization shall
have publicly announced that it has under surveillance or review its rating of
the Program or any such debt securities, or (vi) there shall have come to the
attention of such Agent(s) any facts that would cause such Agent(s) to believe
that the Prospectus, at the time it was required to be delivered to a purchaser
of
23
<PAGE>
such Notes, included 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.
(c) General. In the event of any such termination, neither
party will have any liability to the other party hereto, except that (i) the
Agents shall be entitled to any commissions earned in accordance with the third
paragraph of Section 3(b) hereof, (ii) if at the time of termination (a) any
Agent shall own any Notes purchased by it from the Company as principal or (b)
an offer to purchase any of the Notes has been accepted by the Company but the
time of delivery to the purchaser or his agent of such Notes relating thereto
has not occurred, the covenants set forth in Sections 4 and 7 hereof shall
remain in effect until such Notes are so resold or delivered, as the case may
be, and (iii) the covenant set forth in Section 4(i) hereof, the provisions of
Section 10 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof
shall remain in effect.
SECTION 13. Notices
Unless otherwise provided herein, all notices required under
the terms and provisions hereof shall be in writing, either delivered by hand,
by mail or by telex, telecopier or telegram, and any such notice shall be
effective when received at the address specified below.
If to the Company:
Lowe's Companies, Inc.
P.O. Box 1111
North Wilkesboro, North Carolina 28656
Attention: William C. Warden, Jr., Executive Vice President,
General Counsel, Chief Administrative Officer
and Secretary
Telecopy No.: (910) 658-4766
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
24
<PAGE>
Lehman Brothers
3 World Financial Center
200 Vesey Street
New York, New York
Attention: MTN Product Management
Telecopy No.: (212) 528-1718
Morgan Stanley & Co. Incorporated
1585 Broadway
2nd Floor
New York, NY 10036
Attention: Manager - Continuously Offered Products
Telephone: (212) 761-2000
Telecopier: (212) 761-0780
with a copy to:
Morgan Stanley & Co. Incorporated
1585 Broadway
34th Floor
New York, NY 10036
Attention: Peter Cooper, Investment Banking Information Center
Telephone: (212) 761-8385
Telecopier: (212) 761-0260
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Parties
This Agreement shall inure to the benefit of and be binding
upon the Agents and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons, officers and directors
referred to in Sections 8 and 9 hereof and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors, and
said controlling persons, officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Notes shall be deemed to be a successor by reason merely of such
purchase.
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<PAGE>
SECTION 15. GOVERNING LAW; FORUM
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE
PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY AGAINST
ANY AGENT IN CONNECTION WITH OR ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT
SOLELY IN THE STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED IN THE
BOROUGH OF MANHATTAN, THE CITY OF NEW YORK.
SECTION 16. Effect of Headings
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 17. Counterparts
This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts hereof
shall constitute a single instrument.
26
<PAGE>
If the foregoing is in accordance with the Agents'
understanding of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this Distribution Agreement, along with all
counterparts, will become a binding agreement among the Agents and the Company
in accordance with its terms.
Very truly yours,
LOWE'S COMPANIES, INC.
By:
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Authorized Signatory
LEHMAN BROTHERS INC.
By:
MORGAN STANLEY & CO. INCORPORATED
By:
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<PAGE>
SCHEDULE A
As compensation for the services of the Agents hereunder, the
Company shall pay the applicable Agent, on a discount basis, a commission for
the sale of each Note equal to the principal amount of such Note multiplied by
the appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
- --------------- ----------------
From 9 months to less than 1 year.................................... .125%
From 1 year to less than 18 months................................... .150
From 18 months to less than 2 years.................................. .200
From 2 years to less than 3 years.................................... .250
From 3 years to less than 4 years.................................... .350
From 4 years to less than 5 years.................................... .450
From 5 years to less than 6 years.................................... .500
From 6 years to less than 7 years.................................... .550
From 7 years to less than 10 years................................... .600
From 10 years to less than 15 years.................................. .625
From 15 years to less than 20 years.................................. .700
From 20 years to 30 years............................................ .750
Greater than 30 years................................................ *
- --------
* As agreed to by the Company and the applicable Agent at the time of sale.
1
Exhibit 1.2
LOWE'S COMPANIES, INC.
ADMINISTRATIVE PROCEDURES
FOR FIXED RATE AND FLOATING
RATE MEDIUM-TERM NOTES
(Dated as of May 9, 1997)
OVERVIEW
Medium-Term Notes Due Nine Months or More From Date of Issue (the
"Notes") are to be offered on a continuous basis by LOWE'S COMPANIES, INC., a
North Carolina corporation (the "Company"), to or through Merrill Lynch & Co.,
Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated (each, an "Agent"
and, collectively, the "Agents") pursuant to a Distribution Agreement, dated May
9, 1997 (the "Distribution Agreement"), by and among the Company and the Agents.
The Distribution Agreement provides both for the sale of Notes by the Company to
one or more of the Agents as principal for resale to investors and other
purchasers (as may from time to time be agreed to by the Company and the related
Agent or Agents) and for the sale of Notes by the Company directly to investors
or to or through additional agents appointed by the Company from time to time on
terms substantially similar to those contained in the Distribution Agreement and
described in the applicable Pricing Supplement (as defined below).
Unless otherwise agreed by the related Agent or Agents and the Company,
Notes will be purchased by the related Agent or Agents as principal. Such
purchases will be made in accordance with terms agreed upon by the related Agent
or Agents and the Company (which terms shall be agreed upon orally, with written
confirmation prepared by the related Agent or Agents and mailed to the Company).
If agreed upon by any Agent or Agents and the Company, the Agent or Agents,
acting solely as agent or agents for the Company and not as principal, will use
reasonable best efforts to solicit offers to purchase the Notes. Only those
provisions in these Administrative Procedures that are applicable to the
particular role to be performed by the related Agent or Agents shall apply to
the offer and sale of the relevant Notes.
The Notes will be issued as a series of debt securities under the
Amended and Restated Indenture, dated as of December 1, 1995, as further
amended, supplemented or modified from time to time (the "Indenture"), between
the Company and The First National Bank of Chicago, as trustee (together with
any successor in such capacity, the "Trustee"). The Company has filed a
Registration Statement with the Securities and Exchange Commission (the
"Commission") registering debt securities and warrants to purchase debt
securities (which includes the Notes) (the "Registration Statement", which term
shall include any additional registration statements filed in connection with
the Notes). The most recent base prospectus deemed part of the Registration
Statement, as supplemented with respect to the Notes, is herein referred to as
"Prospectus". The most recent supplement to the Prospectus setting forth the
purchase price, interest rate or formula, maturity date and other terms of the
Notes (as applicable) is herein referred to as the "Pricing Supplement".
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<PAGE>
The Notes will be issued in book-entry form and represented by one or
more fully registered Notes without coupons (each, a "Global Note") delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC.
Procedures relating to the issuance of the Notes are set forth below.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture or the Notes, as the case may be.
GENERAL PROCEDURES
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall also
bear an original issue date (each, an "Original Issue
Date"). The Original Issue Date shall remain the same
for all Notes subsequently issued upon transfer,
exchange or substitution of an original Note
regardless of their dates of authentication.
Maturities: Each Note will mature on a date nine months or more
from its Original Issue Date (the "Stated Maturity
Date") selected by the investor or other purchaser
and agreed to by the Company.
Registration: Unless otherwise provided in the applicable Pricing
Supplement, Notes will be issued only in fully
registered form.
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Notes will be issued in denominations
of $1,000 and integral multiples thereof.
Interest Rate Bases
applicable to
Floating Rate
Notes: Unless otherwise provided in the applicable Pricing
Supplement, Floating Rate Notes will bear interest at
a Rate or rates determined by reference to the CD
Rate, the CMT Rate, the Commercial Paper Rate, the
Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR, the Prime Rate, the Treasury Rate,
or such other interest rate basis or formula as may
be set forth in applicable Pricing Supplement, or by
reference to two or more such rates, as adjusted by
the Spread and/or Spread Multiplier, if any,
applicable to such Floating Rate Notes.
Redemption/Repayment: The Notes will be subject to redemption by the
Company in accordance with the terms of the Notes,
which will be fixed at the time of sale and set forth
in the applicable Pricing Supplement. If no Initial
Redemption Date is indicated with respect to a Note,
such Note will not be redeemable prior to its Stated
Maturity
2
<PAGE>
Date. The Notes will be subject to repayment at the
option of the Holders thereof in accordance with the
terms of the Notes, which will be fixed at the time
of sale and set forth in the applicable Pricing
Supplement. If no Optional Repayment Date is
indicated with respect to a Note, such Note will not
be repayable at the option of the Holder prior to its
Stated Maturity Date.
Calculation of
Interest: In case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months. The interest rate on each Floating Rate Note
will be calculated by reference to the specified
Interest Rate Basis or Bases plus or minus the
applicable Spread, if any, and/or multiplied by the
applicable Spread Multiplier, if any.
Unless otherwise provided in the applicable Pricing
Supplement, interest on each Floating Rate Note will
be calculated by multiplying its principal amount by
an accrued interest factor. Such accrued interest
factor is computed by adding the interest factor
calculated for each day in the period for which
accrued interest is being calculated. Unless
otherwise provided in the applicable Pricing
Supplement, the interest factor for each such day is
computed by dividing the interest rate applicable to
such day by 360 if the CD Rate, Commercial Paper
Rate, Eleventh District Cost of Funds Rate, Federal
Funds Rate, LIBOR or Prime Rate is an applicable
Interest Rate Basis, or by the actual number of days
in the year if the CMT Rate or Treasury Rate is an
applicable Interest Rate Basis. As provided in the
applicable Pricing Supplement, the interest factor
for Notes for which the interest rate is calculated
with reference to two or more Interest Rate Bases
will be calculated in each period in the same manner
as if only one of the applicable Interest Rate Bases
applied as specified in the applicable Pricing
Supplement and the Notes.
Interest: General. Each Note will bear interest in accordance
with its terms. Unless otherwise provided in the
applicable Pricing Supplement, interest on each Note
will accrue from and including the Original Issue
Date of such Note for the first interest period or
from the most recent Interest Payment Date (as
defined below) to which interest has been paid or
duly provided for all subsequent interest periods to
but excluding the applicable Interest Payment Date or
the Stated Maturity Date or date of earlier
redemption or repayment, as the case may be (the
Stated Maturity Date or date of earlier redemption or
repayment is referred to herein as the "Maturity
Date" with respect to the principal repayable on such
date).
If an Interest Payment Date or the Maturity Date with
respect to any Fixed Rate Note falls on a day that is
not a Business Day (as defined below), the required
3
<PAGE>
payment to be made on such day need not be made on
such day, but may be made on the next succeeding
Business Day with the same force and effect as if
made on such day, and no interest shall accrue on the
amount so payable for the period from and after such
Interest Payment Date or Maturity, as the case may
be, to the next succeeding Business Day. If an
Interest Payment Date other than the Maturity Date
with respect to any Floating Rate Note would
otherwise fall on a day that is not a Business Day,
such Interest Payment Date will be postponed to the
next succeeding Business Day, except that in the case
of a Note for which LIBOR is an applicable Interest
Rate Basis, if such Business Day falls in the next
succeeding calendar month, such Interest Payment Date
will be the immediately preceding Business Day. If
the Maturity Date with respect to any Floating Rate
Note falls on a day that is not a Business Day, the
required payment to be made on such day need not be
made on such day, but may be made on the next
succeeding Business Day with the same force and
effect as if made on such day, and no interest shall
accrue from and after such Maturity to the next
succeeding Business Day. Unless otherwise provided in
the applicable Pricing Supplement, "Business Day"
means any day other than a Saturday or Sunday, that
is neither a legal holiday, nor a day on which
banking institutions are authorized or required by
law, regulation or executive order to close in The
City of New York.
Regular Record Dates. Unless otherwise provided in
the applicable Pricing Supplement, the "Regular
Record Date" for a Note shall be the date 15 calendar
days (whether or not a Business Day) preceding the
applicable Interest Payment Date.
Interest Payment Dates. Interest payments will be
made on each Interest Payment Date commencing with
the first Interest Payment Date following the
Original Issue Date; provided, however, that the
first payment of interest on any Note originally
issued between a Regular Record Date and an Interest
Payment Date will occur on the Interest Payment Date
following the next succeeding Regular Record Date.
Unless otherwise provided in the applicable Pricing
Supplement, interest payments on Fixed Rate Notes
will be made semiannually in arrears on March 1 and
September 1 of each year and on the Maturity Date,
while interest payments on Floating Rate Notes will
be made as specified in the applicable Pricing
Supplement.
Acceptance and Rejection of Offers from Solicitation
as Agents. If agreed upon by any Agent and the
Company, then such Agent acting solely as agent for
the Company and not as principal will solicit
purchases of the Notes. Each Agent will communicate
to the Company, orally or in writing, each reasonable
offer to purchase Notes solicited by such Agent on an
agency basis, other than those offers rejected by
such Agent. Each Agent has the right, in its
discretion
4
<PAGE>
reasonably exercised, to reject any proposed purchase
of Notes, as a whole or in part, and any such
rejection shall not be a breach of such Agent's
agreement contained in the Distribution Agreement.
The Company has the sole right to accept or reject
any proposed purchase of Notes, in whole or in part,
and any such rejection shall not a breach of the
Company's agreement contained in the Distribution
Agreement. Each Agent has agreed to make reasonable
best efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase
Notes has been solicited by such Agent and accepted
by the Company.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company will promptly prepare a Pricing
Supplement reflecting the terms of such Note.
Information to be included in the Pricing Supplement
shall include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement and the
date of the Prospectus to which the Pricing
Supplement relates;
4. the name of the Offering Agent (as defined
below);
5. whether such Notes are being sold to the
Offering Agent as principal or to an investor
or other purchaser through the Offering Agent
acting as agent for the Company;
6. with respect to Notes sold to the Offering
Agent as principal, whether such Notes will be
resold by the Offering Agent to investors and
other purchasers at (i) a fixed public
offering price of a specified percentage of
their principal amount or (ii) at varying
prices related to prevailing market prices at
the time of resale to be determined by the
Offering Agent;
7. with respect to Notes sold to an investor
or other purchaser through the Offering Agent
acting as agent for the Company, whether such
Notes will be sold at (i) 100% of their
principal amount or (ii) a specified
percentage of their principal amount;
8. the Offering Agent's discount or
commission;
9. Net proceeds to the Company;
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<PAGE>
10. the Principal Amount, Original Issue Date,
Stated Maturity Date, Interest Payment
Date(s), Authorized Denomination, Initial
Redemption Date, if any, Initial Redemption
Percentage, if any, Annual Redemption
Percentage Reduction, if any, Optional
Repayment Date(s), if any, Exchange Rate
Agent, if any, Default Rate, if any, and, in
the case of Fixed Rate Notes, the Interest
Rate, and, in the case of Floating Rate Notes,
the Interest Category, the Interest Rate Basis
or Bases, the Day Count Convention, Index
Maturity (if applicable), Initial Interest
Rate, if any, Maximum Interest Rate, if any,
Minimum Interest Rate, if any, Initial
Interest Reset Date, Interest Reset Dates,
Spread and/or Spread Multiplier, if any, and
Calculation Agent; and
11. any other additional provisions of the
Notes material to investors or other
purchasers of the Notes not otherwise
specified in the Prospectus.
The Company shall use its reasonable efforts to send
such Pricing Supplement by telecopy or overnight
express (for delivery by the close of business on the
applicable trade date, but in no event later than
11:00 a.m. New York City time, on the Business Day
following the applicable trade date) to the Agent
which made or presented the offer to purchase the
applicable Note (in such capacity, the "Offering
Agent") and the Trustee at the following applicable
address:
<TABLE>
<S> <C>
if to Trustee:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60602
Attention: Corporate Trust Services Division
if to Agents:
Merrill Lynch & Co.
Tritech Services
40 Colonial Drive
Piscataway, New Jersey 08854
Attention: Prospectus Operations/Nachman Kimerling
Phone: (908) 885-2768
Telecopier: (908) 885-2774/5/6
with a copy to:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
6
<PAGE>
North Tower, 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Phone: (212) 449-7476
Telecopier: (212) 449-2234
with a copy to:
Brown & Wood
One World Trade Center
New York, New York 10048
Attention: Norman D. Slonaker, Esq.
Lehman Brothers Inc.
3 World Financial Center
200 Vesey Street
New York, New York 10285
Attention: MTN Product Management
Morgan Stanley & Co. Incorporated
1585 Broadway
2nd Floor
New York, New York 10036
Attention: Manager - Continuously Offered Products
</TABLE>
In each instance that a Pricing Supplement is
prepared, the Offering Agent will provide a copy of
such Pricing Supplement to each investor or purchaser
of the relevant Notes or its agent. Pursuant to Rule
434 of the Securities Act of 1933, as amended ("Rule
434"), the Pricing Supplement may be delivered
separately from the Prospectus. Outdated Pricing
Supplements (other than those retained for files)
will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the authentication
and delivery of such Note shall, with respect to such
Note, constitute "settlement". Offers accepted by the
Company will be settled in three Business Days, or at
such time as the purchaser, the applicable Agent and
the Company shall agree, pursuant to the timetable
for settlement set forth below under "Settlement
Procedures Timetable" (each such date fixed for
settlement is hereinafter referred to as a
"Settlement Date"). If procedures A and B of the
Settlement Procedures with respect to a particular
offer are not completed on or before the time set
forth under the Settlement Procedures Timetable, such
offer shall not be settled until the Business Day
following the completion of settlement
7
<PAGE>
procedures A and B or such later date as the
purchaser and the Company shall agree. The foregoing
settlement procedures may be modified with respect to
any purchase of Notes by an Agent as principal if so
agreed by the Company and such Agent.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change the
interest rate or any other variable term on any Notes
being sold by the Company, the Company will promptly
advise the Agents and the Trustee by facsimile
transmission and the Agents will forthwith suspend
solicitation of offers to purchase such Notes. The
Agents will telephone the Company with
recommendations as to the changed interest rates or
other variable terms. At such time as the Company
notifies the Agents and the Trustee of the new
interest rates or other variable terms, the Agents
may resume solicitation of offers to purchase such
Notes. Until such time, only "indications of
interest" may be recorded. Immediately after
acceptance by the Company of an offer to purchase
Notes at a new interest rate or new variable term,
the Company, the Offering Agent and the Trustee shall
follow the procedures set forth under the applicable
Settlement Procedures.
Suspension of Solicitation;
Amendment/Supplement: The Company may instruct the Agents to suspend
solicitation of offers to purchase Notes at any time.
Upon receipt of such instructions, the Agents will
forthwith suspend solicitation of offers to purchase
from the Company until such time as the Company has
advised the Agents that solicitation of offers to
purchase may be resumed. If the Company decides to
amend or supplement the Registration Statement or the
Prospectus (other than to establish or change
interest rates or formulas, maturities, prices or
other similar variable terms with respect to the
Notes), it will promptly advise the Agents and will
furnish the Agents and their counsel with copies of
the proposed amendment or supplement. Copies of such
amendment or supplement will be delivered or mailed
to the Agents, their counsel and the Trustee in
quantities which such parties may reasonably request
at the following respective addresses:
if to Trustee:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60602
Attention: Corporate Trust Services Division
8
<PAGE>
<TABLE>
<S> <C>
if to Agents:
Merrill Lynch & Co.
Tritech Services
40 Colonial Drive
Piscataway, New Jersey 08854
Attention: Prospectus Operations/Nachman Kimerling
Phone: (908) 885-2768
Telecopier: (908) 885-2774/5/6
with a copy to:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Phone: (212) 449-7476
Telecopier: (212) 449-2234
with a copy to:
Brown & Wood
One World Trade Center
New York, New York 10048
Attention: Norman D. Slonaker, Esq.
Lehman Brothers Inc.
3 World Financial Center
200 Vesey Street
New York, New York 10285
Attention: MTN Product Management
Morgan Stanley & Co. Incorporated
1585 Broadway
2nd Floor
New York, New York 10036
Attention: Manager - Continuously Offered Products
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-4676
Attention: Joel S. Klaperman
</TABLE>
9
<PAGE>
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
(other than to establish or change interest rates or
formulas, maturities, prices or other similar
variable terms with respect to the Notes) there shall
be any offers to purchase Notes that have been
accepted by the Company which have not been settled,
the Company will promptly advise the Offering Agent
and the Trustee whether such offers may be settled
and whether copies of the Prospectus as theretofore
amended and/or supplemented as in effect at the time
of the suspension may be delivered in connection with
the settlement of such offers. The Company will have
the sole responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such offers may not be
settled or that copies of such Prospectus may not be
so delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent Prospectus and
the applicable Pricing Supplement, which pursuant to
Rule 434 may be delivered separately from the
Prospectus, must accompany or precede the earlier of
(a) the written confirmation of a sale sent to an
investor or other purchaser or its agent and (b) the
delivery of Notes to an investor or other purchaser
or its agent.
Authenticity of
Signatures: The Agents will have no obligation or liability to
the Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or the Trustee on
any Note.
Documents Incorporated
by Reference: The Company shall supply the Agents with an adequate
supply of all documents incorporated by reference in
the Registration Statement and the Prospectus.
BOOK ENTRY PROCEDURES
In connection with the qualification of Notes issued in book-entry form for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and the Trustee to DTC, dated May 9, 1997, and a Certificate
Agreement, dated May 26, 1989, between the Trustee and DTC, as amended (the
"Certificate Agreement"), and its obligations as a participant in DTC, including
DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form having
the same Original Issue Date, Interest Rate, Default
Rate, Interest Payment Dates, redemption and/or
repayment terms,
10
<PAGE>
if any, and Stated Maturity Date (collectively, the
"Fixed Rate Terms") will be represented initially by
a single Global Note; and all Floating Rate Notes
issued in book-entry form having the same Original
Issue Date, Interest Category, formula for the
calculation of interest (including the Interest Rate
Basis or Bases, which may be the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Eleventh
District Cost of Funds Rate, the Federal Funds Rate,
LIBOR, the Prime Rate or the Treasury Rate or any
other interest rate basis or formula, and Spread
and/or Spread Multiplier, if any), Day Count
Convention, Initial Interest Rate, Default Rate,
Index Maturity (if applicable), Minimum Interest
Rate, if any, Maximum Interest Rate, if any,
redemption and/or repayment terms, if any, Interest
Payment Dates, Initial Interest Reset Date, Interest
Reset Dates and Stated Maturity Date (collectively,
the "Floating Rate Terms") will be represented
initially by a single Global Note. For other variable
terms with respect to the Fixed Rate Notes and
Floating Rate Notes, see the Prospectus and the
applicable Pricing Supplement.
Identification: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of one series of
CUSIP numbers, which series consists of approximately
900 CUSIP numbers which have been reserved for and
relate to Global Notes, and the Company has delivered
to each of the Trustee and DTC such list of such
CUSIP numbers. The Company will assign CUSIP numbers
to Global Notes as described below under Settlement
Procedure B. DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Company
has assigned to Global Notes. The Trustee will notify
the Company at any time when fewer than 100 of the
reserved CUSIP numbers remain unassigned to Global
Notes, and, if it deems necessary, the Company will
reserve and obtain additional CUSIP numbers for
assignment to Global Notes. Upon obtaining such
additional CUSIP numbers, the Company will deliver a
list of such additional numbers to the Trustee and
DTC. Notes issued in book-entry form in excess of
$200,000,000 aggregate principal amount and otherwise
required to be represented by the same Global Note
will instead be represented by two or more Global
Notes which shall all be assigned the same CUSIP
number.
Registration: Unless otherwise specified by DTC, each Global Note
will be registered in the name of Cede & Co., as
nominee for DTC, on the register maintained by the
Trustee under the Indenture. The beneficial owner of
a Note issued in book-entry form (i.e., an owner of a
beneficial interest in a Global Note) (or one or more
indirect participants in DTC designated by such
owner) will designate one or more participants in DTC
(with respect to such Note issued in book-entry form,
the "Participants") to act as agent for such
beneficial owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such Note issued in book-entry form in the
account of such Participants. The ownership interest
of such beneficial owner in such Note issued in
book-entry form will be recorded through the records
of such Participants
11
<PAGE>
or through the separate records of such Participants
and one or more indirect participants in DTC.
Transfers: Transfers of beneficial ownership interests in a
Global Note will be accomplished by book entries made
by DTC and, in turn, by Participants (and in certain
cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and
transferees of such Global Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice specifying (a)
the CUSIP numbers of two or more Global Notes
outstanding on such date that represent Global Notes
having the same Fixed Rate Terms or Floating Rate
Terms, as the case may be (other than Original Issue
Dates), and for which interest has been paid to the
same date; (b) a date, occurring at least 30 days
after such written notice is delivered and at least
30 days before the next Interest Payment Date for the
related Notes issued in book-entry form, on which
such Global Notes shall be exchanged for a single
replacement Global Note; and (c) a new CUSIP number,
obtained from the Company, to be assigned to such
replacement Global Note. Upon receipt of such a
notice, DTC will send to its Participants (including
the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date.
Prior to the specified exchange date, the Trustee
will deliver to the CUSIP Service Bureau written
notice setting forth such exchange date and the new
CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Notes to be
exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global
Notes for a single Global Note bearing the new CUSIP
number and the CUSIP numbers of the exchanged Notes
will, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing, if the
Global Notes to be exchanged exceed $200,000,000 in
aggregate principal amount, one replacement Note will
be authenticated and issued to represent each
$200,000,000 in aggregate principal amount of the
exchanged Global Notes and an additional Global Note
or Notes will be authenticated and issued to
represent any remaining principal amount of such
Global Notes (See "Denominations" below).
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, Notes issued in book-entry form will be
issued in denominations of $1,000 and integral
multiples thereof. Global Notes will not be
denominated in excess of $200,000,000 aggregate
principal amount. If one or more Notes are issued in
book-entry form in excess of $200,000,000 aggregate
principal amount and would, but for the preceding
sentence, be represented by a single Global Note,
then one Global Note will be issued to represent each
$200,000,000 in aggregate principal amount of such
Notes issued in book-entry form and an additional
Global Note or Notes will be issued to represent any
remaining aggregate principal amount of such Note or
Notes issued in book- entry form. In such a case,
each
12
<PAGE>
of the Global Notes representing Notes issued in
book-entry form shall be assigned the same CUSIP
number.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each
Regular Record Date, the Trustee will deliver to the
Company and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
Global Note on the following Interest Payment Date
(other than an Interest Payment Date coinciding with
the Maturity Date) and the total of such amounts. DTC
will confirm the amount payable on each Global Note
on such Interest Payment Date by reference to the
daily bond reports published by Standard & Poor's
Corporation. On such Interest Payment Date, the
Company will pay to the Trustee in immediately
available funds an amount sufficient to pay the
interest then due and owing on the Global Notes, and
upon receipt of such funds from the Company, the
Trustee in turn will pay to DTC such total amount of
interest due on such Global Notes (other than on the
Maturity Date), at the times and in the manner set
forth below under "Manner of Payment".
Notice of Interest Rates. Promptly after each
Interest Determination Date or Calculation Date, as
the case may be, for Floating Rate Notes issued in
book-entry form, the Trustee will notify each of
Moody's Investors Service, Inc. and Standard & Poor's
Corporation of the interest rates determined as of
such Interest Determination Date.
Payments at Maturity. On or about the first Business
Day of each month, the Trustee will deliver to the
Company and DTC a written list of principal, premium,
if any, and interest to be paid on each Global Note
maturing or otherwise becoming due in the following
month. The Trustee, the Company and DTC will confirm
the amounts of such principal, premium, if any, and
interest payments with respect to each such Global
Note on or about the fifth Business Day preceding the
Maturity Date of such Global Note. On the Maturity
Date, the Company will pay to the Trustee in
immediately available funds an amount sufficient to
make the required payments, and upon receipt of such
funds the Trustee in turn will pay to DTC the
principal amount of Global Notes, together with
premium, if any, and interest due on the Maturity
Date, at the times and in the manner set forth below
under "Manner of Payment". Promptly after payment to
DTC of the principal, premium, if any, and interest
due on the Maturity Date of such Global Note, the
Trustee will cancel such Global Note and deliver it
to the Company with an appropriate debit advice. On
the first Business Day of each month, the Trustee
will deliver to the Company a written statement
indicating the total principal amount of outstanding
Global Notes as of the close of business on the
immediately preceding Business Day.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Global Notes on
any Interest Payment Date or the Maturity Date, as
the case may
13
<PAGE>
be, all of which shall be payable in U.S. dollars,
shall be paid by the Company to the Trustee in funds
available for use by the Trustee no later than 10:00
a.m., New York City time, on such date. The Company
will make such payment on such Global Notes to an
account specified by the Trustee. Upon receipt of
such funds, the Trustee will pay by separate wire
transfer (using Fedwire message entry instructions in
a form previously specified by DTC) to an account at
the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate
use by DTC, each payment of principal, premium, if
any, and interest due on Global Notes on such date.
Thereafter on such date, DTC will pay, in accordance
with its SDFS operating procedures then in effect,
such amounts in funds available for immediate use to
the respective Participants in whose names the
beneficial interests in such Global Notes are
recorded in the book-entry system maintained by DTC.
Neither the Company nor the Trustee shall have any
responsibility or liability for the payment by DTC of
the principal of, or premium, if any, or interest on,
the Global Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Global Note will be determined and
withheld by the Participant, indirect participant in
DTC or other Person responsible for forwarding
payments and materials directly to the beneficial
owner of such Global Note.
Settlement
Procedures: Settlement Procedures with regard to each Note in
book-entry form sold by an Agent, as agent of the
Company, or purchased by an Agent, as principal, will
be as follows:
A. The Offering Agent will advise the Company by
telephone, confirmed by facsimile, of the
following settlement information:
1. Principal amount and Authorized
Denomination;
2. Exchange Rate Agent, if any;
3. (a) Fixed Rate Notes: (i) Interest Rate;
and (ii) Interest Payment Dates. Whether such
Note is being issued with Original Issue
Discount and, if so, the terms thereof;
(b) Floating Rate Notes: (i) Interest
Category; (ii) Interest Rate Basis or Bases;
(iii) Initial Interest Rate; (iv) Spread
and/or Spread Multiplier, if any; (v) Initial
Interest Reset Date or Interest Reset Dates;
(vi) Interest Payment Dates; (vii) Index
Maturity, if any; (viii) Maximum and/or
Minimum Interest Rates, if any; (ix) Day Count
Convention; and (viii) Calculation Agent;
14
<PAGE>
4. Price to public, if any, of such Note (or
whether such Note is being offered at varying
prices relating to prevailing market prices at
time of resale as determined by the Offering
Agent);
5. Trade Date;
6. Settlement Date (Original Issue Date);
7. Stated Maturity Date;
8. Redemption provisions, if any;
9. Repayment provisions, if any;
10. Default Rate, if any;
11. Net proceeds to the Company;
12. The Offering Agent's discount or
commission;
13. Whether such Note is being sold to the
Offering Agent as principal or to an investor
or other purchaser through the Offering Agent
acting as agent for the Company; and
14. Such other information specified with
respect to such Note (whether by Addendum or
otherwise).
B. The Company will assign a CUSIP number to the
Global Note representing such Note and then
advise the Trustee by telephone or facsimile
transmission of the above settlement information
received from the Offering Agent, such CUSIP
number and the name of the Offering Agent. The
Company will also advise the Offering Agent of
the CUSIP number assigned to the Global Note.
C. The Trustee will communicate to DTC and the
Offering Agent through DTC's Participant Terminal
System a pending deposit message specifying the
following settlement information:
1. The information set forth in Settlement
Procedure A;
2. Identification numbers of the participant
accounts maintained by DTC on behalf of the
Trustee and the Offering Agent;
15
<PAGE>
3. Identification of the Global Note as a
Fixed Rate Global Note or Floating Rate Global
Note;
4. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related record date for DTC
purposes (or, in the case of Floating Rate
Notes which reset daily or weekly, the date
five calendar days preceding the Interest
Payment Date) and, if then calculable, the
amount of interest payable on such Interest
Payment Date (which amount shall have been
confirmed by the Trustee);
5. CUSIP number of the Global Note
representing such Note; and
6. Whether such Global Note represents any
other Notes issued or to be issued in
book-entry form.
DTC will arrange for each pending deposit message
described above to be transmitted to Standard &
Poor's Corporation, which will use the
information in the message to include certain
terms of the related Global Note in the
appropriate daily bond report published by
Standard & Poor's Corporation.
D. The Trustee will complete and authenticate the
Global Note representing such Note.
E. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such
Note to the participant account of the Offering
Agent maintained by DTC and (ii) to debit the
settlement account of the Offering Agent and
credit the settlement account of the Trustee
maintained by DTC, in an amount equal to the
price of such Note less such Offering Agent's
discount or underwriting commission, as
applicable. Any entry of such a deliver order
shall be deemed to constitute a representation
and warranty by the Trustee to DTC that (i) the
Global Note representing such Note has been
issued and authenticated and (ii) the Trustee is
holding such Global Note pursuant to the
Certificate Agreement.
G. In the case of Notes in book-entry form sold
through the Offering Agent, as agent, the
Offering Agent will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Offering Agent's participant account and credit
such Note to the participant
16
<PAGE>
account of the Participants maintained by DTC and
(ii) to debit the settlement accounts of such
Participants and credit the settlement account of
the Offering Agent maintained by DTC in an amount
equal to the initial public offering price of
such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement Procedures
F and G will be settled in accordance with SDFS
operating procedures in effect on the Settlement
Date.
I. Upon receipt, the Trustee will pay the
Company, by wire transfer of immediately
available funds to an account specified by the
Company to the Trustee from time to time, the
amount transferred to the Trustee in accordance
with Settlement Procedure F.
J. The Trustee will send a copy of the Global
Note by first class mail to the Company together
with a statement setting forth the principal
amount of Notes Outstanding as of the related
Settlement Date after giving effect to such
transaction and all other offers to purchase
Notes of which the Company has advised the
Trustee but which have not yet been settled.
K. If such Note was sold through the Offering
Agent, as agent, the Offering Agent will confirm
the purchase of such Note to the investor or
other purchaser either by transmitting to the
Participant with respect to such Note a
confirmation order through DTC's Participant
Terminal System or by mailing a written
confirmation to such investor or other purchaser.
Settlement Pro-
cedures Timetable: For offers to purchase Notes accepted by
the Company, Settlement Procedures A through K set
forth above shall be completed as soon as possible
following the trade but not later than the respective
times (New York City time) set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
---------- ----
<S> <C>
A 11:00 a.m. on the trade date or within one
hour following the trade
B 12:00 noon on the trade date or within one
hour following the trade
C No later than the close of business on the
trade date
D 9:00 a.m. on Settlement Date
17
<PAGE>
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on Settlement Date
H 4:00 p.m. on Settlement Date
I-J 5:00 p.m. on Settlement Date
</TABLE>
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the Settlement
Date. If settlement of a Note issued in book-entry
form is rescheduled or canceled, the Trustee will
deliver to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect by no
later than 5:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled
Settlement Date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver order
with respect to a Note issued in book-entry form
pursuant to Settlement Procedure F, the Trustee may
deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable a withdrawal message
instructing DTC to debit such Note to the participant
account of the Trustee maintained at DTC. DTC will
process the withdrawal message, provided that such
participant account contains a principal amount of
the Global Note representing such Note that is at
least equal to the principal amount to be debited. If
withdrawal messages are processed with respect to all
of the Notes represented by a Global Note, the
Trustee will mark such Global Note "canceled", make
appropriate entries in its records and send
certification of destruction of such canceled Global
Note to the Company. The CUSIP number assigned to
such Global Note shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. If withdrawal messages are
processed with respect to a portion of the Notes
represented by a Global Note, the Trustee will
exchange such Global Note for two Global Notes, one
of which shall represent the Global Notes for which
withdrawal messages are processed and shall be
canceled immediately after issuance and the other of
which shall represent the other Notes previously
represented by the surrendered Global Note and shall
bear the CUSIP number of the surrendered Global Note.
In the case of any Note in book-entry form sold
through the Offering Agent, as agent, if the purchase
price for any such Note is not timely paid to the
Participants with respect thereto by the beneficial
investor or other purchaser thereof (or a person,
including an indirect participant in DTC, acting on
behalf of such investor or other purchaser), such
Participants and, in turn, the related Offering Agent
may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures F and G,
respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the related actions
described in the preceding paragraph. If such failure
shall have occurred for any reason other than default
by the applicable Offering Agent to perform its
obligations hereunder or under the Distribution
Agreement, the Company will reimburse such Offering
Agent on an
18
<PAGE>
equitable basis for its reasonable loss of the use of
funds during the period when the funds were credited
to the account of the Company. Notwithstanding the
foregoing, upon any failure to settle with respect to
a Note in book-entry form, DTC may take any actions
in accordance with its SDFS operating procedures then
in effect. In the event of a failure to settle with
respect to a Note that was to have been represented
by a Global Note also representing other Notes, the
Trustee will provide, in accordance with Settlement
Procedure D, for the authentication and issuance of a
Global Note representing such remaining Notes and
will make appropriate entries in its records.
19
Exhibit 4.2
[FACE OF NOTE]
LOWE'S COMPANIES, INC.
MEDIUM-TERM NOTE, SERIES B
(Floating Rate)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
<TABLE>
<S> <C>
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FLR-___ ______________ _________________
LOWE'S COMPANIES, INC.
MEDIUM-TERM NOTE, SERIES B
(Floating Rate)
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF CMT RATE:
Designated CMT Telerate Page:
IF Telerate Page 7052:
o Weekly Average
o Monthly Average
Designated CMT Maturity Index:
INDEX MATURITY: INITIAL INTEREST RATE: % INTEREST PAYMENT DATE(S):
[ ] ________ and ________
[ ] Other:
SPREAD (PLUS OR SPREAD MULTIPLIER: INITIAL INTEREST RESET
MINUS): DATE:
MINIMUM INTEREST MAXIMUM INTEREST INTEREST RESET
RATE: % RATE: % DATES:
</TABLE>
FLR-1
<PAGE>
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE REDUCTION: %
OPTIONAL REPAYMENT CALCULATION AGENT:
DATE(S):
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to .
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: % from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: % from to .
Applicable Interest Rate Basis:
AUTHORIZED DENOMINATION:
[ ] $1,000 and integral multiples thereof
[ ] Other:
DEFAULT RATE: %
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
LOWE'S COMPANIES, INC., a North Carolina corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to , or registered
assigns, the principal sum of U.S. $ , on the Stated Maturity Date specified
above (or any Redemption Date or Repayment Date, each as defined on the reverse
hereof) (each such Stated Maturity Date, Redemption Date or Repayment Date being
hereinafter referred to as the "Maturity Date" with respect to the principal
repayable on such date) and to pay interest thereon, at a rate per annum equal
to the Initial Interest Rate specified above from the Original Issue Date shown
above until the Initial Interest Reset Date specified above and thereafter at a
rate determined in accordance with the provisions specified above and on the
reverse hereof with respect to one or more Interest Rate Bases specified above
until the principal hereof is paid or duly made available for payment, and (to
the extent that the payment of such interest shall be legally enforceable) at
the Default Rate per annum specified above on any overdue principal, premium
and/or interest. The Company will pay interest in arrears on each Interest
Payment Date, if any, specified above (each, an "Interest Payment Date"),
commencing with the first Interest Payment Date next succeeding the Original
Issue Date specified above, and on the Maturity Date; provided, however, that if
the Original Issue Date occurs between a Record Date (as defined below) and the
next succeeding Interest Payment Date, interest payments will commence on the
second Interest
FLR-2
<PAGE>
Payment Date next succeeding the Original Issue Date to the holder of this Note
on the Record Date with respect to such second Interest Payment Date.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day, as defined on the reverse hereof) immediately preceding such
Interest Payment Date (the "Record Date"); provided, however, that interest
payable on the Maturity Date will be payable to the person to whom the principal
hereof and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for ("Defaulted Interest") will forthwith cease
to be payable to the holder on any Record Date, and shall be paid to the person
in whose name this Note is registered at the close of business on a special
record date (the "Special Record Date") for the payment of such Defaulted
Interest to be fixed by the Trustee hereinafter referred to, notice whereof
shall be given to the holder of this Note by the Trustee not less than 15
calendar days prior to such Special Record Date or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which this note may be listed, and upon such notice as may be
required by such exchange, all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, a duly completed election form as contemplated on the
reverse hereof) at the corporate trust office of the Trustee maintained for that
purpose in the Borough of Manhattan, The City of New York, currently located at
14 Wall Street, 8th Floor, Window 2, New York, New York, 10005, or at such other
paying agency in the Borough of Manhattan, The City of New York, as the Company
may determine. As long as this Note is registered in the name of DTC or its
nominee, the Trustee will make payments of interest due on any Interest Payment
Date by wire transfer of immediately available funds to DTC or its nominee.
If any Interest Payment Date other than the Maturity Date would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and interest
shall be made on the next succeeding Business Day with the same force and effect
as if made on the date such payment was due, and no interest shall accrue with
respect to such payment for the period from and after the Maturity Date to the
date of such payment on the next succeeding Business Day.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in U.S. dollars.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF AND, IF SO SPECIFIED ABOVE, IN THE ADDENDUM HERETO,
WHICH FURTHER PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH ON
THE FACE HEREOF.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions".
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed in its corporate name by the facsimile signatures of its Chairman of
the Board of Directors, its President, or one of its Vice Presidents, and its
Secretary or an Assistant Secretary and impressed or imprinted with its
corporate seal or a facsimile thereof.
FLR-3
<PAGE>
LOWE'S COMPANIES, INC.
------------------------
By:
Its:
ATTEST:
By:__________________________
[Assistant] Secretary
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:____________________________
Authorized Signatory
FLR-4
<PAGE>
[REVERSE OF NOTE]
LOWE'S COMPANIES, INC.
MEDIUM-TERM NOTE, SERIES B
(Floating Rate)
This Note is one of a duly authorized series of Debt Securities (the
"Debt Securities") of the Company, issued and to be issued under the Amended and
Restated Indenture, dated as of December 1, 1995, as may be further amended,
modified or supplemented from time to time (the "Indenture"), between the
Company and The First National Bank of Chicago, as Trustee (the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the holders of the Debt Securities, and of the
terms upon which the Debt Securities are, and are to be, authenticated and
delivered. This Note is one of the series of Debt Securities designated as
"Medium-Term Notes, Series B" (the "Notes"). All terms used but not defined in
this Note specified on the face hereof or in an Addendum hereto shall have the
meanings assigned to such terms in the Indenture.
This Note is issuable only in fully-registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the applicable Redemption Price (as defined below), together with unpaid
interest accrued thereon to the date fixed for redemption (each, a "Redemption
Date"), on notice given to the holders hereof no more than 60 nor less than 30
calendar days prior to the Redemption Date and in accordance with the provisions
of the Indenture. The "Redemption Price" shall initially be the Initial
Redemption Percentage specified on the face hereof multiplied by the unpaid
principal amount of this Note to be redeemed. The Initial Redemption Percentage
shall decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof until the
Redemption Price is 100% of the unpaid principal amount to be redeemed. In the
event of redemption of this Note in part only, a new Note of like tenor for the
unredeemed portion hereof and otherwise having the same terms as this Note shall
be issued in the name of the holder hereof upon the presentation and surrender
hereof.
This Note will be subject to repayment by the Company at the option of
the holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 45 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
FLR-5
<PAGE>
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on
the face hereof as a "Floating Rate/Fixed Rate Note", an "Inverse
Floating Rate Note" or as having an Addendum attached, this Note shall
be designated as a "Regular Floating Rate Note" and, except as set
forth below or on the face hereof, shall bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases
(a) plus or minus the Spread, if any, and/or (b) multiplied by the
Spread Multiplier, if any, in each case as specified on the face
hereof. Commencing on the Initial Interest Reset Date, the rate at
which interest on this Note shall be payable shall be reset as of each
Interest Reset Date specified on the face hereof; provided, however,
that the interest rate in effect for the period, if any, from the
Original Issue Date to the Initial Interest Reset Date shall be the
Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note", then, except as set
forth below or on the face hereof, this Note shall bear interest at the
rate determined by reference to the applicable Interest Rate Basis or
Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by
the Spread Multiplier, if any. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note shall be payable shall be
reset as of each Interest Reset Date; provided, however, that (y) the
interest rate in effect for the period, if any, from the Original Issue
Date to the Initial Interest Reset Date shall be the Initial Interest
Rate and (z) the interest rate in effect for the period commencing on
the Fixed Rate Commencement Date specified on the face hereof to the
Maturity Date shall be the Fixed Interest Rate specified on the face
hereof or, if no such Fixed Interest Rate is specified, the interest
rate in effect hereon on the day immediately preceding the Fixed Rate
Commencement Date.
(iii) If the Interest Category of this Note is specified on
the face hereof as an "Inverse Floating Rate Note", then, except as set
forth below or on the face hereof, this Note shall bear interest at the
Fixed Interest Rate minus the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread,
if any, and/or (b) multiplied by the Spread Multiplier, if any;
provided, however, that, unless otherwise specified on the face hereof,
the interest rate hereon shall not be less than zero. Commencing on the
Initial Interest Reset Date, the rate at which interest on this Note
shall be payable shall be reset as of each Interest Reset Date;
provided, however, that the interest rate in effect for the period, if
any, from the Original Issue Date to the Initial Interest Reset Date
shall be the Initial Interest Rate.
Notwithstanding the foregoing, if this Note is designated as having an
Addendum on the face hereof, this Note shall bear interest in accordance with
the terms of the Addendum.
Unless otherwise specified on the face hereof, the rate with respect to
each Interest Rate Basis will be determined in accordance with the applicable
provisions below. Except as set forth above or on the face hereof, the interest
rate in effect on each day shall be (i) if such day is an Interest Reset Date,
the interest rate determined as of the Interest Determination Date (as defined
below) immediately preceding such Interest Reset Date or (ii) if such day is not
an Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding the next preceding Interest Reset Date.
If any Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the next succeeding
Business Day, except that if LIBOR is an applicable Interest Rate Basis and such
Business Day falls in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York, or, if LIBOR is an applicable Interest Rate Basis, in London.
The "Interest Determination Date" with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will
be the second Business Day immediately preceding the applicable Interest Reset
Date; the "Interest Determination Date" with respect to the Eleventh District
Cost of Funds Rate shall be the last working day of the month immediately
preceding the applicable Interest Reset Date on which the Federal Home Loan Bank
of San Francisco (the "FHLB of San Francisco") publishes the Index (as defined
below); and the "Interest Determination Date" with respect to LIBOR shall be the
second London Business Day immediately preceding the applicable Interest Reset
Date. The "Interest Determination Date" with
FLR-6
<PAGE>
respect to the Treasury Rate shall be the day in the week in which the
applicable Interest Reset Date falls on which day Treasury Bills (as defined
below) are normally auctioned (Treasury Bills are normally sold at an auction
held on Monday of each week, unless that day is a legal holiday, in which case
the auction is normally held on the following Tuesday, except that such auction
may be held on the preceding Friday); provided, however, that if an auction is
held on the Friday of the week preceding the applicable Interest Reset Date, the
Interest Determination Date shall be such preceding Friday; and provided,
further, that if an auction falls on any Interest Reset Date, then the related
Interest Reset Date will instead be the first Business Day following such
auction. If the interest rate of this Note is determined with reference to two
or more Interest Rate Bases specified on the face hereof, the "Interest
Determination Date" pertaining to this Note shall be the most recent Business
Day which is at least two Business Days prior to the applicable Interest Reset
Date on which each Interest Rate Basis is determinable. Each Interest Rate Basis
shall be determined as of such date, and the applicable interest rate shall take
effect on the related Interest Reset Date.
CD Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication ("H.15(519)") under the
heading "CDs (Secondary Market)", or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date (as defined below), the rate on such
CD Rate Interest Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for United States Government Securities" or any successor publication
("Composite Quotations") under the heading "Certificates of Deposit". If such
rate is not yet published in either H.15(519) or Composite Quotations by 3:00
P.M., New York City time, on the related Calculation Date, then the CD Rate on
such CD Rate Interest Determination Date will be calculated by the Calculation
Agent specified on the face hereof and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such CD
Rate Interest Determination Date, of three leading nonbank dealers in negotiable
United States dollar certificates of deposit in The City of New York selected by
the Calculation Agent for negotiable certificates of deposit of major United
States money center banks for negotiable United States dollar certificates of
deposit with a remaining maturity closest to the Index Maturity in an amount
that is representative for a single transaction in that market at that time;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the CD Rate determined as of such CD
Rate Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
CMT Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CMT rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on the Designated CMT Telerate Page (as defined
below) under the caption ". . .Treasury Constant Maturities. . .Federal Reserve
Board Release H.15. . .Mondays Approximately 3:45 P.M.", under the column for
the Designated CMT Maturity Index (as defined below) for (i) if the Designated
CMT Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date
and (ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week, or month, as applicable, in
which the related CMT Rate Interest Determination Date occurs. If such rate is
no longer displayed on the relevant page or is not displayed by 3:00 P.M., New
York City time, on the related Calculation Date, then the CMT Rate for such CMT
Rate Interest Determination Date will be such treasury constant maturity rate
for the Designated CMT Maturity Index as published in H.15(519). If such rate is
no longer published or is not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate on such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in
H.15(519). If such information is not provided by 3:00 P.M., New York City time,
on the related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offered rates as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date reported, according to their written records,
by three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with
FLR-7
<PAGE>
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent is unable to obtain three such Treasury
Note quotations, the CMT Rate on such CMT Rate Interest Determination Date will
be calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offered rates as of approximately
3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of
three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least U.S.$100 million. If
three or four (and not five) of such Reference Dealers are quoting as described
above, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated; provided, however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as mentioned herein, the CMT Rate
determined as of such CMT Rate Interest Determination Date will be the CMT Rate
in effect on such CMT Rate Interest Determination Date. If two Treasury Notes
with an original maturity as described in the second preceding sentence have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the Calculation Agent will obtain from five Reference Dealers quotations for the
Treasury Note with the shorter remaining term to maturity.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the Designated
CMT Maturity Index shall be two years.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service (or any successor service) on the page specified on the face
hereof (or any other page as may replace such page on that service for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519)) for
the purpose of displaying Treasury Constant Maturities as reported in H.15(519).
If no such page is specified on the face hereof, the Designated CMT Telerate
Page shall be 7052 for the most recent week.
Commercial Paper Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as the Money Market Yield
(as defined below) on such date of the rate for commercial paper having the
Index Maturity as published in H.15(519) under the heading "Commercial Paper".
In the event that such rate is not published by 3:00 P.M., New York City time,
on such Calculation Date, then the Commercial Paper Rate on such Commercial
Paper Rate Interest Determination Date will be the Money Market Yield of the
rate for commercial paper having the Index Maturity as published in Composite
Quotations under the heading "Commercial Paper" (with an Index Maturity of one
month or three months being deemed to be equivalent to an Index Maturity of 30
days or 90 days, respectively). If such rate is not yet published in either
H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on such
Calculation Date, then the Commercial Paper Rate on such Commercial Paper Rate
Interest Determination Date will be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in The
City of New York (which may include the Agents or their affiliates) selected by
the Calculation Agent for commercial paper having the Index Maturity placed for
an industrial issuer whose bond rating is "AA", or the equivalent from a
nationally recognized statistical rating organization; provided, however, that
if the dealers so selected by the Calculation Agent are not quoting as mentioned
in this sentence, the Commercial Paper Rate determined as of such Commercial
Paper Rate Interest Determination Date will be the Commercial Paper Rate in
effect on such Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Period for which interest is being calculated.
FLR-8
<PAGE>
Eleventh District Cost of Funds Rate. If an Interest Rate Basis for
this Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 as of 11:00
A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding the
date of such announcement. If the FHLB of San Francisco fails to announce the
Index on or prior to such Eleventh District Cost of Funds Rate Interest
Determination Date for the calendar month immediately preceding such Eleventh
District Cost of Funds Rate Interest Determination Date, the Eleventh District
Cost of Funds Rate determined as of such Eleventh District Cost of Funds Rate
Interest Determination Date will be the Eleventh District Cost of Funds Rate in
effect on such Eleventh District Cost of Funds Rate Interest Determination Date.
Federal Funds Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Federal Funds Rate, the Federal Funds Rate
shall be determined as of the applicable Interest Determination Date (a "Federal
Funds Rate Interest Determination Date") as the rate on such date for United
States dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)" or, if not published by 3:00 P.M., New York City time, on the
Calculation Date, the rate on such Federal Funds Rate Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate". If such rate is not published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on the related
Calculation Date, then the Federal Funds Rate on such Federal Funds Interest
Determination Date shall be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight United States
dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent, prior to 9:00 A.M., New York City
time, on such Federal Funds Rate Interest Determination Date; provided, however,
that if the brokers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate determined as of such Federal
Funds Rate Interest Determination Date will be the Federal Funds Rate in effect
on such Federal Funds Rate Interest Determination Date.
LIBOR. (i) If an Interest Rate Basis for this Note is specified on the
face hereof as LIBOR, the interest rate shall be determined as of the applicable
Interest Determination Date (a "LIBOR Interest Determination Date") as the rate
on such date for deposits in U.S. Dollars having the Index Maturity specified on
the face hereof commencing on the second London Business Day immediately
following that LIBOR Interest Determination Date that appears on Telerate Page
3750 as of 11:00 A.M., London time, on such LIBOR Interest Determination Date.
If fewer than two such offered rates appear, or if no such rate appears, as
applicable, LIBOR on such LIBOR Interest Determination Date shall be determined
in accordance with the provisions described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on
Telerate Page 3750 as specified in clause (i) above, the Calculation Agent shall
request the principal London offices of each of four major reference banks in
the London interbank market, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotation for deposits in U.S. Dollars
for the period of the Index Maturity specified on the face hereof, commencing on
the second London Business Day immediately following such LIBOR Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in
U.S. Dollars in such market at such time. If at least two such quotations are so
provided, then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two such quotations are so
provided, then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M. in The City of
New York, on such LIBOR Interest Determination Date by three major banks in The
City of New York (which may include the Agents or their affiliates) selected by
the Calculation Agent for loans in U.S. Dollars to leading European banks,
having the Index Maturity and in a principal amount that is representative for a
single transaction in U.S. Dollars in such market at such time; provided,
however, that if the banks so selected by the Calculation Agent are not quoting
as mentioned in this sentence, LIBOR determined as of such LIBOR Interest
Determination Date shall be LIBOR in effect on such LIBOR Interest Determination
Date.
FLR-9
<PAGE>
Prime Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
heading "Bank Prime Loan". If such rate is not published prior to 3:00 P.M., New
York City time, on the related Calculation Date, then the Prime Rate shall be
the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen USPRIME1 (as defined below) as such bank's
prime rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates, but more than one such rate,
appear on the Reuters Screen, USPRIME1 for such Prime Rate Interest
Determination Date, the Prime Rate shall be the arithmetic mean of the prime
rates or base lending rates quoted on the basis of the actual number of days in
the year divided by a 360-day year as of the close of business on such Prime
Rate Interest Determination Date by four major money center banks (which may
include the Agents or their affiliates) in The City of New York selected by the
Calculation Agent. If fewer than four such quotations are so provided, the Prime
Rate shall be determined by the Calculation Agent as the arithmetic mean of four
prime rates quoted on the basis of the actual number of days in the year divided
by a 360-day year as of the close of business on such Prime Rate Interest
Determination Date as furnished in The City of New York by substitute banks or
trust companies (which may include the Agents or their affiliates) to obtain
such prime rate quotations, provided such substitute banks or trust companies
are organized and doing business under the laws of the United States, or any
State thereof, each having total equity capital of at least U.S.$500 million and
being subject to supervision or examination by Federal or State authority,
selected by the Calculation Agent to provide such rate or rates; provided,
however, that if the banks or trust companies so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Prime Rate determined
as of such Prime Rate Interest Determination Date will be the Prime Rate in
effect on such Prime Rate Interest Determination Date.
Treasury Rate. If an Interest Rate Basis for this Note is specified on
the face hereof as the Treasury Rate, the Treasury Rate shall be determined as
of the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate applicable to the most recent auction (the
"Auction") of direct obligations of the United States ("Treasury Bills") having
the Index Maturity specified on the face hereof, as such rate is published in
H.15(519) under the heading "Treasury Bills-auction average (investment)" or, if
not published by 3:00 P.M., New York City time, on the related Calculation Date,
the auction average rate of such Treasury Bills (expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the U.S. Department of the Treasury. In the
event that the results of the Auction of Treasury Bills having the Index
Maturity are not reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date, or if no such Auction is held in a particular week, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Rate Interest Determination Date, of three leading
primary U.S. government securities dealers (which may include the Agents or
their affiliates) selected by the Calculation Agent, for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity; provided,
however, that if the dealers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the Treasury Rate determined as of such
Treasury Rate Interest Determination Date will be the Treasury Rate in effect on
such Treasury Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application. The Calculation Agent shall calculate the interest rate
hereon on or before each Calculation Date. The "Calculation Date", if
applicable, pertaining to any Interest Determination Date shall be the earlier
of (i) the tenth calendar day after such Interest Determination Date or, if such
day is not a Business Day, the next succeeding Business Day or (ii) the Business
Day immediately preceding the applicable Interest Payment Date or the Maturity
Date, as the case may be. At the request of the Holder hereof, the Calculation
Agent will provide to the Holder hereof the interest rate hereon then in effect
and, if determined, the interest rate that will become effective as a result of
a determination made for the next succeeding Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying
the principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified in the Day Count
Convention on the face hereof, the interest factor for each such day shall be
computed by dividing the interest rate applicable to such day by 360, if the
applicable Interest Rate Basis is the CD Rate, the Commercial Paper Rate, the
Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR or the Prime
Rate, or by the actual number of days in the year if the applicable Interest
Rate Basis is the CMT Rate or the Treasury Rate. Unless otherwise
FLR-10
<PAGE>
specified in the Day Count Convention on the face hereof, the interest factor
for this Note, if the interest rate is calculated with reference to two or more
Interest Rate Bases, shall be calculated in each period in the same manner as if
only the Applicable Interest Rate Basis specified on the face hereof applied.
All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards, and all amounts used in or
resulting from such calculation on this Note shall be rounded to the nearest
cent or (with one-half cent being rounded upwards).
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture. The Indenture contains
provisions for defeasance of (i) the entire indebtedness of the Notes or (ii)
certain covenants and Events of Default with respect to the Notes, in each case
upon compliance with certain conditions set forth therein, which provisions
apply to the Notes.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Debt Securities at any time by the
Company and the Trustee with the consent of the holders of not less than a
majority of the aggregate principal amount of all Debt Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority of the aggregate principal
amount of the outstanding Debt Securities of any series, on behalf of the
holders of all such Debt Securities, to waive compliance by the Company with
certain provisions of the Indenture. Furthermore, provisions in the Indenture
permit the holders of not less than a majority of the aggregate principal amount
of the outstanding Debt Securities of any series, in certain instances, to
waive, on behalf of all of the holders of Debt Securities of such series,
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note shall be conclusive and binding
upon such holder and upon all future holders of this Note and other Notes issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula herein prescribed.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal hereof
and any premium or interest hereon are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
FLR-11
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ____________ Custodian ___________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
---------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - _______
-------------------------------------------
-------------------------------------------
-------------------------------------------
(Please print or type name and address
including postal zip code of assignee)
this Note and all rights thereunder hereby irrevocably constituting and
appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ ____________________________________
------------------------------------
Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of
this Note in every particular,
without alteration or enlargement or
any change whatsoever.
FLR-12
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or the portion hereof specified below) pursuant to
its terms at a price equal to 100% of the principal amount to be repaid,
together with unpaid interest accrued hereon to the Repayment Date, to the
undersigned, at:
-------------------------------------
-------------------------------------
-------------------------------------
(Please print or type name and
address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at 14 Wall Street, 8th Floor, Window 2, New York, New York 10005, not
more than 60 nor less than 45 calendar days prior to the Repayment Date, this
Note with this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000) which the
holder elects to have repaid and specify the denomination or denominations
(which shall be an Authorized Denomination) of the Notes to be issued to the
holder for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $_______________ ___________________________________________
Denomination of Note(s) ___________________________________________
not being Repaid: $___________
Date: ________________________ Notice: The signature(s) on this Option to
Elect Repayment must correspond with the
name(s) as written upon the face of this
Note in every particular, without alteration
or enlargement or any change whatsoever.
FLR-13
Exhibit 4.3
[FACE OF NOTE]
LOWE'S COMPANIES, INC.
MEDIUM-TERM NOTE, SERIES B
(Fixed Rate)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.
REGISTERED CUSIP No.: PRINCIPAL
No. FXR- _____ __________ AMOUNT: _______________
LOWE'S COMPANIES, INC.
MEDIUM-TERM NOTE, SERIES B
(Fixed Rate)
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY DATE:
INTEREST PAYMENT DATE(S) DEFAULT RATE: %
[ ] _______ and ______
[ ] Other:
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE
REDUCTION: %
OPTIONAL REPAYMENT
DATE(S):
AUTHORIZED DENOMINATION:
[ ] $1,000 and integral
multiples thereof
[ ] Other:
ADDENDUM ATTACHED OTHER/ADDITIONAL PROVISIONS:
[ ] Yes
[ ] No
FXR-1
<PAGE>
LOWE'S COMPANIES, INC., a North Carolina corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________, or
registered assigns, the principal sum of U.S. $ ________, on the Stated Maturity
Date specified above (or any Redemption Date or Repayment Date, each as defined
on the reverse hereof) (each such Stated Maturity Date, Redemption Date or
Repayment Date being hereinafter referred to as the "Maturity Date" with respect
to the principal repayable on such date) and to pay interest thereon, at the
Interest Rate per annum specified above from the Original Issue Date shown
above, until the principal hereof is paid or duly made available for payment,
and (to the extent that the payment of such interest shall be legally
enforceable) at the Default Rate per annum specified above on any overdue
principal, premium and/or interest. The Company will pay interest in arrears on
each Interest Payment Date, if any, specified above (each, an "Interest Payment
Date"), commencing with the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Maturity Date; provided,
however, that if the Original Issue Date occurs between a Record Date (as
defined below) and the next succeeding Interest Payment Date, interest payments
will commence on the second Interest Payment Date next succeeding the Original
Issue Date to the holder of this Note on the Record Date with respect to such
second Interest Payment Date. Interest on this Note will be computed on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day, as defined below) immediately preceding such Interest
Payment Date (the "Record Date"); provided, however, that interest payable on
the Maturity Date will be payable to the person to whom the principal hereof and
premium, if any, hereon shall be payable. Any such interest not so punctually
paid or duly provided for ("Defaulted Interest") will forthwith cease to be
payable to the holder on any Record Date, and shall be paid to the person in
whose name this Note is registered at the close of business on a special record
date (the "Special Record Date") for the payment of such Defaulted Interest to
be fixed by the Trustee hereinafter referred to, notice whereof shall be given
to the holder of this Note by the Trustee not less than 15 calendar days prior
to such Special Record Date or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which this Note may be listed, and upon such notice as may be required by such
exchange, all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, a duly completed election form as contemplated on the
reverse hereof) at the corporate trust office of the Trustee maintained for that
purpose in the Borough of Manhattan, The City of New York, currently located at
14 Wall Street, 8th Floor, Window 2, New York, New York, 10005, or at such other
paying agency in the Borough of Manhattan, The City of New York, as the Company
may determine. As long as this Note is registered in the name of DTC or its
nominee, the Trustee will make payments of interest due on any Interest Payment
Date by wire transfer of immediately available funds to DTC or its nominee.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest, as the case may be, shall be made on the next succeeding
Business Day with the same force and effect as if made on the date such payment
was due, and no interest shall accrue with respect to such payment for the
period from and after such Interest Payment Date or the Maturity Date, as the
case may be, to the date of such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or executive order to close in The City of New
York.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in U.S. Dollars.
FXR-2
<PAGE>
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF AND, IF SO SPECIFIED ABOVE, IN THE ADDENDUM HERETO,
WHICH FURTHER PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH ON
THE FACE HEREOF.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
FXR-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed in its corporate name by the facsimile signatures of its Chairman of
the Board of Directors, its President, or one of its Vice Presidents, and its
Secretary or an Assistant Secretary and impressed or imprinted with its
corporate seal or a facsimile thereof.
LOWE'S COMPANIES, INC.
-------------------------------
By:
Its:
ATTEST:
By:____________________________
[Assistant] Secretary
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:____________________________
Authorized Signatory
FXR-4
<PAGE>
[REVERSE OF NOTE]
LOWE'S COMPANIES, INC.
MEDIUM-TERM NOTE, SERIES B
(Fixed Rate)
This Note is one of a duly authorized series of Debt Securities (the
"Debt Securities") of the Company, issued and to be issued under the Amended and
Restated Indenture, dated as of December 1, 1995, as may be further amended,
modified or supplemented from time to time (the "Indenture"), between the
Company and The First National Bank of Chicago, as Trustee (the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the holders of the Debt Securities, and of the
terms upon which the Debt Securities are, and are to be, authenticated and
delivered. This Note is one of the series of Debt Securities designated as
"Medium-Term Notes Due Nine Months or More From Date of Issue, Series B" (the
"Notes"). All terms used but not defined in this Note specified on the face
hereof or in an Addendum hereto shall have the meanings assigned to such terms
in the Indenture.
This Note is issuable only in fully-registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the applicable Redemption Price (as defined below), together with unpaid
interest accrued thereon to the date fixed for redemption (each, a "Redemption
Date"), on notice given to the holders hereof no more than 60 nor less than 30
calendar days prior to the Redemption Date and in accordance with the provisions
of the Indenture. The "Redemption Price" shall initially be the Initial
Redemption Percentage specified on the face hereof multiplied by the unpaid
principal amount of this Note to be redeemed. The Initial Redemption Percentage
shall decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof until the
Redemption Price is 100% of the unpaid principal amount to be redeemed. In the
event of redemption of this Note in part only, a new Note of like tenor for the
unredeemed portion hereof and otherwise having the same terms as this Note shall
be issued in the name of the holder hereof upon the presentation and surrender
hereof.
This Note will be subject to repayment by the Company at the option of
the holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 45 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture. The Indenture contains
provisions for defeasance of (i) the entire indebtedness of the Notes or (ii)
certain covenants and Events of Default with respect to the Notes, in each case
upon compliance with certain conditions set forth therein, which provisions
apply to the Notes.
FXR-5
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Debt Securities at any time by the
Company and the Trustee with the consent of the holders of not less than a
majority of the aggregate principal amount of all Debt Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority of the aggregate principal
amount of the outstanding Debt Securities of any series, on behalf of the
holders of all such Debt Securities, to waive compliance by the Company with
certain provisions of the Indenture. Furthermore, provisions in the Indenture
permit the holders of not less than a majority of the aggregate principal amount
of the outstanding Debt Securities of any series, in certain instances, to
waive, on behalf of all of the holders of Debt Securities of such series,
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note shall be conclusive and binding
upon such holder and upon all future holders of this Note and other Notes issued
upon the registration of transfer hereof or in exchange heretofore or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula herein prescribed.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal hereof
and any premium or interest hereon are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
FXR-6
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ____________ Custodian ___________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ________
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(Please print or type name and address
including postal zip code of assignee)
this Note and all rights thereunder hereby irrevocably constituting and
appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ __________________________________________
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Notice: The signature(s) on this Assignment
must correspond with the name(s) as written
upon the face of this Note in every
particular, without alteration or
enlargement or any change whatsoever.
FXR-7
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or the portion hereof specified
below) pursuant to its terms at a price equal to 100% of the principal amount to
be repaid, together with unpaid interest accrued hereon to the Repayment Date,
to the undersigned, at
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---------------------------------
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(Please print or type name
and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at 14 Wall Street, 8th Floor, Window 2, New York, New York 10005, not
more than 60 nor less than 45 calendar days prior to the Repayment Date, this
Note with this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000) which the
holder elects to have repaid and specify the denomination or denominations
(which shall be an Authorized Denomination) of the Notes to be issued to the
holder for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $_____________ ____________________________________
Denomination of Note(s) not being Repaid ____________________________________
Date: _____________________ Notice: The signature(s) on this
Option to Elect Repayment must
correspond with the name(s) as
written upon the face of this Note
in every particular, without
alteration or enlargement or any
change whatsoever.
FXR-8
