EXHIBIT 1
PHH CORPORATION
U.S. $3,000,000,000
Medium-Term Notes
DISTRIBUTION AGREEMENT
[ ], 2000
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
North Tower
World Financial Center
New York, New York 10281
Dear Sirs:
Section 1. Introductory. PHH Corporation, a Maryland
corporation (the "Company"), has filed with the Securities and Exchange
Commission (the "Commission"), and the Commission declared effective on [
], 2000, a registration statement on Form S-3 (Registration No. 333-[ ],
hereinafter called the "Registration Statement"), covering up to U.S.
$3,000,000,000 aggregate principal amount of the Company's debt securities
(the "Securities"). Any reference herein to the term "Registration
Statement" shall be deemed to refer, unless the context otherwise
indicates, to the Registration Statement, including the form of final
prospectus, financial statements and other documents included or
incorporated by reference therein and all exhibits included therein, as
from time to time amended, and the term "Prospectus" shall be deemed to
refer collectively, unless the context otherwise indicates, to the final
prospectus in the form filed with the Commission pursuant to Rule 424(b)
under the Securities Act of 1933 (the "Act") and each prospectus as
supplemented mailed to the Commission pursuant to Rule 424(c) under the
Act, including documents incorporated by reference therein, as from time to
time amended or supplemented (exclusive of any supplements relating solely
to Securities that are not Offered Securities as hereinafter defined). The
Securities will be issued under one or more indentures (the "Indentures")
identified and described in the Registration Statement between the Company
and one or more commercial banks, as trustees (the "Trustees"). One class
of Securities that the Company is authorized to issue under the Indentures
is Medium-Term Notes (the "Offered Securities"). Without limitation on the
Company's right to sell all other classes of Securities through
underwriters (which may include any or all of you) or dealers, or directly
to one or more institutional investors, or through agents (which may
include any or all of you), and without limitation on the Company's right
to sell Offered Securities through other agents as provided in Section 3(a)
hereof, the Company confirms its agreement with you with respect to the
issue and sale by the Company of up to U.S. $3,000,000,000 (or the
equivalent in foreign currency or currency units) principal amount of the
Offered Securities issued under the Indentures, subject to reduction as a
result of the concurrent sale of other Securities of the Company.
Section 2. Representations and Warranties of the Company. The
Company represents and warrants to each of you, as of the date hereof, as
of the Closing Time hereinafter referred to and as of the times referred to
in Sections 4(k) and 4(l) (in each case the "Representation Date"), as
follows:
(a) The Registration Statement and the Prospectus, on their
respective dates of effectiveness and filing did, and as of the applicable
Representation Date will, conform in all material respects to the
requirements of the Act, the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the rules and regulations (the "Rules and Regulations")
of the Commission; as of the respective dates of their effectiveness and
filing, neither the Registration Statement nor the Prospectus did, nor as
of the applicable Representation Date will, include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
contained in this paragraph do not apply to (i) statements or omissions in
the Registration Statement or the Prospectus based upon written information
furnished to the Company by any of you or any of the Trustees expressly for
use therein or (ii) that part of the Registration Statement that
constitutes the Statement of Eligibility under the Trust Indenture Act on
Form T-1 of any Trustee, except statements or omissions in such Statement
made in reliance upon information furnished in writing to such Trustee by
or on behalf of the Company for use therein.
(b) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Maryland and
has full power and authority to conduct the businesses presently being
conducted by it.
(c) Neither the execution or delivery of this Agreement, the
Offered Securities or the Indentures, the consummation of the transactions
herein or therein contemplated, nor compliance with the terms, conditions
or provisions of any such instruments, will result in a breach or violation
of any of the terms and provisions of, or constitute (with due notice or
lapse of time, or both) a default under, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any material
subsidiary of the Company is a party or by which it or any of its assets is
bound, any statute, the charter or by-laws of the Company or any material
subsidiary or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any material
subsidiary or over its assets (except, no representation, warranty or
agreement is being made in this paragraph as to the Blue Sky or securities
laws of any State of the United States or the District of Columbia, the
Commonwealth of Puerto Rico or foreign jurisdictions).
(d) This Agreement has been duly authorized, executed and
delivered on behalf of the Company and is a valid and legally binding
agreement of the Company enforceable in accordance with its terms (except
as the same may be limited by bankruptcy, insolvency, reorganization or
other laws relating to or affecting creditors' rights generally); the
Offered Securities have been duly authorized and, when authenticated as
contemplated by the applicable Indenture or Indentures and delivered and
paid for in accordance with this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms (except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting creditors' rights
generally) and will be entitled to the benefits provided by the applicable
Indenture or Indentures.
(e) There is no consent, approval, authorization, order,
registration or qualification of or with any court or any regulatory
authority or other governmental body having jurisdiction over the Company
or any material subsidiary which is required for, or the absence of which
would materially affect, the issue and sale of the Offered Securities as
contemplated by this Agreement or the execution, delivery or performance of
the Indentures, except the registration under the Act of the Offered
Securities, the qualification of the Indentures under the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the securities or "Blue Sky" laws
of any jurisdiction in connection with the offering of the Offered
Securities by the Company and the Agent in the manner contemplated hereby.
(f) All financial statements of the Company provided to the
Agent(s) by the Company (including those incorporated by reference in the
Registration Statement) fairly present the financial condition of the
Company in all material respects and have been prepared in conformity with
U.S. generally accepted accounting principles.
(g) The Company has complied with all provisions of section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
Section 3. Solicitations as Agent; Purchases as Principal or
Underwriter.
(a) Solicitations as Agent. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions
herein set forth, each of you will use your best efforts to solicit offers
to purchase the Offered Securities upon the terms and conditions set forth
in the Prospectus as then amended or supplemented. You are hereinafter
sometimes referred to in your capacity as agents, individually as an
"Agent" and collectively as the "Agents." The Company reserves the right,
and may submit offers, to purchase and sell Offered Securities directly to
the public on its own behalf in jurisdictions in which it is authorized to
do so. In addition, after notice to each of the Agents, the Company may
appoint any additional agent to solicit and receive offers to purchase
Offered Securities from the Company upon the terms and conditions set forth
in the Prospectus, provided that any such additional agent is made a party
to this Agreement or executes a distribution agreement substantially
identical to this Agreement.
Each Agent further undertakes that in connection with the
distribution of Offered Securities denominated in any foreign currency or
currency unit, it will comply with the further restrictions in respect of
offers and sales of Offered Securities so denominated set forth in Exhibit
C hereto.
The Company agrees to pay each Agent a commission for each
Offered Security sold, the purchase of which is solicited by such Agent, as
follows:
Commission as a Percentage
Maturity of Principal Amount
9 months to less than 1 year .125%
1 year to less than 18 months .150
18 months to less than 2 years .200
2 years to less than 3 years .250
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 6 years .500
6 years to less than 7 years .550
7 years to less than 10 years .600
10 years to less than 15 years .625
15 years to less than 20 years .700
20 years to 30 years .750
More than 30 years to 40 years To be negotiated
The authorized denominations of Offered Securities denominated
in a currency or currency unit other than United States dollars shall be
the equivalent, as determined by the Market Exchange Rate (as defined
herein) for such currency or currency unit on the business day immediately
preceding the trade date for such Offered Securities, of U.S. $1,000
(rounded down to an integral multiple of 1,000 units of such currency or
currency unit), and any larger amount that is an integral multiple of 1,000
units of such currency or currency unit. The authorized denominations of
Offered Securities denominated in United States dollars shall be U.S.
$1,000 and any larger amount that is an integral multiple of U.S. $1,000.
The Agents shall communicate to the Company, orally or in writing, each
offer to purchase Offered Securities other than those rejected by the
Agents. The Company shall have the sole right to accept offers to purchase
the Offered Securities and may reject any such offer in whole or in part.
The Agents shall have the right to reject any offer to purchase the Offered
Securities in whole or in part, and any such rejection shall not be deemed
a breach of their agreements contained herein.
The "Market Exchange Rate" on a given date for a given foreign
currency means the noon buying rate in New York City for cable transfers in
such currency as certified for customs purposes by the Federal Reserve Bank
of New York on such date; provided, however, that in the case of Euros,
Market Exchange Rate means the rate of exchange determined by the Council
of European Communities (or any successor thereto) as published on such
date or the most recently available date in the Official Journal of the
European Communities (or any successor publication).
(b) Purchases as Principal or Underwriter. Each sale of Offered
Securities to any or all of you as principal or underwriter for resale to
others shall be made in accordance with the terms of this Agreement and a
separate agreement to be entered into between us which will provide for the
sale of such Offered Securities to, and the purchase and reoffering thereof
by, any or all of you. Each such separate agreement is herein referred to
as a "Terms Agreement." Your commitment to purchase Offered Securities
pursuant to any Terms Agreement shall be deemed to have been made on the
basis of the representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set forth. Each
Terms Agreement shall specify the currency denomination, principal amount
and maturity of Offered Securities to be purchased by you pursuant thereto,
the price to be paid to the Company for such Offered Securities (which, if
not so specified in a Terms Agreement, shall be at a discount equivalent to
the applicable commission set forth in Section 3(a) hereof), the initial
public offering price, if any, at which the Offered Securities are proposed
to be reoffered, the time and place of delivery of and payment for such
Offered Securities, and any provisions relating to rights of, and default
by, any purchasers acting together with you in the reoffering of the
Offered Securities. To the extent required, such Terms Agreement shall also
specify any requirements for opinions of counsel, officer's certificates
and letters from its independent certified public accountants (who must be
of national standing) (the "Accountants") pursuant to Section 5 hereof.
Terms Agreements, each of which shall be substantially in the form of
Exhibit A hereto, may take the form of an exchange of any standard form of
written communication (including a written confirmation of an oral
agreement) between the Company and each of you participating in the sale
referred to therein, including by telecopy or telex. If agreed to by the
Company and any one or more Agents, such Agents may purchase Offered
Securities as principal pursuant to the procedures for documentation and
settlement applicable to agency sales. The Agents may utilize a selling or
dealer group in connection with the resale of the Offered Securities.
(c) Procedures. Certain administrative functions are set forth
in the Medium-Term Note Administrative Procedures (the "Procedure"),
attached hereto as Exhibit B. You and the Company agree to perform the
respective duties and obligations specifically provided to be performed by
each of them herein and in the Procedure, as amended from time to time. The
Procedure may only be amended by written agreement of all the parties
hereto.
(d) Delivery. The documents required to be delivered by Section
5 hereof (subject to paragraph (b) above) shall be delivered at the office
of Skadden, Arps, Slate, Meagher and Flom LLP, Four Times Square, New York,
New York(or any other successor address of which the Company receives
notice in writing), on the date hereof, and at the delivery time specified
in each Terms Agreement (each called a "Closing Time").
Section 4. Covenants of the Company. The Company covenants with
you that:
(a) The Company will make no amendment or supplement (other
than by an amendment or supplement in the form previously agreed to by the
parties providing solely for a change in the interest rates or maturities
offered in the Offered Securities, or for a change in the currency in which
the Offered Securities are denominated, chosen from among currencies that
have previously been described in the Prospectus (a "Pricing Supplement"))
to the Registration Statement or the Prospectus, whether by the filing of
documents incorporated by reference in whole or in part into the
Registration Statement or the Prospectus or otherwise, or make any change
in the form of final prospectus prior to the time it is first filed with
the Commission pursuant to Rule 424(b) under the Act, prior to having
furnished each of you a reasonable opportunity to review the same and which
shall not have been disapproved by you; the Company will advise each of you
promptly of the filing and effectiveness of any amendment to the
Registration Statement or the filing of any amendment or supplement (other
than a Pricing Supplement) to the Prospectus (including the filing and
effectiveness of any document incorporated by reference in whole or in part
into the Registration Statement or the Prospectus), and of the institution
by the Commission of any stop-order proceedings in respect of the
Registration Statement, 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 Offered
Securities is required to be delivered under the Act any event occurs as a
result of which the Registration Statement or Prospectus 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, not misleading, or if, in your reasonable
opinion or in the reasonable opinion of the Company, it is necessary at any
time to amend or supplement the Registration Statement or Prospectus
(including any document incorporated by reference in whole or part therein)
to comply with the Act, the Company promptly will notify you, or you shall,
as the case may be, suspend solicitation of offers to purchase Offered
Securities and, if so notified by the Company, you shall forthwith suspend
such solicitation and cease using the Prospectus; the Company will promptly
prepare and file with the Commission an amendment or supplement to such
Registration Statement or Prospectus (or to such document incorporated by
reference therein) which will correct such statement or omission or effect
such compliance and will supply such amended or supplemented Prospectus or
document to each of you in such quantities as you may reasonably request;
and if such amendment or supplement or document, and any documents,
certificates and opinions furnished to each of you pursuant to paragraph
(i) below in connection with the preparation or filing of such amendment or
supplement, are satisfactory in all respects to you, you will, upon the
filing of such amendment or supplement or document with the Commission or
effectiveness of an amendment to the Registration Statement, resume your
respective obligation to solicit offers to purchase Offered Securities
hereunder.
(c) As soon as practicable, the Company will make generally
available to its security holders an earnings statement or statements that
will satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(d) The Company will furnish to each of you copies of all
amendments of and supplements (other than Pricing Supplements, copies of
which need only be furnished to the Agents involved in the sale of the
Offered Securities to which such Pricing Supplements relates) to the
Registration Statement and the Prospectus, as soon as available and in such
quantities as you reasonably request.
(e) The Company will take such action as you may request in
order to qualify the Offered Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you may request;
provided, however, that in no event shall the Company be obligated to
subject itself to taxation or to qualify to do business in any jurisdiction
where it is not now so subject or qualified or to take any action which
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Offered Securities, in any jurisdiction
where it is not now so subject.
(f) So long as any Offered Security is outstanding, the Company
will furnish to each of you, as soon as practicable after the end of each
fiscal year, a balance sheet and statement of income of the Company as at
the end of and for such fiscal year in reasonable detail and reported on by
independent public accountants. The Company will furnish to each of you as
soon as practicable after the end of each quarterly fiscal period (except
for the last quarterly fiscal period of each fiscal year), a balance sheet
and statement of income of each of the Company as at the end of such period
and for the fiscal year to date, certified by either the Chief Financial
Officer or Chief Accounting Officer of the Company. So long as the Company
has active subsidiaries, such financial statements will be furnished on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated.
(g) The Company shall furnish to each of you as soon as
practicable following the filing of any amendment or supplement (other than
a Pricing Supplement) to the Registration Statement or Prospectus
(including the filing of any document incorporated by reference in whole or
in part into the Registration Statement or Prospectus), a certificate of
(i) the Chairman of the Board, the President, any Executive Vice President
or any Vice President and (ii) the Vice President and Treasurer, the Vice
President and Controller or any other Vice President of the Company to the
effect that, at the date of such certificate, neither the Registration
Statement nor the Prospectus includes any untrue statement of a material
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the foregoing does not apply to (i) statements or
omissions in the Registration Statement or Prospectus based upon written
information furnished to the Company by any of you or any of the Trustees
expressly for use therein or (ii) that part of the Registration Statement
that constitutes the Statement of Eligibility under the Trust Indenture Act
on Form T-1 of any Trustee, except statements or omissions in such
Statement made in reliance upon information furnished in writing to such
Trustee by or on behalf of the Company for use therein.
(h) The Company shall furnish to each of you (i) forthwith
after the Company is required to file the same with the Commission, copies
of its annual reports and quarterly reports on Forms 10-K and 10-Q,
respectively, its proxy statements and of any other information, documents
and reports that the Company is required to file with the Commission
pursuant to Section 13, 14 or Section 15(d) of the Securities Exchange Act
of 1934 or with the New York Stock Exchange, Inc., or any other national
securities exchange on which any security of the Company is listed and (ii)
at the earliest time the Company makes the same available to others, copies
of annual reports and other financial reports of the Company furnished or
made available to the public generally.
(i) The Company shall furnish to each of you such documents,
certificates of officers of the Company and opinions of counsel for the
Company relating to the business, operations and affairs of the Company,
the Registration Statement, the Prospectus (including any amendments or
supplements thereto), the Indenture, the Offered Securities, this
Agreement, the Procedure and the performance by the Company and you of our
respective obligations hereunder and thereunder as you may from time to
time and at any time prior to the termination of this Agreement reasonably
request.
(j) The Company shall pay all expenses incident to the
performance of its obligations under this Agreement, including the fees and
disbursements of its Accountants, the cost of printing and delivery of the
Registration Statement, the Prospectus (including all amendments and
supplements thereto) and the Indentures, the costs of preparing, printing,
packaging and delivering the Offered Securities, the fees and disbursements
of the Trustees and the fees of any agency that rates the Offered
Securities, the reasonable fees of your counsel, and will reimburse you
from time to time for all reasonable out-of-pocket expenses incurred by
you, including in connection with the offering and sale of the Offered
Securities and the qualification of the Offered Securities for sale and
determination of eligibility for investment of the Offered Securities under
the securities or Blue Sky laws of such jurisdictions as you designate and
any advertising expenses connected with the offering and sale of Offered
Securities.
(k) Each acceptance by the Company of an offer to purchase
Offered Securities and each delivery of Offered Securities in any sale made
to, or pursuant to an offer solicited by, you will be deemed to be an
affirmation to any Agent that solicited such offer or purchased such
Offered Securities that the representations and warranties of the Company
contained in Sections 2(a) through 2(e) are true and correct at the time of
such acceptance or delivery, as though made at and as of such time, and a
representation and warranty to any Agent that solicited such offer or
purchased such Offered Securities that neither the Registration Statement
nor the Prospectus includes any untrue statement of a material fact or
omits to state any material fact 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 (i) statements or omissions in
the Registration Statement or the Prospectus based upon written information
furnished to the Company by any of you or any of the Trustees expressly for
use therein or (ii) that part of the Registration Statement that
constitutes the Statement of Eligibility under the Trust Indenture Act on
Form T-1 of any Trustee, except statements or omissions in such Statement
made in reliance upon information furnished in writing to such Trustee by
or on behalf of the Company for use therein.
(l) Each time that the Registration Statement or the Prospectus
(including any portion of any document incorporated by reference in whole
or part into either), is amended or supplemented (other than by a Pricing
Supplement), the Company will deliver or cause to be delivered forthwith to
each of you a certificate of the officers of the Company as specified in
Section 4(g), dated the date of the effectiveness of such amendment or the
date of filing of such supplement, in form reasonably satisfactory to you,
to the effect that the statements contained in the certificate referred to
in Section 5(c)(ii) that was last furnished to you (either pursuant to
Section 5(c)(ii) or this Section 4(l)) are true and correct at the time of
the effectiveness of such amendment or the filing of such supplement as
though made at and as of such time or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section
5(c)(ii) dated the effective date of such amendment or the date of filing
of such supplement.
(m) Each time that the Registration Statement or the
Prospectus, including any portion of any document incorporated by reference
in whole or part into either, is amended or supplemented (other than by a
Pricing Supplement), and except for an amendment or supplement occasioned
by the incorporation by reference of proxy materials of the Company or
reports of the Company on Form 10-K, Form 10-Q or Form 8-K (in which case
the written opinion furnished by the Company referred to hereafter shall be
that of the General Counsel or Assistant General Counsel of the Company),
the Company shall furnish or cause to be furnished forthwith to each of you
a written opinion of counsel for the Company acceptable to the Agents,
dated the date of the effectiveness of such amendment or the date of filing
of such supplement or the filing of such document incorporated by reference
into the Registration Statement or the Prospectus, in form satisfactory to
you, relating to the Registration Statement and the Prospectus.
(n) Each time that the Registration Statement or the Prospectus
is amended or supplemented to set forth amended or supplemental financial
information, whether by incorporation by reference in whole or in part or
otherwise, the Company shall cause its Accountants forthwith to furnish to
each of you a letter, dated the date of the effectiveness of such amendment
or the date of filing of such supplement, in form satisfactory to you, of
the same tenor as the letter referred to in Section 5(d) with such changes
as may be necessary to reflect the amended or supplemental financial
information included in the Registration Statement and the Prospectus and
the other financial information of the Company available within five days
of the date of such letter; provided, however, that such Accountants need
only furnish you a letter in compliance with SAS 71, as appropriately
modified, where such amendment or supplement or document incorporated by
reference only sets forth unaudited quarterly financial information
contained in the Company's Quarterly Report on Form 10-Q.
(o) Between the date of any Terms Agreement and the settlement
date with respect to the Offered Securities covered thereby, the Company
will not, without the prior consent of each of you that is a party to such
Terms Agreement, offer or sell, or enter into any agreement to sell, any
debt securities of the Company, other than (i) borrowings under the
Company's revolving credit agreements and lines of credit and (ii)
issuances of the Company's commercial paper.
(p) The Company shall offer to any person who has agreed to
purchase Offered Securities as a result of an offer to purchase solicited
by any of you the right to refuse to purchase and pay for such Offered
Securities if, on the related settlement date fixed pursuant to the
Procedure, (i) the condition set forth in Section 5(a) hereof shall not be
satisfied, (ii) the rating assigned by any nationally recognized securities
rating agency to any debt securities of the Company as of the date of the
applicable Terms Agreement shall have been lowered since that date or any
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its ratings of
any debt securities of the Company or (iii) if any of the events set forth
in clause (ii) or clause (iii) of the second sentence of Section 9 hereof
shall have occurred (it being understood that, for purposes of this
paragraph (p), the judgment of such person shall be substituted for the
judgment of the Agent with respect to the matters referred to in clause
(ii) of the second sentence of Section 9 hereof, and that the Agent shall
have no duty or obligation to exercise its judgment on behalf of such
person). This paragraph (p) shall not affect any other right of any person
who has agreed to purchase Offered Securities to refuse to purchase and pay
for such Offered Securities that arises under any other provision of this
Agreement.
Section 5. Conditions of Obligations. Your several obligations
to solicit offers to purchase the Offered Securities as Agent(s) and your
obligations to purchase Offered Securities pursuant to any Terms Agreement
or otherwise will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the
statements of the Company's officers made in each certificate furnished
pursuant to the provisions hereof, to the performance and observance by the
Company of all covenants and agreements herein contained on its part to be
performed and observed and to the following additional conditions
precedent:
(a) At and subsequent to the date hereof and at each Closing
Time no stop-order suspending the effectiveness of the Registration
Statement shall have been issued and remain outstanding and no proceedings
for that purpose shall have been instituted or, to your knowledge or the
knowledge of the Company, threatened or contemplated by the Commission.
(b) At the date hereof and at each Closing Time if called for
by the applicable Terms Agreement, each of you (or, with respect to a
Closing Time called for by any Terms Agreement, each of you that is a party
to such Terms Agreement) shall have received an opinion or opinions, dated,
as applicable, either the date hereof or such Closing Time, of one or more
counsels for the Company acceptable to the Agents (it being understood that
the opinion of the General Counsel and/or Vice President, Legal of the
Company shall be acceptable to the Agents unless otherwise provided in the
Terms Agreement), substantially identical to the proposed form of their
opinions heretofore delivered to each of you.
(c) (i) At the date hereof and at each Closing Time, subsequent
to the respective dates as of which information is given in the
Registration Statement and the Prospectus (except as set forth in or
contemplated by the Registration Statement and the Prospectus), the Company
shall not have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions not in the ordinary
course of business, nor shall there have been any material decrease in the
stockholders' equity or any material increase in the long-term debt of the
Company or any material adverse change in the condition, financial or
otherwise, or in the earnings, affairs or business prospects of the
Company, whether or not arising in the ordinary course of business.
(ii) At the date hereof and at each Closing Time if called for
by the applicable Terms Agreement, each of you (or, with respect to a
Closing Time called for by any Terms Agreement, each of you that is a party
to such Terms Agreement) shall have received a certificate, dated, as
applicable, the date hereof or such Closing Time, signed by the officers of
the Company specified in Section 4(g), certifying that, to the best of
their knowledge after reasonable investigation, the statements made in the
immediately preceding paragraph (i) are accurate and to the effect that (A)
no stop- order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for that purpose have been instituted
or, to the knowledge of such officers, are threatened or contemplated by
the Commission, (B) the Registration Statement and the Prospectus conform
in all material respects to the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations, (C) neither the Registration
Statement nor the Prospectus contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the foregoing does not apply to (i) statements or
omissions in the Registration Statement or the Prospectus made in reliance
upon information furnished in writing to the Company by any of you or on
your behalf or on behalf of any of the Trustees expressly for use therein
or (ii) that part of the Registration Statement that constitutes the
Statement of Eligibility under the Trust Indenture Act on Form T-1 of any
Trustee, except statements or omissions in such Statement made in reliance
upon information furnished in writing to such Trustee by or on behalf of
the Company for use therein, and (D) the representations and warranties of
the Company included in Sections 2(a) through 2(g) are, as of the Closing
Time, accurate in all material respects and the Company has performed and
observed all covenants and agreements herein contained on its part to be
performed and observed prior to the Closing Time.
(d) At the date hereof, and at each Closing Time if called for
by the applicable Terms Agreement, each of you (or, with respect to a
Closing Time called for by any Terms Agreement, each of you that is a party
to such Terms Agreement) shall have received a letter, dated as of the
Closing Time, signed by the Accountants, substantially identical to the
proposed form of such letter heretofore delivered to each of you.
(e) At the date hereof and at each Closing Time if called for
by the applicable Terms Agreement, each of you (or with respect to a
Closing Time called for by any Terms Agreement, each of you that is a party
to such Terms Agreement) shall have received an opinion, dated such date,
of Skadden, Arps, Slate, Meagher and Flom LLP, or other counsel selected by
the Agents, with respect to the Company, the Offered Securities, the
Registration Statement, including the form of final prospectus included
therein, this Agreement and the form and sufficiency of all proceedings
taken in connection with the authorization, sale and delivery of the
Offered Securities, all of which shall be satisfactory in all respects to
you, and the Company shall have furnished to your counsel such documents as
such counsel may reasonably request for the purpose of enabling them to
render such opinion.
(f) At the date hereof and at each Closing Time if called for
by the applicable Terms Agreement, the Company shall have furnished to each
of you (or, with respect to a Closing Time called for by any Terms
Agreement, each of you that is a party to such Terms Agreement) such
further information and documents as you may have reasonably requested.
(g) There shall not have occurred any change, or any
development involving a prospective change, involving currency exchange
rates, exchange controls, taxation or similar matters that in your
respective judgments makes it impracticable or inadvisable to proceed with
your solicitation of offers to purchase the Offered Securities denominated
in the affected currency or currencies, or your purchase of such Offered
Securities from the Company as principal; provided, however, that any such
change or development shall not affect your respective obligations with
respect to Offered Securities denominated in any currency not so affected.
Your respective obligations to purchase Offered Securities
pursuant to any Terms Agreement (or as contemplated by the last sentence of
Section 3(b) hereof) will be subject to the following further conditions:
(a) the rating assigned by any nationally recognized securities rating
agency to any debt securities of the Company as of the date of the
applicable Terms Agreement shall not have been lowered since that date nor
shall any such organization have publicly announced that it has under
surveillance or review, with possible negative implications, its ratings of
any debt securities of the Company and (b) there shall not have come to
your attention any facts that would cause you to believe that the
Prospectus, at the time it was required to be delivered to a purchaser of
the Offered Securities, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not
misleading.
Section 6. Indemnification.
(a) The Company shall indemnify and hold harmless each of you,
each of your partners, directors, officers and employees and each person,
if any, who controls you within the meaning of Section 15 of the Act
against any and all losses, claims, damages, and liabilities, joint or
several (including any investigation, legal (including counsel fees) and
other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which you or they, or any of you or them, may become subject under the Act,
the Securities Exchange Act of 1934 or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that the foregoing does not apply to (i) untrue statements or omissions or
alleged untrue statements or omissions in such preliminary prospectus, the
Registration Statement or the Prospectus, based upon written information
furnished to the Company by any of you expressly for use therein or (ii)
that part of the Registration Statement that constitutes the Statement of
Eligibility under the Trust Indenture Act on Form T-1 of any Trustee,
except untrue statements or omissions or alleged untrue statements or
omissions in such Statement made in reliance upon information furnished in
writing to such Trustee by or on behalf of the Company for use therein;
provided, however, that the aforesaid indemnity agreement with respect to
the Registration Statement and the Prospectus shall not inure to your or
their benefit (if the person asserting any such loss, claim, damage or
liability purchased the Offered Securities which are the subject thereof
through you), or to the benefit of any person controlling you, if the
Company shall have furnished an amendment or supplement to the Prospectus
to you prior to the time a written confirmation of the sale of such Offered
Securities was sent or given to the person asserting such loss, claim,
damage, liability or action for which indemnification is sought, and the
Prospectus as so supplemented or amended (i) corrected the alleged
misstatement or omission on which the asserted loss, claim, damage or
liability was based and (ii) was not sent or given to such person at or
prior to the written confirmation of the sale of such Offered Securities to
such person.
(b) Each Agent shall indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of Section
15 of the Act, each director of the Company and each officer of the Company
who signs the Registration Statement or any amendment thereto to the same
extent as the foregoing indemnity from the Company to you but only insofar
as such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or omission or alleged untrue statement or
omission which was made in any preliminary prospectus, the Registration
Statement or the Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by such Agent expressly for
use therein.
(c) Any party which proposes to assert the right to be
indemnified under this Section 6 shall, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party under
paragraph (a) or (b) of this Section 6, notify each such indemnifying party
of the commencement of such action, suit or proceeding, enclosing a copy of
all papers served, but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any liability
which it may have to any indemnified party otherwise than under paragraph
(a) or (b) of this Section 6. In case any such action, suit or proceeding
is brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled
to participate in, and, to the extent that it wishes, jointly with any
other indemnifying party, similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (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 for any
legal or other expenses, other than reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel will
be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party has been authorized by the indemnifying
party, (ii) the indemnified party shall have reasonably concluded that
there may be a conflict of interest between the indemnifying party and the
indemnified party in the conduct of the defense of such action (in which
case the indemnifying party shall not have the right to direct the defense
of such action on behalf of the indemnified party) or (iii) the
indemnifying party has not in fact employed counsel to assume the defense
of such action, in any of which events such fees and expenses shall be
borne by the indemnifying party. An indemnifying party shall not be liable
for any settlement of any action or claim effected without its consent
(which shall not be unreasonably withheld). No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any action or claim in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and each of you on the other from the offering of the Securities
to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on
the one hand and each of you on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and each of you on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Offered Securities
(before deducting expenses) received by the Company bear to the total
commissions or discounts received by each of you in respect thereof. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading
relates to information supplied by the Company on the one hand or by you on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and you agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Agent shall be
required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased by or through such Agent were
sold exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Agents' obligations to contribute
pursuant to this Section 6(d) are several, in proportion to the respective
principal amounts of Offered Securities purchased or sold by each of such
Agents, and not joint.
(e) The obligations of the Company under this Section 6 shall
be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any,
who controls you within the meaning of the Act; and your obligations under
this Section 6 shall be in addition to any liability which you may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company and to each person, if any, who
controls the Company within the meaning of the Act.
Section 7. Position of the Agent(s). In soliciting purchases of
the Offered Securities as Agent, each Agent is acting solely as agent for
the Company, and not as principal. Each Agent shall make reasonable efforts
to assist the Company in obtaining performance by each purchaser whose
offer to purchase Offered Securities has been solicited by such Agent and
accepted by the Company, but such Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any reason.
Section 8. Representations and Indemnities to Survive Delivery.
Your respective indemnities, agreements, representations, warranties and
other statements and those of the Company or its officers set forth in or
made pursuant to this Agreement shall remain in full force and effect,
regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any of you or on behalf of the Company or any of
its officers or directors or any controlling person, and will survive each
delivery of and payment for any of the Offered Securities.
Section 9. Termination. This Agreement may be terminated at any
time (i) by the Company with respect to any Agent by giving written notice
of such termination to such Agent or (ii) by any Agent, as to the rights
and obligations of such Agent only, by giving written notice to the
Company. Any Agent that is a party to any Terms Agreement may also
terminate such Terms Agreement (or other obligation to purchase Offered
Securities as principal as contemplated by the penultimate sentence of
Section 3(b) hereof), immediately upon notice to the Company, at any time
prior to the Closing Time relating thereto (i) if there has been, since the
respective dates as of which information is given in the Registration
Statement and Prospectus, any material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries considered as
one enterprise, or in the earnings, affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred
any outbreak or escalation of hostilities or other calamity or crisis the
effect of which on the financial markets of the United States, or of any
other country in the currency of which the Offered Securities are
denominated, is such as to make it, in the judgment of such Agent,
impracticable to market the Offered Securities or enforce contracts for the
sale of the Offered Securities, or (iii) if trading in any securities of
the Company has been suspended by the Commission or a national securities
exchange, or if trading generally on either the American Stock Exchange or
the New York Stock Exchange has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of
the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal or New York State
authorities or by authorities in any other country in the currency of which
the Offered Securities are denominated. In the event of such termination by
the Company, the Company and any Agent as to which this Agreement has been
terminated shall have no liability or other obligation to each other, and
in the event of such termination by an Agent, such Agent and the Company
shall have no further liability or obligation to each other, in each case
except as provided in the first sentence of the third paragraph of Section
3(a), Section 4(c), Section 4(j), Section 6 and Section 8 and except that,
if at the time of termination (i) an offer to purchase any of the Offered
Securities has been accepted by the Company but the time of delivery to the
purchaser or its agent of the Offered Security or Offered Securities
relating thereto has not occurred or (ii) any Agent shall own any of the
Offered Securities which were bought by such Agent as principal with the
intention of reselling them, the Company's obligations provided in Sections
4(k) through 4(n) and, in the circumstances described in clause (ii), all
obligations of the Company relating to such Agent's ability to resell such
Offered Securities, shall not be terminated.
Section 10. Notices. All communications hereunder will be in
writing and, if sent to you, will be mailed, delivered or telegraphed and
confirmed in duplicate originals to:
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Attention: Short and Medium Term Finance
Telephone: (212) 325-7198
Telecopy: (212) 325-8183
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Credit Control--Medium Term Notes
Telecopy: (212) 363-7609
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
North Tower
World Financial Center
New York, New York, 10281
Attention: MTN Product Management
Telecopy: (212) 449-2234
or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 6 Sylvan Way, Parsippany, New Jersey
07054, Attention of Vice President and Treasurer.
Section 11. Parties. This Agreement will inure to the benefit
of and be binding upon each of the parties hereto and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
is to be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons,
directors, officers and employees referred to in Section 6, any legal or
equitable right, remedy or claim under or in respect of this Agreement or
any provision herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole exclusive
benefit of the parties hereto and their respective successors and said
controlling persons and said directors, officers and employees, and for the
benefit of no other person, firm or corporation. No purchaser of any
Offered Securities through any Agent will be deemed to be a successor by
reason merely of such purchase.
Section 12. Governing Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Company and you in accordance with its terms.
Very truly yours,
PHH CORPORATION
By_________________________________________
Confirmed and Accepted, as of the date first above-written:
CREDIT SUISSE FIRST BOSTON CORPORATION
By ____________________________________________
GOLDMAN, SACHS & CO.
By_____________________________________________
Goldman, Sachs & Co.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By_____________________________________________
EXHIBIT A
PHH CORPORATION
(A Maryland corporation)
Medium-Term Notes
TERMS AGREEMENT
[Date]
PHH Corporation
6 Sylvan Way
Parsippany, New Jersey 07054
Attention: __________________
Re: Distribution Agreement for Above-Mentioned
Securities
Pursuant to the Distribution Agreement dated _________, 2000
between PHH Corporation (the "Company") and [Agent(s)], the undersigned
agrees to purchase the Company's Medium-Term Notes having the principal
amounts (denominated in the respective currencies), maturities, interest
rates and other terms set forth in Schedule I hereto.
[The opinions referred to in Sections 5(b) and 5(e) of the
Distribution Agreement, the accountants' letter referred to in Section 5(d)
of the Distribution Agreement [and the officer's certificate referred to in
Section 5(c)(ii) of the Distribution Agreement] will be required.]
[Agent(s)]
Accepted: By__________________________________
PHH CORPORATION
By______________________________
Schedule I
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Principal Discount (as Initial Public
Maturity Settlement Amount and % of Principal Offering
Date Date Currency Interest Rate Amount) Price Trustee
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A.
B.
C.
D.
E.
F.
G.
H.
Time of delivery
Place of delivery
[Other terms]
[Closing date]
</TABLE>
EXHIBIT B
PHH CORPORATION
Administrative Procedures
These Administrative Procedures relate to the Offered
Securities defined in the Distribution Agreement, dated [ ], 2000 (the
"Distribution Agreement"), between PHH Corporation (the "Company") and
Credit Suisse First Boston Corporation, Goldman, Sachs & Co. and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (together,
the "Agents"), to which this Administrative Procedure is attached as
Exhibit B. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented, or the applicable Indenture. As used in these
Administrative Procedures, the "Indenture" refers to the Indenture pursuant
to which the subject Offered Securities are issued and the "Trustee" refers
to the Trustee under such Indenture.
The procedures to be followed with respect to the settlement of
sales of Offered Securities directly by the Company to purchasers solicited
by an Agent, as agent, are set forth below. The terms and settlement
details related to a purchase of Offered Securities by an Agent, as
principal, from the Company will be set forth in a Terms Agreement pursuant
to the Distribution Agreement, unless the Company and such Agent otherwise
agree as provided in Section 3(b) of the Distribution Agreement, in which
case the procedures to be followed in respect of the settlement of such
sale will be as set forth below. An Agent, in relation to a purchase of an
Offered Security by a purchaser solicited by such Agent, is referred to
herein as the "Selling Agent" and, in relation to a purchase of an Offered
Security by such Agent as principal other than pursuant to a Terms
Agreement, as the "Purchasing Agent."
The Company will advise each Agent in writing of those persons
with whom such Agent is to communicate regarding offers to purchase Offered
Securities and the related settlement details.
Each Offered Security will be issued only in fully registered
form and will be represented by either a global security (a "Global
Security") delivered to the Trustee, as agent for The Depository Trust
Company (the "Depositary") and recorded in the book-entry system maintained
by the Depositary (a "Book-Entry Security") or a certificate issued in
definitive form (a "Certificated Security") delivered to a person
designated by an Agent, as set forth in the applicable Pricing Supplement.
An owner of a Book-Entry Security will not be entitled to receive a
certificate representing such a Security, except as provided in the
Indenture.
Certificated Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Book-Entry
Securities will be issued in accordance with the Administrative Procedure
set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED
SECURITIES
Posting Rates by Company:
The Company and the Agents will discuss from time to time the
rates of interest per annum to be borne by and the maturity of Certificated
Securities that may be sold as a result of the solicitation of offers by an
Agent. The Company may establish a fixed set of interest rates and
maturities for an offering period ("posting"). If the Company decides to
change already posted rates, it will promptly advise the Agents to suspend
solicitation of offers until the new posted rates have been established
with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or
other appropriate means of all reasonable offers to purchase Certificated
Securities, other than those rejected by such Agent. Each Agent may, in its
discretion reasonably exercised, reject any offer received by it in whole
or in part. Each Agent also may make offers to the Company to purchase
Certificated Securities as a Purchasing Agent. The Company will have the
sole right to accept offers to purchase Certificated Securities and may
reject any such offer in whole or in part.
The Company will promptly notify the Selling Agent or
Purchasing Agent, as the case may be, of its acceptance or rejection of an
offer to purchase Certificated Securities. If the Company accepts an offer
to purchase Certificated Securities, it will confirm such acceptance in
writing to the Selling Agent or Purchasing Agent, as the case may be, and
the Trustee.
Communication of Sale Information to
Company by Selling Agent:
After the acceptance of an offer by the Company, the Selling
Agent or Purchasing Agent, as the case may be, will communicate the
following details of the terms of such offer (the "Sale Information") to
the Company by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means:
(1) Principal amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and
the initial interest payment date;
(3) Maturity Date;
(4) Specified Currency and, if the Specified Currency is other
than U.S. dollars, the applicable Exchange Rate for such Specified Currency;
(5) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(8) Net proceeds to the Company;
(9) Settlement Date;
(10) If a redeemable Certificated Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall
decline (but not below par) on each anniversary of the Redemption
Commencement Date;
(11) If a Floating Rate Certificated Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates, and
(xi) Calculation Agent;
(12) Name, address and taxpayer identification number of the
registered owner(s);
(13) Denomination of certificates to be delivered at settlement;
and
(14) Name of the Trustee.
Preparation of Pricing Supplement by Company
If the Company accepts an offer to purchase a Certificated
Security, it will prepare a Pricing Supplement. The Company will supply at
least ten copies of such Pricing Supplement to the Selling Agent or
Purchasing Agent, as the case may be, not later 3:00 p.m., New York City
time, on the second business day following the date of acceptance of such
offer, or if the Company and the purchaser agree to settlement on the date
of such acceptance, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed with the
Commission not later than the close of business of the Commission on the
fifth business day following the date on which such Pricing Supplement is
first used.
Pricing Supplements will be delivered to the Selling Agent or
Purchasing Agent as follows:
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Attn: Short and Medium Term Finance
Telephone: (212) 325-7198
Telecopy: (212) 325-8183
Goldman, Sachs & Co
85 Broad Street
New York, New York 10004
Attn: Karen Robinson
MTN Desk Assistant
Telephone: (212) 902-8401
Telecopy: (212) 902-0658
Merrill Lynch & Co. - Tritech Services
4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
Attn: Final Prospectus Unit/Nachman Kimerling
Telephone: (908) 878-6525/26/27
Telecopy: (908) 878-6530
with a copy to:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center, North Tower
10th Floor
New York, NY 10281-1310
Attn: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a
Certificated Security a written confirmation of the sale and delivery and
payment instructions. In addition, the Selling Agent will deliver to such
Purchaser or its agent the Prospectus as amended or supplemented (including
the Pricing Supplement) in relation to such Certificated Security prior to
or together with the earlier of the delivery to such purchaser or its agent
of (a) the confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers solicited by a Selling Agent or made by a Purchasing
Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which is the third business day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on any other business day after the acceptance of such offer
or (b) with respect to an offer accepted by the Company prior to 10:00
a.m., New York City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such
Sale Information to the Trustee by facsimile transmission or other
acceptable written means.
The Company will instruct the Trustee by facsimile transmission
or other acceptable written means to authenticate and deliver the
Certificated Securities no later than 2:15 p.m., New York City time, on the
Settlement Date. Such instruction will be given by the Company prior to
3:00 p.m., New York City time, on the business day prior to the Settlement
Date unless the Settlement Date is the date of acceptance by the Company of
the offer to purchase Certificated Securities in which case such
instruction will be given by the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by
Trustee and Receipt of Payment Therefor:
The Trustee will prepare each Certificated Security and
appropriate receipts that will serve as the documentary control of the
transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by an Agent, the Trustee will, by 2:15 p.m., New York City time,
on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser or such Certificated Securities
against delivery by the Selling Agent of a receipt therefor. On the
Settlement Date the Selling Agent will deliver payment for such
Certificated Securities in immediately available funds to the Company in an
amount equal to the issue price of the Certificated Securities less the
Selling Agent's commission; provided that the Selling Agent reserves the
right to withhold payment for which it has not received funds from the
purchaser. The Company shall not use any proceeds advanced by a Selling
Agent to acquire securities.
In the case of a sale of Certificated Securities to a
Purchasing Agent, the Trustee will, by 2:15 p.m., New York City time, on
the Settlement Date, deliver the Certificated Securities to the Purchasing
Agent against delivery of payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue
price of the Certificated Securities less the Purchasing Agent's discount.
Certified Securities will be delivered to the Agents as
follows:
Credit Suisse First Boston Corporation
Five World Trade Center
New York, New York 10048
Attention: Joan Bryan
Telephone: (212) 322-5105
Telecopy: (212) 803-4096
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Attention: Jean Fitzgerald
Telephone: (212) 325-0550
Telecopy: (212) 325-8183
Goldman, Sachs & Co.
85 Broad Street, Sixth Floor
New York, New York 10004
Attention: Corporate Bond Operations
Telephone: (212) 902-8095
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Money Market Clearance - MTNs
One Liberty Plaza
165 Broadway, 4th Floor
New York, NY 10080
Attention: David Alavarces
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make
payment to the Selling Agent for a Certificated Security, the Selling Agent
will promptly notify the Trustee and the Company thereof by telephone
(confirmed in writing) or by facsimile transmission or other acceptable
written means. The Selling Agent will immediately return the Certificated
Security to the Trustee. Immediately upon receipt of such Certificated
Security by the Trustee, the Company will return to the Selling Agent an
amount equal to the amount previously paid to the Company in respect of
such Certificated Security. The Company will reimburse the Selling Agent on
an adequate basis for its loss of the use of funds during the period when
they were credited to the account of the Company.
The Trustee will cancel the Certificated Security in respect of
which the failure occurred, make appropriate entries in its records and,
unless otherwise instructed by the Company, destroy the Certificated
Security.
PART II: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY
SECURITIES
In connection with the qualification of the Book-Entry
Securities for eligibility in the book-entry system maintained by the
Depositary, the Trustee will perform the custodial, document control and
administrative functions described below, in accordance with its respective
obligations under a Letter of Representation from the Company and the
Trustee to the Depositary, dated the date hereof, and a Medium-Term Note
Certificate Agreement between the Trustee and the Depositary (the
"Certificate Agreement"), and its obligations as a participant in the
Depositary, including the Depositary's Same Day Funds Settlement System
("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the
rates of interest per annum to be borne by the maturity of Book-Entry
Securities that may be sold as a result of the solicitation of offers by an
Agent. The Company may establish a fixed set of interest rates and
maturities for an offering period ("posting"). If the Company decides to
change already posted rates, it will promptly advise the Agents to suspend
solicitation of offers until the new posted rates have been established
with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or
other appropriate means of all reasonable offers to purchase Offered
Securities, other than those rejected by such Agent. Each Agent may, in its
discretion reasonably exercised, reject any offer received by it in whole
or in part. Each Agent also may make offers to the Company to purchase
Book-Entry Securities as a Purchasing Agent. The Company will have the sole
right to accept offers to purchase Book-Entry Securities and may reject any
such offer in whole or in part.
The Company will promptly notify the Selling Agent or
Purchasing Agent, as the case may be, of its acceptance or rejection of an
offer to purchase Book-Entry Securities. If the Company accepts an offer to
purchase Book-Entry Securities, it will confirm such acceptance in writing
to the Selling Agent or Purchasing Agent, as the case may be, and the
Trustee.
Communication of Sale Information to the Company by
Selling Agent and Settlement Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent
or Purchasing Agent, as the case may be, will communicate promptly, but in
no event later than the time set forth under "Settlement Procedure
Timetable" below, the following details of the terms of such offer (the
"Sale Information") to the Company by telephone (confirmed in writing) or
by facsimile transmission or other acceptable written means:
(1) Principal amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and
the initial interest payment date;
(3) Maturity Date;
(4) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency (it being
understood that currently the Depositary accepts deposits of Global Securities
denominated in U.S. dollars only);
(5) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(8) Net Proceeds to the Company;
(9) Settlement Date;
(10) If a redeemable Book-Entry Security, such of the following
as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption Commencement
Date;
(11) If a Floating Rate Book-Entry Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates, and
(xi) Calculation Agent; and
(12) Name of the Trustee.
B. After receiving the Sale Information from the Selling Agent
or Purchasing Agent, the Company will communicate such Sale Information to
the Trustee by facsimile transmission or other acceptable written means.
The Company will assign a CUSIP number to the Global Security representing
such Book-Entry Security and then advise the Trustee and the Selling Agent
or Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following
settlement information to the Depositary, and the Depositary shall forward
such information to such Agent and Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such time);
(4) Number of the Participant account maintained by the
Depositary on behalf of the Selling Agent or Purchasing Agent, as the
case may be;
(5) The interest payment period;
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for the
Depositary's purposes (which, in the case of Floating Rate Offered
Securities which reset weekly shall be the date five calendar days
immediately preceding the applicable Interest Payment Date and in the
case of all other Book-Entry Securities shall be the Regular Record
Date, as defined in the Offered Security) and, if calculable at that
time, the amount of interest payable on such Interest Payment Date
per $1,000 principal amount.
D. The Trustee will complete and authenticate the Global
Security previously delivered by the Company representing such Book-Entry
Security.
E. The Depositary will credit such Book-Entry Security to the
Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i)
debit such Book-Entry Security to the Trustee's participant account and
credit such Book-Entry Security to such Agent's participant account and
(ii) debit such Agent's settlement account and credit the Trustee's
settlement account for an amount equal to the price of such Book-Entry
Security less such Agent's commission or discount, as applicable. The entry
of such a deliver order shall constitute a representation and warranty by
the Trustee to the Depositary that (a) the Global Security representing
such Book-Entry Security has been issued and authenticated and (b) the
Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary (i) to
debit such Book-Entry Security to such Agent's participant account and
credit such Book-Entry Security to the participant accounts of the
Participants with respect to such Book-Entry Security and (ii) to debit the
settlement accounts of such Participants and credit the settlement account
of such Agent for an amount equal to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will
transfer to an account of the Company previously specified by the Company
to the Trustee funds available for immediate use in the amount transferred
to the Trustee in accordance with Settlement Procedure "F."
J. Upon request, the Trustee will send to the Company a
statement setting forth the principal amount of Book-Entry Securities
outstanding as of that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry
Security to the purchaser either by transmitting to the Participants with
respect to such Book-Entry Security a confirmation order or orders through
the Depositary's institutional delivery system or by mailing a written
confirmation to such purchaser.
L. The Depositary will, at any time, upon request of the
Company or the Trustee, promptly furnish to the Company or the Trustee a
list of the names and addresses of the Participants for whom the Depositary
has credited Book- Entry Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry
Security, it will prepare a Pricing Supplement reflecting the terms of such
Book-Entry Security and arrange to have delivered to the Selling Agent or
Purchasing Agent, as the case may be, at least ten copies of such Pricing
Supplement, not later than 3:00 p.m., New York City time, on the second
Business Day following the receipt of the Sale Information, or if the
Company and the purchaser agree to settlement on the Business Day following
the date of acceptance, not later than noon, New York City time, on such
date. The Company will arrange to have ten Pricing Supplements filed with
the Commission not later than the close of business of the Commission on
the fifth Business Day following the date on which such Pricing Supplement
is first used.
Pricing Supplements will be delivered to the Selling Agent or
Purchasing Agent as follows:
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Attn: Short and Medium Term Finance
Telephone: (212) 325-7198
Telecopy: (212) 325-8183
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attn: Karen Robinson
MTN Desk Assistant
Telephone: (212) 902-8401
Telecopy: (212) 902-0658
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attn: Patricia O'Connell,
MTN Desk Assistant
Telephone: (212) 902-1482
Telecopy: (212) 902-0658
Merrill Lynch & Co. - Tritech Services
4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
Attn: Final Prospectus Unit/Nachman Kimerling
Telephone: (908) 878-6525/26/27
Telecopy: (908) 878-6530
with a copy to:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center, North Tower
23rd Floor
New York, NY 10281-1323
Attn: MTN Product Management
Telephone: (212) 449-7582
Telecopy: (212) 449-2234
Delivery of Confirmation and Prospectus
to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser
or its agent the Prospectus as amended or supplemented (including the
Pricing Supplement) in relation to such Book-Entry Security prior to or
together with the earlier of the delivery to such purchaser or its agent of
(a) the confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in
payment for a Book-Entry Security and the authentication and issuance of
the Global Security representing such Book-Entry Security shall constitute
"settlement" with respect to such Book-Entry Security. All orders accepted
by the Company will be settled on the third Business Day pursuant to the
timetable for settlement set forth below unless the Company and the
purchaser agree to settlement on another day which shall be no earlier than
the next Business Day.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by an Agent, as
agent, and accepted by the Company for settlement on the first Business Day
after the sale date, Settlement Procedures "A" through "I" set forth above
shall be completed as soon as possible but not later than the respective
times (New York City time) set forth below:
Settlement
Procedure Time
A 5:00 p.m. on the Business Day following the acceptance of an offer by
the Company or 10:00 a.m. on the Business Day prior to the
settlement date, whichever is earlier
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 9:00 a.m. on settlement date
E 10:00 a.m. on settlement date
F-G 2:00 p.m. on settlement date
H 4:45 p.m. on settlement date
I 5:00 p.m. on settlement date
If a sale is to be settled more than one Business Day after the
sale date, Settlement Procedures "B" and "C" shall be completed as soon as
practicable but not later than 2:00 p.m. on the first Business Day after
the sale date. If the initial interest rate for a Floating Rate Book-Entry
Security has not been determined at the time that Settlement Procedure "A"
is completed, Settlement Procedures "B" and "C" shall be completed as soon
as such rate has been determined but no later than 2:00 p.m. on the second
Business Day before the settlement date. Settlement Procedure "H" is
subject to extension in accordance with any extension of Fedwire closing
deadlines and in the other events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Security is rescheduled or
cancelled, the Trustee, upon obtaining knowledge thereof, will deliver to
the Depositary, through the Depositary's Participation Terminal System, a
cancellation message to such effect by no later than 2:00 p.m. on the
Business Day immediately preceding the scheduled settlement date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with
respect to a Book-Entry Security pursuant to Settlement Procedure "F", the
Trustee may deliver to the Depositary, through the Depositary's Participant
Terminal System, as soon as practicable a withdrawal message instructing
the Depositary to debit such Book-Entry Security to the Trustee's
participant account, provided that the Trustee's participant account
contains a principal amount of the Global Security representing such
Book-Entry Security that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with respect to all the
Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "cancelled", make appropriate entries in the
Trustee's records and send such cancelled Global Security to the Company.
The CUSIP number assigned to such Global Security shall, in accordance with
CUSIP Service Bureau procedures, be cancelled and not immediately
reassigned. If a withdrawal message is processed with respect to one or
more, but not all, of the Book-Entry Securities represented by a Global
Security, the Trustee will exchange such Global Security for two Global
Securities, one of which shall represent such Book-Entry Security or
Securities and shall be cancelled immediately after issuance and the other
of which shall represent the remaining Book-Entry Securities previously
represented by the surrendered Global Security and shall bear the CUSIP
number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely
paid to the Participants with respect to such Book-Entry Security by the
beneficial purchaser thereof (or a person, including an indirect
participant in the Depositary, acting on behalf of such purchaser), such
participants and, in turn, the Agent for such Book-Entry Security may enter
deliver orders through the Depositary's Participant Terminal System
debiting such Book-Entry Security to such participant's account and
crediting such Book-Entry Security to such Agent's account and then
debiting such Book-Entry Security to such Agent's participant account and
crediting such Book-Entry Security "free" to the Trustee's participant
account and shall notify the Company and the Trustee thereof. Thereafter,
the Trustee will (i) immediately notify the Company of such order and the
Company shall transfer to such Agent funds available for immediate use in
an amount equal to the price of such Book-Entry Security which was
transferred to the Company in accordance with Settlement Procedure I, and
(ii) deliver the withdrawal message and take the related actions described
in the preceding paragraph. If such failure shall have occurred for any
reason other than default by the applicable Agent to perform its
obligations hereunder or under the Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for the loss of its use of funds
during the period when the funds were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Security, the Depositary 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 Securities to have been represented by a Global Security, the
Trustee will provide, in accordance with Settlement Procedure "D" for the
authentication and issuance of a Global Security representing the other
Book-Entry Securities to have been represented by such Global Security and
will make appropriate entries in its records. The Company will, from time
to time, furnish the Trustee with a sufficient quantity of Offered
Securities.
EXHIBIT C
Restrictions on Sale of
Medium-Term Notes
No Offered Securities denominated in a currency other than
United States dollars will be sold or offered for sale in the country
issuing such currency.
