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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 - July 1, 1994
(Date of earliest event reported)
J. C. PENNEY COMPANY, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 1-777
Delaware 13-5583779
- - ------------------------ --------------------
(State of incorporation) (IRS Employer
Identification No.)
6501 Legacy Drive
Plano, Texas 75024-3698
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (214) 431-1000
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Item 5. Other Events.
On July 1, 1994, J. C. Penney Company, Inc. ("Company") entered into an
Agency Agreement with CS First Boston Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, J. P. Morgan Securities Inc., and Morgan Stanley &
Co. Incorporated, as agents for the sale from time to time of its Medium-Term
Notes, Series A ("Notes") not to exceed $1,000,000,000 in aggregate principal
amount at prices to the public to be determined at the time of sale. The Notes
are registered on Registration Statement No. 33- 53275 ("Registration
Statement"), which was filed with the Securities and Exchange Commission
("Commission") on April 26, 1994 and became effective on April 29, 1994. A
Prospectus Supplement relating to the Notes was filed with the Commission on
July 1, 1994. Pursuant to the Registration Statement, $1,500,000,000 aggregate
principal amount of debt securities were registered for offering under the
Securities Act of 1933 on a continuous or delayed basis pursuant to the
provisions of Rule 415.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
1. Agency Agreement among J. C. Penney Company, Inc. and CS First
Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J. P. Morgan Securities Inc., and Morgan Stanley &
Co. Incorporated dated July 1, 1994.
4. Form of Notes (filed as Exhibits 4(f)(vii) and (viii) to
Registrant's Registration Statement on Form S-3 File No 33- 53275,
and incorporated herein by reference).
5. Opinion of C. R. Lotter with respect to the validity of the Notes.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
J. C. PENNEY COMPANY, INC.
/S/ C. R. Lotter
C. R. Lotter
Executive Vice President,
Secretary and General Counsel
Date: July 6, 1994
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EXHIBIT INDEX
Exhibit
Number Description
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1 Agency Agreement among J. C. Penney Company, Inc. and CS First
Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J. P. Morgan Securities Inc., and Morgan Stanley &
Co. Incorporated dated July 1, 1994.
4 Form of Notes (filed as Exhibits 4(f)(vii) and (viii) to
Registrant's Registration Statement on Form S-3 File No 33- 53275,
and incorporated herein by reference).
5 Opinion of C. R. Lotter with respect to the validity of the Notes.
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$1,000,000,000
J. C. PENNEY COMPANY, INC.
Medium-Term Notes
AGENCY AGREEMENT
July 1, 1994
CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower,
World Financial Center,
New York, New York 10281-1310
Morgan Stanley & Co. Incorporated,
1221 Avenue of the Americas,
New York, New York 10020.
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Sirs:
1. Introduction. J. C. PENNEY COMPANY, INC., a Delaware
corporation ("Issuer"), confirms its agreement with each of you (individually,
an "Agent" and collectively, "Agents") with respect to the issue and sale from
time to time by the Issuer of its medium-term notes registered under the
Registration Statement referred to in Section 2(a) (any such medium-term notes
being hereinafter referred to as the "Securities", which expression shall, if
the context so admits, include any permanent global Security), but the Issuer
reserves the right to sell Securities on its own behalf directly or through
affiliates, and upon notice to each of you, to enter into agreements
substantially identical hereto with other agents. Securities may be sold
pursuant to Section 3 of this Agreement or as contemplated by Section 11 of
this Agreement in an aggregate amount not to exceed the amount of Registered
Securities (as defined in Section 2(a) hereof) registered pursuant to such
Registration Statement reduced by the aggregate amount of any other Registered
Securities sold otherwise than pursuant to Section 3 of this Agreement. The
Securities will be issued under an indenture, dated as of April 1, 1994 (said
Indenture, and all indentures supplemental thereto, being
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hereinafter called the "Indenture"), between the Issuer and Bank of America
National Trust and Savings Association, as trustee ("Trustee").
The Securities shall have the terms described in the Prospectus
referred to in Section 2(a) as it may be amended or supplemented from time to
time, including any supplement to the Prospectus that sets forth only the terms
of a particular issue of the Securities ("Pricing Supplement"). Securities will
be issued, and the terms thereof established, from time to time by the Issuer
in accordance with the Indenture and the Procedures (as defined in Section 3(d)
hereof).
2. Representations and Warranties of the Issuer. The Issuer
represents and warrants to, and agrees with, each Agent as follows:
(a) A Registration Statement (No. 33-53275), including a prospectus, relating
to debt securities of the Issuer, including the Securities ("Registered
Securities"), has been filed with the Securities and Exchange Commission
("Commission") and has become effective under the Securities Act of 1933
("Act"). Such Registration Statement, as amended as of the Closing Date (as
defined in Section 3(e) hereof), is hereinafter referred to as the
"Registration Statement", and the prospectus included in such Registration
Statement, as supplemented as of the Closing Date, including all material
incorporated by reference therein, is hereinafter referred to as the
"Prospectus". Any reference in this Agreement to amending or supplementing the
Prospectus shall be deemed to include the filing of materials incorporated by
reference in the Prospectus after the Closing Date and any reference in this
Agreement to any amendment or supplement to the Prospectus shall be deemed to
include any such materials incorporated by reference in the Prospectus after
the Closing Date.
(b) On the effective date of the Registration Statement
relating to the Registered Securities, such Registration Statement
conformed in all respects to the requirements of the Act, the Trust
Indenture Act of 1939, as amended, ("Trust Indenture Act") and the
rules and regulations of the Commission ("Rules and Regulations") and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the Closing Date,
the Registration Statement and the Prospectus; and at each of the
times of acceptance and of delivery referred to in Section 6(a) hereof
and at each of the times of amendment or supplementing referred to in
Section 6(b) hereof (the Closing Date and each such time being herein
sometimes referred to as a "Representation Date"), the Registration
Statement and the Prospectus as then amended or supplemented will
conform in all respects to the requirements of the Act; the Trust
Indenture Act and the Rules and Regulations, and neither of such
documents will include any untrue statement of a material fact or will
omit to state any material fact required to be stated
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therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that
the foregoing does not apply to statements in or omissions from any of
such documents based upon (i) written information furnished to the
Issuer by any Agent specifically for use therein or (ii) that part of
the Registration Statement constituting the Statement of Eligibility
and Qualification under the Trust Indenture Act (Form T-1) of the
Trustee.
3. Appointment as Agents; Agreement of Agents; Solicitations
as Agents.
(a) Subject to the terms and conditions stated herein, and
subject to the right of the Issuer to sell Securities on its own
behalf directly or through affiliates or through other agents, the
Issuer hereby appoints each of the Agents as a non-exclusive agent of
the Issuer for the purpose of soliciting or receiving offers to
purchase the Securities from the Issuer by others.
(b) On the basis of the representations and warranties
contained herein, but subject to the terms and conditions herein set
forth, each Agent agrees, as an agent of the Issuer, to use reasonable
best efforts when requested by the Issuer to solicit offers to,
purchase the Securities upon the terms and conditions set forth in the
Prospectus, as from time to time amended or supplemented.
Upon receipt of notice from the Issuer as contemplated by Section 4(b)
hereof, each Agent shall promptly suspend its solicitation of offers to
purchase Securities until such time as the Issuer shall have furnished it with
an amendment or supplement to the Registration Statement or the Prospectus, as
the case may be, contemplated by Section 4(b) and shall have advised such Agent
that such solicitation may be resumed.
The Issuer reserves the right in its sole discretion, to suspend
solicitation of offers to purchase the Securities commencing at any time for
any period of time or permanently. Upon receipt of at least one Business Day's
prior notice from the Issuer, the Agents will immediately suspend solicitation
of offers to purchase Securities from the Issuer until such time as the Issuer
has advised the Agents that such solicitation may be resumed. For the purpose
of the foregoing sentence, "Business Days" shall mean any day that is not a
Saturday or Sunday, and that in The City of New York is not a day on which
banking institutions generally are authorized or obligated by law or executive
order to close.
The Agents are authorized to solicit offers to purchase Securities as
described in the Prospectus, as amended or supplemented, and only in a minimum
aggregate amount of $100,000
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with integral multiples of $1,000 in excess thereof (or the equivalent thereof
in one or more currencies or currency units other than U.S. dollars). Each
Agent shall communicate to the Issuer, orally or in writing, each reasonable
offer to purchase Securities received by it as agent. The Issuer shall have the
sole right to accept offers to purchase the Securities and may reject any such
offer, in whole or in part. Each Agent shall have the right, in its discretion
reasonably exercised, without notice to the Issuer, to reject any offer to
purchase Securities received by it, in whole or in part, and any such rejection
shall not be deemed a breach of its agreement contained herein.
No Security which the Issuer has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold by the
Issuer, until such Security shall have been delivered to the purchaser thereof
against payment by such purchaser.
(c) At the time of delivery of, and payment for, any
Securities sold by the Issuer as a result of a solicitation made by,
or offer to purchase received by, an Agent, the Issuer agrees to pay
such Agent a commission in accordance with the schedule set forth in
Exhibit A hereto.
(d) Administrative procedures respecting the sale of
Securities ("Procedures") shall be agreed upon from time to time by
the Agents and the Issuer. The initial Procedures which are set forth
in Exhibit B hereto, shall remain in effect until changed by agreement
among the Issuer and the Agents. Each Agent and the Issuer agree to
perform the respective duties and obligations specifically provided to
be performed by each of them herein and in the Procedures. The Issuer
will furnish to the Trustee a copy of the Procedures as from time to
time in effect.
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the office of Issuer, 6501 Legacy Drive, Plano,
Texas, not later than 10:00 a.m., New York City time, on the date at
this Agreement or at such later time as may be mutually agreed by the
Issuer and the Agents, which in no event shall be later than the time
at which the Agents commence solicitation of purchases of Securities
hereunder, such time and date being herein called the "Closing Date".
4. Certain Agreements of the Issuer. The Issuer agrees with
the Agents that it will furnish to Sullivan & Cromwell, counsel for the Agents,
one signed copy of the Registration Statement, including all exhibits, in the
form it became effective and of all amendments thereto and that, in connection
with each offering of Securities:
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(a) The Issuer will advise each Agent promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus
and of the institution by the Commission of any stop order proceedings
in respect of the Registration Statement or of any part thereof and
will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act and no suspension
of solicitation of offers to purchase Securities pursuant to Section
3(b) or this Section 4(b) shall be in effect (any such time and any
time when either any Agent shall own any Securities with the intention
of reselling them or the Issuer has accepted an offer to purchase
Securities but the related settlement has not occurred being referred
to herein as a "Marketing Time"), any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or if it is necessary at any such time to
amend the Prospectus to comply with the Act, the Issuer will promptly
notify each Agent to suspend solicitation of offers to purchase the
Securities; and if the Issuer shall decide to amend or supplement the
Registration Statement or the Prospectus, it will promptly advise each
Agent by telephone (with confirmation in writing) and, subject to the
provisions of subsection (a) of this Section, will promptly prepare
and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect
such compliance. Notwithstanding the foregoing, if, at the time any
such event occurs or it becomes necessary to amend the Prospectus to
comply with the Act, any Agent shall own any of the Securities with
the intention of reselling them, or the Issuer has accepted an offer
to purchase Securities but the related settlement has not occurred,
the Issuer, subject to the provisions of subsection (a) of this
Section, will promptly prepare and file with the Commission an
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance. Neither the Agents'
consent to, nor their delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in
Section 5.
(c) The Issuer will file promptly all documents required to be
filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act. In addition, on or prior to the date on
which the Issuer makes any announcement to the general public
concerning earnings or concerning any other event which is required to
be described, or which the Issuer prosposes to describe, in a document
filed pursuant to
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the Exchange Act, the Issuer will furnish the information contained or
to be contained in such announcement to each Agent, confirmed in
writing and, subject to the provisions of subsections (a) and (b) of
this Section, will cause the Prospectus to be amended or supplemented
to reflect the information contained in such announcement. The Issuer
also will furnish each Agent with copies of all material press
releases or announcements to the general public. The Issuer will
immediately notify each Agent of any downgrading in the rating of any
debt securities of the Issuer by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), with which the Company has an ongoing
relationship, or any public announcement that any such organization
has placed its rating of the Issuer's debt securities under
surveillance or review (other than an announcement with positive
implications of a possible upgrading) as soon as the Issuer learns of
such downgrading or public announcement.
(d) As soon as practicable, but not later than 16 months after
the date of each acceptance by the Issuer of an offer to purchase
Securities hereunder, the Issuer will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the
registration statement relating to the Registered Securities, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
acceptance and (iii) the date of the Issuer's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of
such acceptance, which will satisfy the provisions of Section 11(a) of
the Act.
(e) The Issuer will furnish to each Agent copies of the
Registration Statement, including all exhibits, the Prospectus and all
amendments and supplements to such documents (including any Pricing
Supplement), in each case as soon as available and in such quantities
as are reasonably requested.
(f) The Issuer will use its reasonable best efforts to arrange
for the qualification of the Securities for sale, and the
determination of their eligibility for investment, under the laws of
such jurisdictions as the Agents reasonably designate and will
diligently endeavor to continue such qualifications in effect so long
as required for the distribution of the Securities.
(g) So long as any Securities are outstanding, the Issuer will
furnish to the Agents, (i) as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year, (ii) as soon as practicable, a copy at each report or definitive
proxy statement of the Issuer filed with the Commission under the
Exchange Act or
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mailed to stockholders, and (iii) from time to time, such other
information concerning the Issuer as the Agents may reasonably
request.
(h) The Issuer will pay all reasonable expenses incident to
the performance of its obligations under this Agreement or any
agreement contemplated by Section 11 hereof and will reimburse each
Agent for any reasonable expenses (including reasonable fees and
disbursements of counsel) incurred by it in connection with
qualification of the Securities for sale, and determination of their
eligibility for investment under the laws of such jurisdictions as
such Agent may reasonably designate and the printing of memoranda
relating thereto, for any fees charged by investment rating agencies
for the rating of the Securities, for any filing fee of the National
Association of Securities Dealers, Inc. relating to the Securities,
for reasonable expenses incurred by each Agent in distributing the
Prospectus and all supplements thereto (including any Pricing
Supplement), any preliminary prospectuses and any preliminary
prospectus supplements to such Agent and for each Agent's reasonable
expenses (including the reasonable fees and disbursements of counsel
to the Agents) incurred in connection with the establishment or
maintenance of the program contemplated by this Agreement or otherwise
in connection with the activities of the Agents under this Agreement
(including any purchases of Notes by any Agent for resale as
contemplated by Section 11).
5. Conditions of Obligations of the Agents. The obligation of
each Agent under this Agreement at any time to solicit offers to purchase the
Securities is subject to the accuracy, on the date hereof, on each
Representation Date and on the date of each such solicitation, of the
representations and warranties of the Issuer herein, to the accuracy, on each
such date, of the statements of the Issuer's officers made pursuant to the
provisions hereof, to the performance, on or prior to each such date, by the
Issuer of its obligtions hereunder, and to each of the following additional
conditions precedent:
(a) The Prospectus, as amended or supplemented as of any
Representation Date or date of such solicitation, as the case may be,
shall have been filed with the Commission in accordance with the Rules
and Regulations and no stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Issuer or any Agent, shall be contemplated by
the Commission.
(b) Neither the Registration Statement nor the Prospectus, as
amended or supplemented as of any Representation Date or date of such
solicitation, as the case may be, shall contain any untrue statement
of fact or omit to
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state a fact which is required to be stated therein or is necessary to
make the statements therein not misleading, which, in the opinion of
Sullivan & Cromwell or counsel of the Issuer, is material.
(c) There shall not have occurred any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Issuer and
subsidiaries, taken as a whole, which, in the judgment of such Agent,
materially impairs the investment quality of the Securities.
(d) At the Closing Date, the Agents shall have received an
opinion, dated the Closing Date, of C. R. Lotter, Executive Vice
President, Secretary and General Counsel of the Issuer, to the effect
that:
(i) The Issuer has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus; and the Issuer is duly qualified
to do business as a foreign corporation in good standing in
all other jurisdictions in which it owns or leases substantial
properties or in which the conduct of its business requires
such qualification;
(ii) The Indenture has been duly authorized, executed
and delivered by the Issuer and has been duly qualified under
the Trust Indenture Act and constitutes a valid and legally
binding obligation of the Issuer enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights and to general equity principles;
(iii) The Securities have been duly authorized and
established in conformity with the Indenture, and, when the
terms of a particular Security and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, and such
Security has been duly completed, executed, authenticated and
issued in accordance with the Indenture and delivered against
payment as contemplated by this Agreement, such Security will
constitute a valid and legally binding obligation of the
Issuer enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles, it being understood that such counsel may (a)
assume that at the time of the issuance, sale and
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delivery of each Security the authorization of such series
will not have been modified or rescinded and there will not
have occurred any change in law affecting the validity,
legally binding character or enforceability of such Security,
(b) assume that neither the issuance, sale and delivery of any
Security, nor any of the terms of such Security, nor
compliance by the Issuer with such terms, will violate any
applicable law, any agreement or instrument then binding upon
the Issuer or any restriction imposed by any court or
governmental body having jurisdiction over the Issuer, and (c)
state that as of the date of such opinion a judgment for money
in an action based on Securities denominated in foreign
currencies or currency units in a Federal or State court in
the United States ordinarily would be enforced in the United
States only in United States dollars, and that the date used
to determine the rate of conversion of the foreign currency
or currency unit in which a particular Security is
denominated into United States dollars will depend upon
various factors, including which court renders the judgment;
(iv) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) under the Act
specified in such opinion on the date specified therein, and,
to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or
of any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or
contemplated under the Act, and the registration statement
relating to the Registered Securities, as of its effective
date, the Registration Statement and the Prospectus, as of the
Closing Date, and any amendment or supplement thereto, as of
its date, complied as to form in all material respects with
the requirements of the Act, the Trust Indenture Act and the
Rules and Regulations; there has not been disclosed to such
counsel any information giving him reason to believe that such
Registration Statement as of its effective date, the
Registration Statement or the Prospectus, as of the Closing
Date, or any such amendment or supplement, as of its date,
contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; the
descriptions in the Registration Statement and the Prospectus
of statutes, legal and governmental proceedings and contracts
and other documents are accurate in all material respects and
fairly present the information required to be shown; and such
counsel does not know of any legal or governmental proceedings
required to be described in the Prospectus
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which are not described as required, nor of any contracts or
documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not described
and filed as required; it being understood that such counsel
need express no opinion as to the financial statements or
other financial data contained in the Registration Statement
or the Prospectus;
(v) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance
and sale of the Securities by the Issuer, except such as have
been obtained and made under the Act and the Trust Indenture
Act and such as may be required under state securities laws
(it being understood that such counsel may assume with respect
to each particular Security that the inclusion of any
alternative or additional terms in such Security that are not
currently specified in the forms of Securities examined by
such counsel would not require the Issuer to obtain any
regulatory consent, authorization or approval or make any
regulatory filing in order for the Issuer to issue, sell and
deliver such Security);
(vi) The execution, delivery and performance of the
Indenture, this Agreement and the issuance and sale of the
Securities, and compliance with the terms and provisions
thereof, will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under,
any statute, any rule, regulation or order of any governmental
agency or body or any court having jurisdiction over the
Issuer or any of its property or any agreement or instrument
to which the Issuer is a party or by which the Issuer is bound
or to which any of the property of the Issuer is subject, or
the charter or by-laws of the Issuer, and the Issuer has full
power and authority to authorize, issue and sell the
Securities as contemplated by this Agreement (it being
understood that such counsel may assume with respect to each
particular Security that the inclusion of any alternative or
additional terms in such Security that are not currently
specified in the forms of Securities examined by such counsel
will not cause the issuance, sale or delivery of such
Security, the terms of such Security, or the compliance by the
Company with such terms, to violate any of the court orders or
laws specified in this paragraph or to result in a default
under or a breach of any of the agreements specified in this
paragraph); and
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(vii) This Agreement has been duly authorized,
executed and delivered by the Issuer.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the Closing Date, of the Chairman of the Board, any
Vice Chairman of the Board, the President of JCPenney Stores & Catalog
or any Vice President and a principal financial or accounting officer
of the Issuer in which such officers, to the best of their knowledge
after reasonable investigation, shall state that (i) the
representations and warranties of the Issuer in this Agreement are
true and correct, (ii) the Issuer has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, (iii) no stop order
suspending the effectiveness of the Registration Statement or of any
part thereof has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission, and (iv)
subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change in the financial
position or results of operations of the Issuer and its subsidiaries,
taken as a whole, which materially impairs the investment quality of
the Securities, except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(f) At the Closing Date, the Agents shall have received a
letter, dated the Closing Date, of KPMG Peat Marwick, in form and
substance satisfactory to the Agents, with respect to financial
statements and certain financial information contained in or
incorporated by reference in the Registration Statement and the
Prospectus. Such letter shall be in substantially the form, and
contain substantially the information, as those letters heretofore
furnished by KPMG Peat Marwick in connection with underwritten
offerings of the Issuer.
(g) The Agents shall have received from Sullivan & Cromwell,
counsel for the Agents, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the issuer, the validity of
the Securities, the Registration Statement, the Prospectus and to such
of the matters stated in paragraph 5(d) above and other related
matters as they may require, and the Issuer shall have furnished to
such counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.
The Issuer will furnish the Agents with such conformed copies
of such opinions, certificates, letters and documents as they reasonably
request.
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6. Additional Covenants of the Issuer. The Issuer agrees that:
(a) Each acceptance by the Issuer of an offer for the purchase
of Securities shall be deemed to be an affirmation that its
representations and warranties contained in this Agreement are true
and correct at the time of such acceptance and a covenant that such
representations and warranties will be true and correct at the time of
delivery to the purchaser of the Securities 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 the
Prospectus as amended or supplemented at each such time. Each such
acceptance by the Issuer of an offer to purchase of Securities shall
be deemed to constitute an additional representation, warranty and
agreement by the Issuer that, as of the settlement date for the sale
of such Securities, after giving effect to the issuance of such
Securities, of any other Securities to be issued on or prior to such
settlement date and of any other Registered Securities to be issued
and sold by the Issuer on or prior to such settlement date, the
aggregate amount of Registered Securities (including any Securities)
which have been issued and sold by the Issuer will not exceed the
amount of Registered Securities registered pursuant to the
Registration Statement.
(b) Each time that the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), the Issuer shall, (A) concurrently with such amendment or
supplement, if such amendment or supplement shall occur at a Marketing
Time, or (B) immediately at the next Marketing Time if such amendment
or supplement shall not occur at a Marketing Time, furnish the Agents
with a certificate, dated the date of delivery thereof, of the
Chairman of the Board, any Vice Chairman of the Board, the President
of JCPenney Stores and Catalog or any Vice President and a principal
financial or accounting officer of the Issuer, in form satisfactory to
the Agents, to the effect that the statements contained in the
certificate covering the matters set forth in Section 5(e) hereof
which was last furnished to the Agents are true and correct at the
time of such amendment or supplement, as though made at and as of such
time or, in lieu of such certificate, a certificate of the same tenor
as the certificate referred to in Section 5(e); provided, however, that
any certificate furnished under this Section 6(b) shall relate to the
Registration Statement and the Prospectus as amended or supplemented
at the time of delivery of such certificate and, in the case of the
matters set forth in clause (ii) of Section 5(e), to the time of
delivery of such certificate.
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<PAGE> 13
(c) At each Representation Date referred to in Section 6(b),
the Issuer shall, (A) concurrently if such Representation Date shall
occur at a Marketing Time, or (B) immediately at the next Marketing
Time if such Representation Date shall not occur at a Marketing Time,
furnish the Agents with a written opinion or opinions, dated the date
of such Representation Date, of counsel for the Issuer, in form
satisfactory to the Agents, to the effect set forth in Section 5(d)
hereof; provided, however, that to the extent appropriate such opinion
or opinions may reconfirm matters set forth in a prior opinion
delivered under Section 5(d) or this Section 6(c);provided further,
however, that any opinion or opinions furnished under this Section
6(c) shall relate to the Registration Statement and the Prospectus as
amended or supplemented at such Representation Date and shall state
that the Securities sold in the relevant Applicable Period (as defined
below) have been duly executed, authenticated, issued and delivered
and constitute valid and legally binding obligations of the Issuer
enforceable in accordance with their terms, subject only to the
exceptions set forth in clause (iii) of Section 5(d) hereof as to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles, and
conform to the description thereof contained in the Prospectus as
amended or supplemented at the relevant settlement date or dates for
the sale of such Securities. For the purpose of this Section 6(c),
"Applicable Period" shall mean with respect to any opinion delivered
on a Representation Date the period commencing on the date as of which
the most recent prior opinion delivered under Section 5(d) or this
Section 6(c) speaks and ending on such Representation Date.
(d) At each Representation Date referred to in Section 6(b) on
which the Registration Statement or the Prospectus shall be amended or
supplemented to include additional financial information, the Issuer
shall cause KPMG Peat Marwick, (A) concurrently if such Representation
Date shall occur at a Marketing Time, or (B) immediately at the next
Marketing Time if such Representation Date shall not occur at a
Marketing Time, to furnish the Agents with a letter, addressed jointly
to the Issuer and the Agents and dated the date of such Representation
Date, in form and substance satisfactory to the Agents, to the effect
set forth in Section 5(f) hereof; provided, however, that to the
extent appropriate such letter may reconfirm matters set forth in a
prior letter delivered pursuant to Section 5(f) or this Section
6(d);provided further, however, that any letter furnished under this
Section 6(d) shall relate to the Registration Statement and the
Prospectus as amended or supplemented at such Representation Date,
with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting
records of the Issuer.
13
<PAGE> 14
(e) On each settlement date for the sale of Securities, the
Issuer shall, if reasonably requested by the Agent that solicited or
received the offer to purchase any Securities being delivered on such
settlement date, furnish such Agent with a written opinion or
opinions, dated the date of delivery thereof, of counsel for the
Issuer, in form satisfactory to such Agent, to the effect set forth in
clauses (i), (ii) and (iii) of Section 5(d) hereof;provided, however,
that any opinion furnished under this Section 6(e) shall relate to the
Prospectus as amended or supplemented at such settlement date and
shall state that the Securities being sold by the Issuer on such
settlement date, when delivered against payment therefor as
contemplated by this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Issuer enforceable in accordance
with their terms, subject only to the exceptions set forth in clause
(iii) of Section 5(d) hereof as to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles, and will conform to the description thereof
contained in the Prospectus as amended or supplemented at such
settlement date.
(f) The Issuer agrees that any obligation of a person who has
agreed to purchase Securities to make payment for and take delivery of
such Securities shall be subject to (i) the accuracy, in all material
respects, on the related settlement date fixed pursuant to the
Procedures, of the Issuer's representation and warranty deemed to be
made to the Agents pursuant to the last sentence of subsection (a) of
this Section 6, and (ii) the satisfaction, on such settlement date, of
each of the conditions set forth in Sections 5(a), (b) and (c), it
being understood that under no circumstance shall any Agent have any
duty or obligation to exercise the judgment permitted under Section
5(b) or (c) on behalf of any such person.
7. Indemnification and Contribution.
(a) The Issuer will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several,
to which such Agent may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto (excluding any amendments or supplements relating to
securities which are not covered by this Agreement) arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein,
14
<PAGE> 15
in light of the circumstances under which they were made, not
misleading, and will reimburse each Agent for any legal or other
expenses reasonably incurred by such Agent in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred;provided, however, that the
Issuer will not be liable to such Agent in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made (i) in any of such documents in reliance upon
and in conformity with written information furnished to the Issuer by
such Agent for use therein, or (ii) in that part of the Registration
Statement constituting its Statement of Eligibility and Qualification
under the Trust Indenture Act (Form T-1) of the Trustee.
(b) Each Agent will indemnify and hold harmless the Issuer
against any losses, claims, damages or liabilities to which the Issuer
may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, the Prospectus or any amendment or supplement thereto
(excluding any amendments or supplements relating to securities which
are not covered by this Agreement), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by such
Agent for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Issuer in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under subsection (a) or (b) above,
notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise
than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party
15
<PAGE> 16
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but if settled with
such consent or if there has been a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be
entitled to contribution for liabilities and expenses, except to the
extent that contribution is not permitted under Section 11(f) of the
Act. In determining the amount of contribution to which the respective
parties are entitled, there shall be considered the relative benefits
received by each party from the offering of the Securities (taking
into account the portion of the proceeds of the offering realized by
each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission and
any other equitable considerations appropriate under the
circumstances. The Issuer and the Agents agree that it would not be
equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Agents were treated as one
entity for such purpose). Notwithstanding the provisions of this
subsection (d), no Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
which are the subject of the action and which were distributed to the
public through it pursuant to this Agreement or upon resale of
Securities purchased by it from the Issuer exceeds the amount of any
damages which such Agent has otherwise been required to pay in respect
of the same claim or any substantially similar claim. The obligations
of each Agent in this subsection (d) to contribute are several, in the
same proportion which the amount of the Securities which are the
subject of the action and which were distributed to the the public
through such Agent pursuant to this Agreement bears to the total
amount of such Securities distributed to the public through all of the
Agents pursuant to this Agreement, and not joint.
(e) The obligations of the Issuer under this Section 7 shall
be in addition to any liability which the Issuer may otherwise have
and shall extend, upon the same terms and
16
<PAGE> 17
conditions, to each person, if any, who controls each Agent within the
meaning of the Act; and the obligations of each Agent under this
Section 7 shall be in addition to any liability which each Agent may
otherwise have and shall extend, upon the same terms and conditions,
to each director of the Issuer, to each officer of the Issuer who has
signed the Registration Statement and to each person, if any, who
controls the Issuer within the meaning of the Act.
8. Status of Each Agent. In soliciting offers to purchase the
Securities from the Issuer pursuant to this Agreement and in assuming its other
obligations hereunder (other than offers to purchase pursuant to Section 11),
each Agent is acting individually and not jointly. Each Agent will make
reasonable best efforts to assist the Issuer in obtaining performance by each
purchaser whose offer to purchase Securities from the Issuer has been solicited
by such Agent and accepted by the Issuer. If the Issuer shall default on its
obligations to deliver Securities to a purchaser whose offer it has accepted,
the Issuer (i) shall hold the Agents harmless against any loss, claim or damage
arising from or as a result of such default by the Issuer, and (ii) in
particular, shall pay to the Agents any commission to which they would be
entitled in connection with such sale.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Issuer or its officers and of the agents set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Agent, the Issuer or any of their respective representatives, officers
or directors or any controlling person and will survive delivery of any payment
for the Securities. If this Agreement is terminated pursuant to Section 10 or
for any other reason, the Issuer shall remain responsible for the expenses to
be paid or reimbursed by it pursuant to Section 4(h) and the obligations of the
Issuer under Sections 4(d) and 4(g) and the respective obligations of the
Issuer and the Agents pursuant to Section 7 shall remain in effect. In
addition, if any such termination shall occur either (i) at a time when any
Agent shall own any of the Securities with the intention of reselling them or
(ii) after the Issuer has accepted an offer to purchase Securities and prior to
the related settlement, the obigations of the Issuer under the second sentence
of Section 4(b), under Section 4(a), 4(c), 4(e) and 4(f) and, in the case of a
termination occurring as described in (ii) above, under Sections 3(c), 6(a),
6(e) and 6(f) and under the last sentence of Section 8, shall also remain in
effect.
10. Termination. This Agreement may be terminated for any
reason at any time by the Issuer as to any Agent or, in the case of an Agent by
such Agent insofar as this Agreement relates to such Agent, upon the giving of
one day's written notice of such termination to the other parties hereto. Any
settlement with
17
<PAGE> 18
respect to Securities placed by an Agent occurring after termination of this
Agreement shall be made in accordance with the Procedures and each Agent
agrees, if requested by the Issuer, to take the steps therein provided to be
taken by such Agent in connection with such settlement.
11. Purchases as Principal. From time to time, any Agent may
agree with the Issuer to purchase Securities from the Issuer as principal and
(unless the Issuer and such Agent may otherwise agree) such purchase shall be
made in accordance with the terms of a separate agreement ("Purchase
Agreement") in the form attached hereto as Exhibit C. A Purchase Agreement may
also specify certain provisions relating to the reoffering of such Notes by
such Agent. Whether or not the Issuer and an Agent execute and deliver an
agreement in connection with any such sale and purchase, such sale and purchase
shall, unless the Issuer and such Agent otherwise expressly agree in writing,
be made pursuant to a Purchase Agreement in the form attached hereto as Exhibit
C with such additional provisions relating to the terms of the Securities and
of the purchase and sale (and, if applicable, resale) thereof as shall be set
forth in the Purchase Information delivered pursuant to the Procedures, and
such Agent's compensation shall, unless otherwise agreed between the Issuer and
such Agent, be the amount thereof set forth in the Pricing Supplement.
12. Sales of Securities Denominated in a Currency other than
U.S. Dollars or of Indexed Securities. If at any time the Issuer with any of
the Agents shall determine to issue and sell Securities denominated in a
currency other than U.S. dollars, which other currency may include a currency
unit, or with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, the Issuer and any such
Agent may execute and deliver a supplement to this Agreement for the purpose of
making any appropriate additions to and modifications of the terms of this
Agreement (and the Procedures) applicable to such Securities and the offer and
sale thereof. The Agents are authorized to solicit offers to purchase
Securities with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, and the Issuer shall agree
to any sales of such Securities (whether offered on an agency or principal
basis), only in a minimum aggregate amount of $2,500,000.
13. Notices. Except as otherwise provided herein, all notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to CS First Boston Corporation shall be directed to
it at Park Avenue Plaza, New York, New York 10055, Attention: Mr. Joseph
Fashano, phone number (212) 909-2107, fax number (212) 318-0532; to Merrill
Lynch & Co. shall be directed to it at Merrill Lynch, Pierce, Fenner & Smith
Incorporated, North Tower, 10th Floor, World Financial Center, New York, New
York 10281-1310, Attention: MTN Product Management, phone
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<PAGE> 19
number (212) 449-7476, fax number (212) 449-2234; to Morgan Stanley & Co.
Incorporated shall be directed to it at 1221 Avenue of the Americas, New York,
New York, 10020, Attention: Managing Director Debt Syndicate, phone number
(212) 296-4289, fax number (212) 764-7490, with a copy to 1251 Avenue of the
Americas, Attention: Manager, Credit Department, phone number (212) 703-4000,
fax number (212) 764-4575; and to J.P. Morgan Securities Inc. shall be directed
to it at 60 Wall Street, New York, New York 10260, Attention: Medium Term Note
Department, phone number (212) 648-0591, fax number (212) 648-5907; and notices
to the Issuer shall be directed to it if by mail, to P.O. Box 10001, Dallas,
Texas 75301-0001, and if sent otherwise, to 6501 Legacy Drive, Plano, Texas
75024-3698, Attention: C.R. Lotter, Secretary; or in the case of any party
hereto, to such other address or person as such party shall specify to each
other party by a notice given in accordance with the provisions of this Section
13. Any such notice shall take effect at the time of receipt.
14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, their respective successors, the
officers and directors and controlling persons referred to in Section 7 and, to
the extent provided in Section 6(f), any person who has agreed to purchase
Securities from the Issuer, and no other person will have any right or
obligation hereunder.
15. Governing Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such executed counterparts shall
together constitute one and the same Agreement.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
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<PAGE> 20
Very truly yours,
J.C. PENNEY COMPANY, INC.
By: /s/ D.A. McKay
Name: D.A. McKay
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED, as of the
date first above written:
CS FIRST BOSTON CORPORATION
By: /s/ Richard W. Kurz
Name: Richard W. Kurz
Title: Director
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By: /s/ Curtis B. McWilliams
Name: Curtis B. McWilliams
Title: Managing Director
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Gerard Pasciucco
Name: Gerard Pasciucco
Title: Principal
J.P. MORGAN SECURITIES INC.
By: /s/ Michael C. Lindsay
Name: Michael C. Lindsay
Title: Vice President
20
<PAGE> 21
EXHIBIT A
The Issuer agrees to pay each Agent a commission equal to the following
percentage of the principal amount of Securities sold to purchasers solicited
by such Agent:
<TABLE>
<CAPTION>
Commission Rate
(as a percentage of
Term principal amount)
---- -------------------
<S> <C>
9 months to less than 12 months .125%
12 months to less than 18 months .150
18 months to less than 24 months .200
24 months to less than 30 months .250
30 months to less than 3 years .300
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 7 years .500
7 years to less than 10 years .550
10 years to less than 20 years .600
20 years to 30 years .750
Greater than 30 years To be negotiated
at time of trade
</TABLE>
<PAGE> 22
EXHIBIT B
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes - Series A due nine months or more from their
issue date ("Notes"), are to be offered on a continuing basis by J. C. Penney
Company, Inc. ("Issuer"). CS First Boston Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and J. P. Morgan
Securities Inc., as agents (individually, an "Agent" and collectively, the
"Agents"), have each agreed to use reasonable best efforts to solicit offers to
purchase the Notes, but the Issuer reserves the right to sell the Notes on its
own behalf directly or through affiliates and, upon notice to each Agent, to
enter into agreements substantially identical to the Agency Agreement with
other agents. The Agents will not be obligated to purchase Notes for their own
account. The Notes are being sold pursuant to an Agency Agreement, dated July
1, 1994 ("Agency Agreement"), among the Issuer and the Agents and will be
issued pursuant to an Indenture, dated as of April 1, 1994 (said Indenture, and
all Indentures supplemental thereto, being hereinafter called the "Indenture"),
between the Issuer and Bank of America National Trust and Savings Association,
as trustee ("Trustee"). In connection with certain procedures to be followed
with respect to the settlement of sales of Notes as set forth in this
Administrative Procedures, the Issuer has appointed Chemical Bank as its
Issuing Agent. With respect to the Notes, Chemical Bank will also act as Paying
Agent and Authenticating Agent under the Indenture and, as may be required,
Calculation Agent and Exchange Rate Agent for the Issuer. All references herein
to Chemical Bank, regardless of the capacity in which it is acting, will be to
the "Paying Agent".
The Notes will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Issuer and will have been registered under
the Securities Act of 1933 ("Act"). For a description of the terms of the Notes
and the offering and sale thereof, see the sections entitled "Description of
Notes", "Special Provisions Relating to Foreign Currency Notes", "United States
Taxation", "Plan of Distribution of Notes" and "Glossary" in the Prospectus
Supplement relating to the Notes, dated July 1, 1994, attached hereto and
hereinafter referred to as the "Prospectus Supplement", and the sections
entitled "Description of Securities" and "Plan of Distribution" in the
Prospectus relating to the Notes, dated April 29, 1994, attached hereto and
hereinafter referred to as the "Prospectus". Defined terms used herein but not
defined herein shall have the meanings assigned to them in the Agency
Agreement, the Prospectus or the Prospectus Supplement.
The Notes will be represented either by Global Notes delivered to The
Depository Trust Company ("DTC") or its nominee and recorded in the book-entry
system maintained by DTC or such nominee ("Book-Entry Notes") (it being
understood that only each Global Note and not any such Book-Entry Note
represented thereby constitutes a Security under the Indenture) or by
certificates delivered to the Holders thereof or Persons designated by such
Holders ("Certified Notes"). Notes for which interest is calculated on the
basis of a
<PAGE> 23
fixed interest rate are referred to herein as "Fixed Rate Notes". Notes for
which interest is calculated at a rate or rates determined by reference to an
interest rate formula are referred to herein as "Floating Rate Notes".
Notes which are issued at a price lower than the principal amount
thereof and which provide that upon redemption or acceleration of the maturity
thereof an amount less than the principal thereof shall become due and payable
are referred to herein as "Original Issue Discount Notes". For special
provisions relating to Original Issue Discount Notes and other Notes issued at
a discount for tax purposes, see the section entitled "United States Taxation
- - -- Original Issue Discount" in the Prospectus Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, the
Notes will be denominated in U.S. dollars and payments of principal of and any
premium and interest on the Notes will be made in U.S. dollars in the manner
indicated in the Prospectus and the Prospectus Supplement. Notes denominated in
one or more currencies or currency units other than U.S. dollars are referred
to herein as "Foreign Currency Notes". For special provisions relating to
Foreign Currency Notes, see the sections entitled "Special Provisions Relating
to Foreign Currency Notes" in the Prospectus Supplement. Specific information
concerning the foreign currency or currency unit in which a particular Foreign
Currency Note is denominated, including historical exchange rates and a
description of the currency and any exchange controls, shall be contained in a
Pricing Supplement to the Prospectus Supplement reflecting the terms of such
Note.
Notes which provide that amounts payable by the Issuer in respect of
principal of or any premium or interest on the Notes shall be determined by
reference to the value, rate or price of one or more specified indices, are
referred to herein as "Indexed Notes". Specific information pertaining to the
method for determining the principal amounts payable, a historical comparison
of the value, rate or price of the specified index, indices and the face amount
of the Indexed Note and certain additional tax considerations will be described
in the applicable Pricing Supplement.
Administrative procedures and specific terms of the offering are
explained below. Part I indicates procedures applicable to all Notes; Part II
indicates specific procedures for Certificated Notes; and Part III indicates
specific procedures for Book-Entry Notes. Administrative and record-keeping
responsibilities will be handled by the Issuer. The Issuer will advise the
Agents in writing of those persons handling administrative responsibilities
with whom the Agents are to communicate regarding offers to purchase Notes and
the details of their delivery.
2
<PAGE> 24
Except as otherwise specified, all time references herein shall be to
New York City time on the date of the event, act or notice referred to in the
particular provision.
PART I: PROCEDURES APPLICABLE TO ALL NOTES
Issue Date
Each Note will be dated the date of its authentication. Each Note will
also bear an original issue date ("Issue Date") which, with respect to any such
Note (or portion thereof), shall mean the date of its original issuance and
shall be specified therein. The Issue Date will remain the same for all Notes
subsequently issued upon transfer, exchange or substitution of a Note,
regardless of their dates of authentication.
Price to Public
Except as otherwise specified in a Pricing Supplement, each Note will
be issued at 100% of principal amount.
Maturities; Minimum Purchase
Each Note will mature on a date, selected by the purchaser and agreed
to by the Issuer, which will be at least nine months or more after its Issue
Date. The minimum aggregate amount of Notes which may be offered to any
purchaser will be $100,000 with integral multiples of $1,000 in excess thereof.
Interest Payments
Interest on each interest-bearing Note will be calculated and paid in
the manner described in such Note, in the Prospectus Supplement and in the
applicable Pricing Supplement. Unless otherwise set forth therein, interest on
Fixed Rate Notes (including interest for partial periods) will be calculated on
the basis of a 360-day year of twelve 30-day months and will not accrue on the
31st day of any month. Interest on Floating Rate Notes, except as otherwise set
forth therein, will be calculated on the basis of actual days elapsed and a
year of 360 days, except that in the case of a Floating Rate Note for which the
Base Rate is the Treasury Rate, interest will be calculated on the basis of the
actual number of days in the year.
On the fifth Business Day immediately preceding each Interest Payment
Date, the Paying Agent will furnish the Issuer with the total amount of interest
payments (whether in U.S. dollars or other currencies or currency units) to be
made on such Interest Payment Date. The Paying Agent will provide monthly, to
the Issuer, a list
3
<PAGE> 25
of the principal and any premium and interest to be paid on Notes maturing in
the next succeeding month. Except with respect to Book-Entry Notes, the Paying
Agent will assume responsibility for withholding taxes on interest paid as
required by law.
Redemption/Repayment
If indicated in the applicable Pricing Supplement, the Notes of a
particular tenor will be subject to redemption in whole or in part (subject to
applicable minimum denominations), at the option of the Issuer on and after an
initial redemption date as set forth in the applicable Pricing Supplement and
in the applicable Note. The redemption price will be set forth in the
applicable Pricing Supplement and in the applicable Note.
If indicated in the applicable Pricing Supplement, the Notes of a
particular tenor will be subject to repayment at the option of the Holders
thereof in accordance with the terms of the Notes on a repayment date as set
forth in the applicable Pricing Supplement and in the applicable Note. The
repayment date or dates and repayment price will be set forth in the applicable
Pricing Supplement and in the applicable Note.
Procedures for Establishing the Terms of the Notes
The Issuer and the Agents will discuss from time to time the rates to
be borne by the Notes that may be sold as a result of the solicitation of
offers by the Agents. Once any Agent has recorded any reasonable indication of
interest in Notes upon certain terms, and communicated with the Issuer, if the
Issuer plans to accept an offer to purchase Notes upon such terms, it will
prepare a Pricing Supplement to the Prospectus, as then amended or
supplemented, reflecting the terms of such Notes and will arrange to have
copies of the Pricing Supplement filed with, or transmitted by a means
reasonably calculated to result in filing with, the Securities and Exchange
Commission ("Commission") pursuant to Rule 424 under the Act. The Issuer will
supply at least 10 copies of the Prospectus, as then amended or supplemented,
and bearing such Pricing Supplement, to the Agent who presented the offer
("Presenting Agent"). No settlements with respect to Notes upon such terms may
occur prior to such transmitting or filing and the Agents will not, prior to
such transmitting or filing, mail confirmations to customers who have offered
to purchase Notes upon such terms. After such transmitting or filing, sales,
mailing of confirmations and settlements may occur with respect to Notes upon
such terms, subject to the provisions of "Delivery of Prospectus" below.
If the Issuer decides to post rates and a decision has been reached to
change interest rates, the Issuer will promptly notify each Agent. Each Agent
will immediately suspend solicitation of purchases. At that time, the Agents
will recommend and the Issuer
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may establish rates to be so "posted". Following establishment of posted rates
and prior to the transmitting or filing described in the preceding paragraph,
the Agents may only record indications of interest in purchasing Notes at the
posted rates. Once any Agent has recorded any indication of interest in Notes
at the posted rates and communicated with the Issuer, if the Issuer plans to
accept an offer at the posted rate, it will prepare a Pricing Supplement
reflecting such posted rates and will arrange to have copies of the Pricing
Supplement, filed with, or transmitted by means reasonably calculated to result
in filing with, the Commission pursuant to Rule 424 and will supply at least 10
copies of the Prospectus, as then amended or supplemented, and bearing such
Pricing Supplement, to the Presenting Agent. No settlements at the posted rates
may occur prior to such transmitting or filing and the Agents will not, prior
to such transmitting or filing, mail confirmations to customers who have
offered to purchase Notes at the posted rates. After such transmitting or
filing, sales, mailing of confirmations and settlements may resume, subject to
the provisions of "Delivery of Prospectus" below.
Outdated Pricing Supplements, and copies of the Prospectus to which
they are attached (other than those retained for files), will be destroyed.
Suspension of Solicitation: Amendment or Supplement
As provided in the Agency Agreement, the Issuer may instruct the
Agents to suspend solicitation of offers to purchase at any time, and upon
receipt of such instruction from the Issuer, the Agents will each immediately
suspend solicitation until such time as the Issuer has advised them that
solicitation of offers to purchase may be resumed.
If the Agents receive the notice from the Issuer contemplated by
Section 3(b) or 4(b) of the Agency Agreement, they will immediately suspend
solicitation and will only resume solicitation as provided in the Agency
Agreement. If the Issuer is required, pursuant to Section 4(b) of the Agency
Agreement, to prepare an amendment or supplement, it will promptly furnish each
Agent with the proposed amendment or supplement; if the Issuer decides to amend
or supplement the Registration Statement or the Prospectus relating to the
Notes, it will promptly advise each Agent and will furnish each Agent with the
proposed amendment or supplement in accordance with the terms of the Agency
Agreement. The Issuer will file such amendment or supplement with the
Commission, provide the Agents with copies of any such amendment or supplement,
confirm to the Agents that such amendment or supplement has been filed with the
Commission and advise the Agents that solicitation may be resumed.
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Any such suspension shall not affect the Issuer's obligations under
the Agency Agreement; and in the event that at the time the Issuer suspends
solicitation of offers to purchase there shall be any offers already accepted
by the Issuer outstanding for settlement, the Issuer will have the sole
responsibility for fulfilling such obligations. The Issuer will in addition
promptly advise the Presenting Agent and the Paying Agent if such offers are
not to be settled and if copies of the Prospectus as in effect at the time of
the suspension may not be delivered in connection with the settlement of such
offers.
Acceptance of Offers
Each Agent will promptly advise the Issuer, orally or in writing, of
each reasonable offer to purchase Notes received by it. Each Agent may, in its
discretion reasonably exercised, without notice to the Issuer, reject any offer
received by it, in whole or in part. The Issuer will have the sole right to
accept offers to purchase Notes and may in its discretion reject any such
offer, in whole or in part. If the Issuer accepts or rejects an offer, in whole
or in part, the Issuer will promptly so notify the Presenting Agent.
Confirmation
For each accepted offer, the Presenting Agent will issue a
confirmation to the purchaser, with a separate confirmation to the Issuer,
setting forth the Purchase Information (as defined under II below with respect
to Certificated Notes and III below with respect to Book-Entry Notes) and
delivery and payment instructions; provided, however, that, in the case of the
confirmation issued to the purchaser, no confirmation shall be delivered to the
purchaser prior to the delivery of the Prospectus referred to below.
Determination of Settlement Date
The receipt of immediately available funds by the Issuer in payment
for a Note and (i) in the case of Certificated Notes, the authentication and
issuance of such Note and (ii) in the case of Book-Entry Notes, entry by the
Presenting Agent of a DTC Same- Day Funds Settlement System ("SDFS") deliver
order through DTC's Participant Terminal System to credit such Note to the
account of a Participant purchasing, or acting for the purchase of, such Note,
shall, with respect to such Note, constitute "settlement". All offers accepted
by the Issuer will be settled on the fifth Business Day next succeeding the
date of acceptance unless otherwise agreed by the purchaser and the Issuer. The
settlement date shall be specified upon receipt of an offer to purchase. No
later than 11:00 a.m., on the settlement date, the Issuer will instruct the
Paying Agent to authenticate and deliver the Notes no later than 2:15 p.m. on
the settlement date.
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Delivery of Prospectus
A copy of the Prospectus as most recently amended or supplemented on
the date of delivery thereof (except as provided below) must be delivered by
the Presenting Agent to a purchaser prior to or together with the earlier of
the delivery of (i) the written confirmation provided for above, and (ii) any
Note purchased by such purchaser. (For this purpose, entry of an SDFS deliver
order through DTC's Participant Terminal System to credit a Note to the account
of a Participant purchasing, or acting for the purchaser of, a Note shall be
deemed to constitute delivery of such Note.) Subject to the foregoing, it is
anticipated that delivery of the Prospectus, confirmation and Notes to the
purchaser will be made simultaneously at settlement. The Issuer shall ensure
that the Presenting Agent receives copies of the Prospectus and each amendment
or supplement thereto (including appropriate Pricing Supplements) in such
quantities and within such time limits as will enable the Presenting Agent to
deliver such confirmation or Note to a purchaser as contemplated by these
procedures and in compliance with the first sentence of this paragraph. If,
since the date of acceptance of a purchaser's offer, the Prospectus shall have
been supplemented solely to reflect any sale of Notes on terms different from
those agreed to between the Issuer and such purchaser or a change in posted
rates not applicable to such purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of delivery of the Prospectus.
Authenticity of Signatures
The Issuer will caused the Paying Agent to furnish the Agents from
time to time with the specimen signatures of each of the Paying Agent's
officers, employees or agents who have been authorized by the Paying Agent to
authenticate Notes, but no Agent will have any obligation or liability to the
Issuer or the Paying Agent in respect of the authenticity of the signature of
any officer, employee or agent of the Issuer or the Paying Agent on any
Certificated Note or Global Note (as defined in Part III), unless the Agent
knows or has reason to believe that such signature may not be authentic.
Business Day
"Business Day" means any day which is not a Saturday or Sunday and is
not a day on which banking institutions are generally authorized or obligated
by law or executive order to close in the City of New York and, with respect to
LIBOR notes, a London Banking Day. "London Market Day" means any day on which
dealings in deposits in U.S. Dollars are transacted in the London interbank
market.
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Paying Agent Not to Risk Funds
Nothing herein shall be deemed to require the Paying Agent to risk or
expend its own funds in connection with any payment made to the Issuer, the
Agents, DTC or any Noteholder, it being understood by all parties that payments
made by the Paying Agent to the Issuer, the Agents, DTC or any Holder of a Note
shall be made only to the extent that funds are provided to the Paying Agent
for such purpose.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Form and Denominations
The Certificated Notes shall be issued only in fully registered form
in denominations of $100,000 with integral multiples of $1,000 in excess
thereof, or, in the case of Foreign Currency Notes, in such minimum
denomination, not less than the equivalent of $100,000 with integral multiples
of $1,000 in excess thereof, and such greater denomination or denominations in
excess thereof, as shall be set forth in the applicable Pricing Supplement.
However, Notes with respect to which an index is used to determine the amounts
of payments of principal and any premium and interest shall be issued only in a
minimum aggregate amount of $2,500,000.
Transfers and Exchanges
A Certificated Note may be presented for transfer or exchange at the
office of Chemical Bank, Room 234 North Building, Corporate Trust Security
Window, 55 Water Street, New York, New York 10041, or by mail to Chemical Bank
Debt Operations Department, JAF Building, P.O. Box 2862, GPO Station, New York
10016-2862 or such other place or transfer agent as the Issuer may designate
("Transfer Agent"). Certificated Notes will be exchangeable for other
Certificated Notes of any authorized denominations and of like tenor and in a
like aggregate principal amount, upon surrender of the Certificated Notes to be
exchanged at the corporate trust office of the Transfer Agent. Certificated
Notes will not be exchangeable for Book-Entry Notes.
Payment at Maturity
Upon presentation of each Certificated Note at Maturity, the Paying
Agent will pay the principal amount thereof, together with any premium and
accrued interest due at Maturity. Such payment will be made in immediately
available funds, provided that the Certificated Note is presented in time for
the Paying Agent to make payment in such funds in accordance with its normal
procedures. The
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Issuer will provide the Paying Agent with funds available for immediate use for
such purpose. Certificated Notes presented at Maturity will be canceled by the
Paying Agent as provided in the Indenture. For special provisions relating to
Foreign Currency Notes, see the section entitled "Special Provisions Relating
to Foreign Currency Notes" in the Prospectus Supplement.
Details for Settlement
For each offer for Certificated Notes accepted by the Issuer, the
Presenting Agent shall communicate to the Issuer no later than 11:00 a.m. on
the first Business Day after the sale date (or on the sale date if such sale is
to be settled within one Business Day) by telephone, telex, facsimile
transmission or other acceptable means, the following information ("Purchase
Information"):
1. Exact name in which the Note or Notes are to be registered
("Registered Owner").
2. Exact address of Registered Owner and, if different, the
address for delivery, notices and payment of principal and any
premium and interest.
3. Taxpayer identification number of Registered Owner.
4. Principal amount of each Note in authorized denominations to
be delivered to registered owner.
5. In the case of Fixed Rate Notes, the interest rate of each
Note; in the case of Floating Rate Notes, the interest rate
formula, the Spread or Spread Multiplier (if any), the maximum
or minimum interest rate limitation (if any), the Calculation
Agent, the Calculation Dates, the Initial Interest Rate, the
Interest Payment Dates, the Regular Record Dates, the Index
Maturity, the Interest Determination Dates and the Interest
Reset Dates, in each case, to the extent applicable with
respect to each Note.
6. Stated Maturity of each Note.
7. Redemption and/or repayment provisions, if any, of each Note.
8. Trade date of each Note.
9. Settlement date (Issue Date) of each Note.
10. Presenting Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the Issuer upon
settlement).
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11. Price.
12. Net Proceeds to Issuer.
13. Currency or currency unit in which each Note is to be
denominated and exchange rate applicable to purchase Foreign
Currency Notes to be paid for in U.S. dollars.
14. Any additional applicable terms of each Note.
The Issue Date of, and the settlement date for, Certificated Notes
will be the same. Before accepting any offer to purchase Certificated Notes to
be settled in less than three Business Days, the Issuer shall verify that the
Paying Agent will have adequate time to prepare and authenticate the Notes.
If the initial interest rate for a Floating Rate Certificated Note has
not been determined at the time that the foregoing procedure is completed, the
procedures described in the following two paragraphs shall be completed as soon
as such rate has been determined but no later than 12:00 noon, on the Business
Day before the settlement date.
Immediately after receiving the details for each offer for
Certificated Notes from the Presenting Agent and in any event no later than
12:00 noon on the first Business Day after the sale date (or on the sale date
if such sale is to be settled within one Business Day), the Issuer will, if
accepting the offer, after recording the details and any necessary
calculations, communicate the Purchase Information by telephone, telex,
facsimile transmission or other acceptable means, to the Paying Agent. Each
such instruction given by the Issuer to the Paying Agent shall constitute a
continuing representation and warranty by the Issuer to the Paying Agent and
the Agents that (i) the issuance and delivery of such Notes have been duly and
validly authorized by the Issuer and (ii) such Notes, when completed,
authenticated and delivered, shall constitute the valid and legally binding
obligation of the Issuer. The Paying Agent will assign to and enter on each
Note a transaction number.
At such time as the Issuer may determine, but in any event
sufficiently in advance of an issuance to allow the Paying Agent time to
process the Notes, the Issuer will deliver to the Paying Agent a pre-printed
four-ply packet (or such other packet as may be agreed upon between the
parties) for such Certificated Notes, which packet will contain the following
documents in forms that have been approved by the Issuer, the Agents and the
Paying Agent:
1. Certificated Note with customer confirmation.
2. Stub One - For the Paying Agent.
3. Stub Two - For the Presenting Agent.
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4. Stub Three - For the Issuer.
The Paying Agent will complete such Certificated Note and will
authenticate such Certificated Note and deliver it (with the confirmation) and
the Stubs One and Two to such Presenting Agent, and such Agent will acknowledge
receipt of the Note by stamping or otherwise marking Stub One and returning it
to the Paying Agent. The Paying Agent will send Stub Three to the Issuer by
first-class mail or such other means as may be agreed upon by these parties.
Settlement; Note Deliveries and Cash Payment
At such time as the Issuer may determine, but in any event
sufficiently in advance of an issuance to allow the Paying Agent time to
process the Notes, the Issuer will deliver to the Paying Agent a supply of duly
executed Certificated Notes with pre-printed control numbers adequate to
implement the program. Upon the receipt of appropriate documentation and
instructions from the Issuer in accordance with the applicable Officers'
Certificate and verification thereof, the Paying Agent will cause the
Certificated Notes to be completed and authenticated and hold the Certificated
Notes for delivery against payment.
The Paying Agent will deliver the Certificated Notes, in accordance
with instructions from the Issuer, to the Presenting Agent for the benefit of
the purchaser only against receipt. The Presenting Agent will acknowledge
receipt of the Notes through a broker's receipt. Delivery of the Certificated
Notes by the Paying Agent will be made only against such acknowledgement of
receipt from the Presenting Agent. Upon the Presenting Agent's determination
that such Notes have been authenticated, delivered and completed as aforesaid,
the Presenting Agent will make, or cause to be made, payment to the Issuer at
such account of the Issuer as the Issuer may specify in writing, in immediately
available funds, of an amount equal to the principal amount of such Notes, less
the applicable commission. If the Presenting Agent in any instance advances its
own funds, the Issuer shall not use any of the proceeds of such sale to acquire
securities.
The Presenting Agent will deliver the Notes (with the written
confirmation provided for above) to the purchaser thereof against payment
therefor by such purchaser in immediately available funds. Delivery of any
confirmation or Note will be made in compliance with "Delivery of Prospectus"
in Part I above.
Fails
In the event that a purchaser shall fail to accept delivery of and
make payment for a Certificated Note on the settlement date, the Presenting
Agent will notify the Paying Agent and the Issuer, by telephone, confirmed in
writing. If such Certificated Note has
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been delivered to the Presenting Agent, the Presenting Agent shall return such
Note to the Paying Agent. If funds have been advanced for the purchase of such
Note, the Paying Agent will, immediately upon receipt of such Note, debit the
account of the Issuer for the amount so advanced and the Paying Agent shall
refund to the Presenting Agent the payment previously made by the Presenting
Agent in immediately available funds. Such payments will be made on the
settlement date, if possible, and in any event not later than the Business Day
following the settlement date. If the fail shall have occurred for any reason
other than the Presenting Agent's gross negligence or willful misconduct,
including but not limited to the failure of the Presenting Agent to provide the
Purchase Information to the Issuer or to provide a confirmation to the
purchaser, the Issuer will reimburse the Presenting Agent on an equitable basis
for its loss of the use of funds during the period when the funds were credited
to the account of the Issuer, or for any other cost or expense; and in no event
shall the Issuer be obligated to pay any commission, as contemplated by the
Agency Agreement, with respect to any fail.
Immediately upon receipt of the Certificated Note in respect of which
the fail occurred, the Paying Agent will make appropriate entries in its
records to reflect the fact that the Note was never issued and the Note will be
canceled and disposed of as provided in the Indenture.
PART III: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Paying Agent will
perform the custodial, document control and administrative functions described
below, in accordance with its obligations under a Letter of Representations
("Letter") from the Issuer and the Paying Agent to DTC dated as of July 1,
1994, and a Medium-Term Note Certificate Agreement between the Paying Agent and
DTC dated as of December 2, 1988, and its obligations as a participant in DTC,
including "SDFS".
Form, Denominations and Registration
All Book-Entry Notes of the same tenor and having the same Issue Date,
will be represented initially by a single note (a "Global Note") in fully
registered form without coupons. Book-Entry Notes will represent Notes
denominated in U.S. dollars. Global Notes will be issued in denominations of
$100,000 with integral multiples of $1,000 in excess thereof. However, Notes
with respect to which an index is used to determine the amounts of payments of
principal and any premium and interest shall be issued only in a minimum
aggregate amount of $2,500,000. Each Global Note will be
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registered in the name of Cede & Co., as nominee for DTC, on the Security
Register maintained under the Indenture. The beneficial owner of a Book-Entry
Note (or one or more indirect participants in DTC designated by such owner)
will designate one or more participants in DTC (with respect to such Note, the
"Participants") to act as agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such Participants, a credit balance
with respect to such Book-Entry Note in the account of such Participants. The
ownership interest of such beneficial owner in such Book-Entry Note will be
recorded through the records of such Participants or through the separate
records of such Participants and one or more indirect participants in DTC.
CUSIP Numbers
The Issuer has arranged with the CUSIP Service Bureau of Standard &
Poor's Corporation ("CUSIP Service Bureau") for the reservation of a series of
CUSIP numbers (including tranche numbers), such series consisting of
approximately 900 CUSIP numbers and relating to Global Notes representing
Book-Entry Notes. The Issuer has obtained from the CUSIP Service Bureau a
written list of such reserved CUSIP numbers and has delivered it to DTC and the
Paying Agent. The Paying Agent will assign CUSIP numbers serially to Global
Notes as described below under "Details for Settlement". DTC will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that the Paying Agent
has assigned to Global Notes. The Paying Agent will notify the Issuer at the
time when fewer than 100 of the reserved CUSIP numbers remain unassigned to the
Global Notes; and the Issuer will reserve an additional 900 CUSIP numbers for
assignment to Global Notes representing Book-Entry Notes. Upon obtaining such
additional CUSIP numbers, the Issuer shall deliver a list of such additional
CUSIP numbers to DTC.
Transfers and Exchanges for the Purpose of Consolidation
Transfers of a Book-Entry Note will be accomplished by book entries
made by DTC and, in turn, by Participants (and, in certain cases, one or more
indirect participants in DTC) acting on behalf of beneficial transferors and
transferees of such Book- Entry Note.
The Paying Agent may upon notice to the Issuer deliver to DTC and the
CUSIP Service Bureau at any time a written notice (a copy of which shall be
attached to the Global Note resulting from such exchange) specifying (i) the
CUSIP numbers of two or more outstanding Global Notes that represent Book-Entry
Notes of the same tenor and having the same Issue Date, and for which interest
(if any) has been paid to the same date, (ii) a date occurring at least thirty
days after such written notice is delivered and at least thirty days before the
next Interest Payment Date (if any) for such Notes, on which such Global Notes
shall be exchanged for
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a single replacement Global Note and (iii) a new CUSIP number to be assigned to
such replacement Global Note. Upon receipt of such a notice, DTC will send to
its Participants (including the Paying Agent) a written notice to the effect
that such exchange will occur on such date. Prior to the specified exchange
date, the Paying Agent will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Global Notes to be
exchanged will no longer be valid. On the specified exchange date, the Paying
Agent will exchange such Global Notes for a single Global Note bearing the new
CUSIP number and the CUSIP numbers of the exchanged Global Notes will, in
accordance with CUSIP Service Bureau procedures, be canceled and not
immediately reassigned.
Notice of Interest Payment Dates and Regular Record Dates
To the extent then known, on the first Business Day of March, June,
September and December of each year, the Paying Agent will deliver to the
Issuer and DTC a written list of Record Dates and Interest Payment Dates that
will occur with respect to Floating Rate Book-Entry Notes during the six-month
period beginning on such first Business Day.
Payments of Principal and Interest
(a) Payments of Interest Only. Promptly after each Regular Record Date
(as defined in the Note), the Paying Agent will deliver to the Issuer 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 Maturity) and the total of such amounts. The
Issuer will confirm with the Paying Agent the amount payable on each Global
Note on such Interest Payment Date. DTC will confirm the amount payable on each
Global Note on such Interest Payment Date by reference to the daily or weekly
bond reports published by Standard & Poor's Corporation. The Issuer will pay to
the Paying Agent the total amount of interest due on such Interest Payment Date
(other than at Maturity), and the Paying Agent will pay such amount to DTC at
the times and in the manner set forth below under "Manner of Payment".
(b) Payments at Stated Maturity. On or about the first Business Day of
each month, the Paying Agent will deliver to the Issuer and DTC a written list
of principal and interest to be paid on each Global Note maturing in the
following month. The Issuer, the Paying Agent and DTC will confirm the amounts
of such principal and interest payments with respect to each such Global Note
on or about the fifth Business Day preceding the Stated Maturity of such Global
Note. The Issuer will pay to the Paying Agent, as the paying agent, the
principal amount of such Global Note, together with
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interest due at such Stated Maturity. Upon surrender of a Global Note, the
Paying Agent will pay such amounts to DTC at the times and in the manner set
forth below under "Manner of Payment". If any Stated Maturity of a Global Note
representing Book-Entry Notes is not a Business Day, the payment due on such
day shall be made on the next succeeding Business Day and no interest shall
accrue on such payment for the period from and after such Stated Maturity.
Promptly after payment to DTC of the principal and any interest due at the
Stated Maturity of such Global Note, the Paying Agent will cancel such Global
Note and return such Global Note to the Issuer in accordance with the terms of
the Indenture.
(c) Payment upon Redemption. The Paying Agent will comply with the
terms of the Letter with regard to redemptions or repayments of the Book-Entry
Notes. In the case of Book-Entry Notes stated by their terms to be redeemable
prior to Stated Maturity, at least 60 calendar days before the date fixed for
redemption ("Redemption Date"), the Issuer shall notify the Paying Agent of the
Issuer's election to redeem such Book-Entry Notes in whole or in part and the
principal amount of such Book-Entry Notes to be so redeemed. At least 30
calendar days but not more than 60 calendar days prior to the Redemption Date,
the Paying Agent shall notify DTC of the Issuer's election to redeem such
Book-Entry Notes. The Paying Agent shall notify the Issuer and DTC of the CUSIP
numbers of the particular Global Notes representing such Book-Entry Notes to be
redeemed either in whole or in part. The Issuer, the Paying Agent and DTC will
confirm the amounts of such principal and any premium and interest payable with
respect to each such Book-Entry Notes on or about the fifth Business Day
preceding the Redemption Date of such Book-Entry Notes. The Issuer will pay the
Paying Agent, in accordance with the terms of the Indenture, the amount
necessary to redeem each such Book-Entry Note or the applicable portion of each
such Book-Entry Note. The Paying Agent will pay such amount to DTC at the times
and in the manner set forth herein. Promptly after payment to DTC of the
amount due on the Redemption Date for such Book-Entry Note, the Paying Agent
shall cancel any such Book-Entry Note redeemed in whole and shall deliver it to
the Issuer with an appropriate debit advice. If a Global Note is to be redeemed
in part, the Paying Agent will cancel such Global Note and issue a Global Note
which shall represent the remaining portion of such Global Note and shall bear
the CUSIP number of the canceled Global Note.
(d) Manner of Payment. The total amount of any principal and interest
due on Global Notes on any Interest Payment Date or at Maturity shall be paid
by the Issuer to the Paying Agent in immediately available funds on such date.
The Issuer will make such payment on such Notes by wire transfer to the Paying
Agent. The Issuer will confirm instructions regarding payment in writing to the
Paying Agent. Prior to 10:00 a.m. on each date of maturity of a Book-Entry Note
or as soon as possible thereafter, the Paying Agent will pay by separate wire
transfer (using Fedwire message entry instructions in a form previously
specified by DTC) to an
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account at the Federal Reserve Bank of New York previously specified by DTC in
funds avaiable for immediate use by DTC, each payment of principal (together
with interest thereon) due at maturity on Book-Entry Notes. On each Interest
Payment Date, interest payment shall be made to DTC in same day funds in
accordance with existing arrangements between the Paying Agent and DTC.
Thereafter, on each 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 Book-Entry
Notes represented by such Global Notes are recorded in the book-entry system
maintained by DTC. NEITHER THE ISSUER NOR THE PAYING AGENT SHALL HAVE ANY
DIRECT RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH PARTICIPANTS
OF THE PRINCIPAL OF AND ANY PREMIUM OR INTEREST ON THE BOOK-ENTRY NOTES.
(e) Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on a Book-Entry Note
will be determined and withheld by the Participant, indirect participant in DTC
or other person responsible for forwarding payments and materials directly to
the beneficial owner of such Note.
Details for Settlement
For each offer for Book-Entry Notes accepted by the Issuer, and which
are to be represented by one Global Note, the Presenting Agent shall
communicate to the Issuer no later than 11:00 a.m. on the first Business Day
after the sale date (or on the sale date if such sale is to be settled within
one Business Day), by telephone, telex, facsimile transmission or other
acceptable means, the following information ("Purchase Information"):
1. Statement that these Book-Entry Notes will be represented by a
Global Note registered in the name of Cede & Co.
2. Exact address of Participant with respect to each Book-Entry
Note and, if different, the address for delivery, notices and
payment of principal and any premium and interest.
3. Principal amount of each Book-Entry Note.
4. Principal amount of Global Note representing all Book-Entry
Notes.
5. Stated Maturity of the Notes.
6. In the case of Fixed Rate Notes, the interest rate of the
Notes; in the case of Floating Rate Notes, the interest rate
formula, the Spread or Spread Multiplier (if any),
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the maximum or minimum interest rate limitation (if any), the
Calculation Agent, the Calculation Dates, the Initial Interest
Rate, the Interest Payment Dates, the Regular Record Dates,
the Index Maturity, the Interest Determination Dates and the
Interest Reset Dates, in each case, to the extent applicable
with respect to the Notes.
7. Redemption and/or repayment provisions, if any, of the Notes.
8. Trade date of the Notes.
9. Settlement date (Issue Date) of the Notes.
10. Presenting Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the Issuer upon
settlement).
11. Price.
12. Net Proceeds to Company.
13. Currency or currency unit in which the Notes are to be
denominated and exchange rate applicable to purchase Foreign
Currency Notes payable in U.S. dollars.
14. Any additional applicable terms of the Notes.
The Issue Date of, and the settlement date for, Book-Entry Notes will
be the same. Before accepting any offer to purchase Book-Entry Notes to be
settled in less than three Business Days, the Issuer shall verify that the
Paying Agent will have adequate time to prepare and authenticate the Global
Note(s) which shall represent such Book-Entry Notes.
If the initial interest rate for a Floating Rate Book-Entry Note has
not been determined at the time that the foregoing procedure is completed, the
procedures described in the following two paragraphs shall be completed as soon
as such rate has been determined but no later than 12:00 noon (with respect to
the next following paragraph) and 2:00 p.m. (with respect to the second
following paragraph), as the case may be, on the Business Day before the
settlement date.
Immediately after receiving the details for each offer for Book-Entry
Notes from the Presenting Agent and in any event no later than 12:00 noon on
the first Business Day after the sale date (or on the sale date if such sale is
to be settled within one Business Day), the Issuer will, if accepting the
offer, after recording the details and any necessary calculations, communicate
the Purchase Information by telephone, telex, facsimile transmission or other
acceptable means, to the Paying Agent. Each such instruction given by the
Issuer to the Paying Agent shall
17
<PAGE> 39
constitute a continuing representation and warranty by the Issuer to the Paying
Agent and the Agents that (i) the issuance and delivery of such Global Note
representing such Book-Entry Notes has been duly and validly authorized by the
Issuer and (ii) such Global Note, when completed, authenticated and delivered,
shall constitute the valid and legally binding obligation of the Issuer.
Immediately after receiving the Purchase Information from the Issuer
and in any event no later than 2:00 p.m. on the first Business Day after the
sale date (or on the sale date if such sale is to be settled within one
Business Day), the Paying Agent will assign a CUSIP number to the Global Note
representing such Book-Entry Notes and will telephone the Issuer and advise the
Issuer of such CUSIP number and, as soon thereafter as practicable, the Issuer
shall notify the Agent of such CUSIP number. The Paying Agent will enter a
pending deposit message through DTC's Participant Terminal System, providing
the following settlement information to DTC (which shall route such information
to Standard & Poor's Corporation) and the Presenting Agent:
1. The applicable Purchase information.
2. Initial Interest Payment Date for the Book-Entry Notes
represented by such Global Note, number of days by which such
date succeeds the Regular Record Date which shall be the
Regular Record Date (as defined in the Note), and, if known,
the amount of interest payable on such Interest Payment Date
per $1,000 principal amount of Book-Entry Notes.
3. Identification as either a Fixed Rate Note or a Floating Rate
Note.
4. CUSIP number of the Global Note representing such Book-Entry
Note(s).
5. Whether such Global Note will represent any other Book-Entry
Note(s) (to the extent known at such time).
6. Interest payment periods.
7. Numbers of the participant accounts maintained by DTC on
behalf of the Paying Agent and the Agents.
Standard & Poor's Corporation will use the information received in the
pending deposit message to include the amount of any interest payable and
certain other information regarding the related Global Note in the appropriate
daily or weekly bond report published by Standard & Poor's Corporation.
18
<PAGE> 40
Settlement; Global Note Delivery and Cash Payment
The Issuer will deliver to the Paying Agent at the commencement of the
program and from time to time thereafter a supply of duly executed Global Notes
with pre-printed control numbers adequate to implement the program. Upon the
receipt of appropriate documentation and instructions from the Issuer in
accordance with the applicable Officers' Certificate and verification thereof,
the Paying Agent will cause a Global Note to be completed and authenticated no
later than 9:00 a.m. on the Settlement Date, and hold such Global Note for
delivery against payment.
Prior to 10:00 a.m. on the Settlement Date, DTC will credit such Note
to the Paying Agent's participant account at DTC. At or prior to 2:00 p.m. on
the Settlement Date, the Paying Agent will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to (i) debit such Global Note
to the Paying Agent's participant account and credit such Global Note to the
Presenting Agent's participant account and (ii) debit the Presenting Agent's
settlement account and credit the Paying Agent's settlement account for an
amount equal to the price of such Global Note less such Agent's commission (in
accordance with SDFS operating procedures in effect on the Settlement Date).
The entry of such a deliver order shall constitute a representation and
warranty by the Paying Agent to DTC that (i) the Global Note representing such
Book-Entry Note(s) has been executed, delivered and authenticated and (ii) the
Paying Agent is holding such Global Note pursuant to the Medium-Term Note
Certificate Agreement between the Paying Agent and DTC.
Simultaneously with the giving of such instructions by the Paying
Agent, the Presenting Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such Global Note to
the Presenting Agent's participant account and credit the underlying Book-Entry
Notes to the Participant accounts of the Participants with respect to such
Global Note and (ii) to debit the settlement accounts of such Participants with
respect to the underlying Book-Entry Notes and credit the settlement account of
such Presenting Agent for an amount equal to the price of such Global Note (in
accordance with SDFS operating procedures in effect on the Settlement Date).
Transfers of funds will take place on or prior to 4:45 p.m. on the
Settlement Date, 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.
The Paying Agent, upon confirming receipt of such funds, will wire
transfer the amount transferred to the Paying Agent, in funds available for
immediate use, for the designated account of J.C.
19
<PAGE> 41
Penney Company, Inc., at Chemical Bank, New York, New York (ABA No. 0210
00128).
Fails
If settlement of a Book-Entry Note is rescheduled or canceled, the
Issuer shall notify the Paying Agent, and upon receipt of such notice, the
Paying Agent will deliver to DTC, through DTC's Participant Terminal System, a
cancelation message to such effect by no later than 2:00 p.m., on the Business
Day immediately preceding the scheduled Settlement Date.
If the Paying Agent has not entered an SDFS deliver order with respect
to a Book-Entry Note, then upon written request (which may be evidenced by
telecopy transmission) of the Issuer, the Paying Agent shall deliver to DTC,
through DTC's Participant Terminal System, as soon as practicable, but no later
than 2:00 p.m. on any Business Day, a withdrawal message instructing DTC to
debit such Book-Entry Note to the Paying Agent's participant account. DTC will
process the withdrawal message, provided that the Paying Agent's participant
account contains a principal amount of the Global Note representing such
Book-Entry Note that is at least equal to the principal amount to be debited.
If withdrawal messages are processed with respect to all the Book-Entry Notes
represented by a Global Note, the Paying Agent will mark such Global Note
"canceled", make appropriate entries in the Paying Agent's records and send
such canceled Global Note to the Issuer. The CUSIP number assigned to such
Global Note shall, in accordance with CUSIP Service Bureau procedures, be
canceled and not immediatly reassigned. If withdrawal messages are processed
with respect to one or more, but not all, of the Book-Entry Notes represented
by a Global Note, the Paying Agent will exchange such Global Note for two
Global Notes, one of which shall represent such Book-Entry Notes and shall be
canceled immediately after issuance and the other of which shall represent the
remaining Book-Entry Notes previously represented by the surrendered Global
Note and shall bear the CUSIP number of the surrendered Global Note.
If the purchase price for any Book-Entry Note is not timely paid to
the Participants with respect to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in DTC, acting on behalf of
such purchaser), such Participants and, in turn, the Presenting Agent may enter
an SDFS deliver order through DTC's Participant Terminal System debiting such
Book-Entry Note to such Agent's participant account and crediting such
Book-Entry Note to the participant account of the Paying Agent and shall notify
the Paying Agent and the Issuer thereof. Thereafter, the Paying Agent, (i) will
immediately notify the Issuer, once the Paying Agent has confirmed that such
Book-Entry Note has been credited to its participant account, and the
20
<PAGE> 42
Issuer shall immediately transfer by Fedwire (in immediately available funds)
to the Presenting Agent an amount equal to the price of such Book-Entry Note
which was previously sent by wire transfer to the account of the Issuer
maintained at Chemical Bank, and (ii) the Paying Agent will deliver the
withdrawal message and take the related actions described in the preceding
paragraph. Such debits and credits will be made on the Settlement Date, if
possible, and in any event not later than 5:00 p.m. on the following Business
Day. If the fail shall have occurred for any reason other than the Presenting
Agent's gross negligence or willful misconduct, including but not limited to
failure of the Presenting Agent to provide the Purchase Information to the
Issuer or to provide a confirmation to the purchaser, the Issuer will reimburse
the Presenting Agent on an equitable basis for its loss of the use of funds
during the period when the funds were credited to the account of the Issuer, or
for any other cost or expense; and in no event shall the Issuer be obligated to
pay any commission, as contemplated by the Agency Agreement, with respect to
any fail.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Note, DTC may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Note, the Paying Agent will provide for the
authentication and issuance of a Global Note representing the other Book-Entry
Notes to have been represented by such Global Note and will make appropriate
entries in its records.
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<PAGE> 43
EXHIBIT C
PURCHASE AGREEMENT
, 1994
J. C. Penney Company, Inc.
6501 Legacy Drive
Plano, Texas 75024-3698
Attention: Treasurer
The undersigned agrees to purchase the following principal amount of the
Securities described in the Agency Agreement dated , 1994 (the
"Agency Agreement"):
<TABLE>
<S> <C>
Principal Amount $ ______________________________
Interest Rate ________________%
Maturity Date __________________________, 19__
Discount __________% of Principal Amount
Price to be paid to
Issuer ((in immediately
available funds)) $ ______________________________
((in New York Clearing
House (next day) funds))
Commission to Agent $ ______________________________
Settlement Date ________________________________
</TABLE>
Except as otherwise expressly provided herein, all terms used herein which
are defined in the Agency Agreement shall have the same meanings as in the
Agency Agreement. The terms Agent and Agents, as used in the Agency Agreement,
shall be deemed to refer only to the undersigned for purposes of this Agreement.
This Agreement incorporates by reference all of the provisions of the
Agency Agreement (including any Amendment entered into pursuant thereto by the
Issuer and the undersigned Agent, to the extent applicable), except provisions
of the Agency Agreement relating specifically to solicitation by the Agents, as
agents, and except that (i) the phrase "jointly with any other indemnifying
party similarly notified" in Section 7(c) and the last sentence of Section 7(d)
shall not be applicable; and (ii) the term "this Agreement", as used in Section
7(d) of the Agency Agreement, shall be deemed to refer to this Agreement (and
not the Agency Agreement) except that in the fifth sentence such term shall be
deemed to refer to the Agency Agreement. You and we agree to perform, to the
extent applicable, our respective duties and obligations specifically provided
to be performed by each of us in the Procedures.
Our obligation to purchase Securities hereunder is subject to the accuracy
on the above Settlement Date of your representations and warranties contained in
Section 2 of the Agency Agreement (it
<PAGE> 44
being understood that such representations and warranties shall be deemed to be
made as of the date of this Purchase Agreement and references to the
Registration Statement and Prospectus shall be deemed to relate to the
Registration Statement and the Prospectus as amended as of the date hereof and
as of such Settlement Date) and to your performance and observance of all
covenants and agreements contained in Sections 4 and 6 thereof. Our obligation
hereunder is also subject to the following conditions:
(a) the satisfaction, at such Settlement Date, of each of the conditions
set forth in subsections (a) and (b) and (d) through (g) of Section 5 of the
Agency Agreement (it being understood that each document so required to be
delivered shall be dated such Settlement Date and that each such condition and
the statements contained in each such document that relate to the Registration
Statement or the Prospectus shall be deemed to relate to the Registration
Statement or the Prospectus, as the case may be, as amended or supplemented as
of the date hereof and at the time of settlement on such Settlement Date and
except that the opinion described in Section 5(d) shall be modified so as to
state that the Securities being sold on such Settlement Date, when delivered
against payment therefor as provided in this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Issuer enforceable in accordance with their
terms, subject only to the exceptions set forth in clause (iii) of Section 5(d)
of the Agency Agreement, and will conform to the description thereof contained
in the Prospectus as amended or supplemented at such Settlement Date;
(b) there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Issuer and its subsidiaries, taken as a whole, which, in our
judgment, materially impairs the investment quality of the Securities; and
(c) (such other conditions as may be agreed upon among the parties.)
In further consideration of our agreement hereunder, you agree that
between the date hereof and the above Settlement Date, you will not offer or
sell, or enter into any agreement to sell, any debt securities of the Issuer in
the United States, other than sales of Securities, borrowings under your
revolving credit agreements and lines of credit, the private placement of
securities and issuances of your commercial paper.
If for any reason our purchase of the above Securities is not consummated,
you shall remain responsible for the reasonable expenses to be paid or
reimbursed by you pursuant to Section 4 of the Agency Agreement and the
respective obligations of you and the undersigned pursuant to Section 7 shall
remain in effect. If for any reason the purchase by the undersigned of the
above Securities
2
<PAGE> 45
is not consummated other than because of a default by the undersigned or a
failure to satisfy a condition set forth in clause (iii), (iv) or (v) of
paragraph (b) above, you shall reimburse us, severally, for all out-of-pocket
expenses reasonably incurred by us in connection with the offering of the above
Securities and not otherwise required to be reimbursed pursuant to Section 4 of
the Agency Agreement.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
executed counterparts shall together constitute one and the same Agreement.
(INSERT NAME OF PURCHASER)
By: ________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
J. C. Penney Company, Inc.
By: ____________________________________
Name:
Title:
3
<PAGE> 1
July 1, 1994
Board of Directors
J. C. Penney Company, Inc.
6501 Legacy Drive
Plano, Texas 75024-3698
Dear Sirs:
As General Counsel of J. C. Penney Company, Inc., a Delaware
corporation ("Company"), I am familiar with the Restated Certificate of
Incorporation of the Company, as amended, and its by-laws, as amended.
I am also familiar with the corporate proceedings taken in connection
with the establishment of the Company's Medium-Term Notes, Series A program
regarding notes ("Notes") to be issued under an Indenture dated as of April 1,
1994 ("Indenture"), between the Company and Bank of America National Trust and
Savings Association, Trustee, which Indenture relates to the issuance and sale
from time to time of debt securities, each series of which is to be offered on
terms to be determined at the time of sale. I have examined Registration
Statement No. 33-53275 ("Registration Statement") filed by the Company on
Registration Form S-3 with the Securities and Exchange Commission
("Commission") on April 26, 1994, which became effective on April 29, 1994 for
the registration under the Securities Act of 1933, as amended ("Act"), of
$1,500,000,000 aggregate principal amount of debt securities (all of which debt
securities may be offered with warrants to purchase debt securities ) to be
made on a continuous or delayed basis pursuant to the provisions of Rule 415.
I have also examined a Prospectus Supplement dated July 1, 1994 (to the
Prospectus dated April 29, 1994 which was included in the Registration
Statement) relating to the Notes in the form filed with the Commission pursuant
to Rule 424(b)(5) and such other documents and records as I have deemed
appropriate for the purpose of this opinion.
Based upon the foregoing, I am of opinion as follows:
(i) The execution and delivery of the Indenture and the issuance
and sale of the Notes have been validly authorized by the Company and
the Indenture constitutes a valid and binding obligation of the
Company in accordance with its terms subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
<PAGE> 2
(ii) The Notes, when duly executed on behalf of the Company,
authenticated by or on behalf of the Trustee, and sold by the Company
will be validly issued and will constitute valid and binding
obligations of the Company in accordance with their terms and the
terms of the Indenture, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability affecting creditors' rights and to general equity
principles.
I hereby consent to the reference to me under the heading "Validity of
Securities" in the Prospectus included in said Registration Statement and in
the heading "Validity of Notes" in the Prospectus Supplement.
Very truly yours,
/s/ C. R. LOTTER
C. R. Lotter
General Counsel
