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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): November 4, 1997
TANDY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-5571 75-1047710
State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 THROCKMORTON STREET, SUITE 1800, FORT WORTH TEXAS 76102
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (817) 415-3700
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit
Number Description
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5.1 Legal opinion of Satterlee Stephens Burke & Burke LLP.
10.1 Form of Sales Agreement to be dated November 4, 1997 by and among
Tandy Corporation, Bear Stearns & Co. Inc., BancAmerica Robertson
Stephens, Citicorp Securities, Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Brothers Inc.
23.1 Consent of Satterlee Stephens Burke & Burke LLP (included in
opinion filed as Exhibit 5.1).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TANDY CORPORATION
(Registrant)
Date: November 5, 1997 By: /s/Dwain H. Hughes
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Dwain H. Hughes
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number Description
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5.1 Legal opinion of Satterlee Stephens Burke & Burke LLP.
10.1 Form of Sales Agreement to be dated November 4, 1997 by and among
Tandy Corporation, Bear Stearns & Co. Inc., BancAmerica Robertson
Stephens, Citicorp Securities, Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Brothers Inc.
23.1 Consent of Satterlee Stephens Burke & Burke LLP (included in
opinion filed as Exhibit 5.1).
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EXHIBIT 5.1
SATTERLEE STEPHENS BURKE & BURKE LLP
230 Park Avenue
New York, NY 10169
November 4, 1997
Tandy Corporation
100 Throckmorton Street,
Suite 1800
One Tandy Center
Fort Worth, TX 76102
Ladies and Gentlemen:
We have acted as counsel to Tandy Corporation, a Delaware corporation (the
"Company"), in connection with the proposed offering, from time to time, by the
Company of its debt securities having an aggregate initial public offering price
or purchase price of up to U.S. $300,000,000 or the equivalent in foreign or
composite currencies (the "Debt Securities") pursuant to a Registration
Statement on Form S-3 filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), (the Registration Statement
as amended as of the date hereof being herein referred to as the "Registration
Statement").
In connection therewith, we have examined and relied upon the original, or
copies certified to our satisfaction, of (i) the Certificate of Incorporation
and the Bylaws of the Company, as amended; (ii) minutes and records of the
corporation proceedings of the Company; (iii) the Registration Statement and
exhibits thereto; (iv) the Sales Agreement dated of even date herewith entered
into among the Company and Bear Stearns & Co., Inc., BancAmerica Robertson
Stephens, Citicorp Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc.; (v) the Indenture, dated as of May 1,
1997, entered into by and between the Company and The Chase Manhattan Bank, as
Trustee; and (vi) such other documents and instruments as we have deemed
necessary for the expression of the opinions contained herein.
In making the foregoing examinations, we have assumed the genuineness of
all signatures and the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photostatic copies. As to various questions of fact
material to this opinion and as to the content and form of the Certificate of
Incorporation, Bylaws, minutes, records, resolutions, and other documents or
writings of the Company, we have relied, to the extent we deem reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records, and
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instruments furnished to us by the Company, without independent check or
verification of their accuracy.
Based upon the foregoing, and having due regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. The Company is a corporation duly incorporated, existing, and in good
standing under the laws of the State of Delaware.
2. The Debt Securities proposed to be sold by the Company pursuant to the
Sales Agreement have been duly authorized for issuance and, subject to (i) a
supplement or amendment to the prospectus, forming a part of the Registration
Statement, specifying certain terms with respect to the offering of such Debt
Securities being filed or mailed for filing to the Securities and Exchange
Commission pursuant to Rule 424 under the Act, and (ii) compliance with any
applicable Blue Sky laws, when executed by the Company, authenticated by the
Trustee, and delivered and sold in accordance with the provisions of the Sales
Agreement, will be valid and legally binding obligations of the Company,
enforceable in accordance with the terms and entitled to the benefits of the
Indenture, except as may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, or similar laws now or
hereafter in effect affecting the rights of creditors generally.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference to us under "Legal Opinions" in the Prospectus forming a part of such
Registration Statement.
Very truly yours,
Satterlee Stephens Burke & Burke LLP
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EXHIBIT 10.1
U.S.$150,000,000
Tandy Corporation
Medium-Term Notes, Series B
Due Nine Months or More
from Date of Issue
SALES AGREEMENT
November 4, 1997
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
BancAmerica Robertson Stephens
231 South LaSalle Street
Chicago, Illinois 60697
Citicorp Securities, Inc.
399 Park Avenue
New York, New York 10043
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
World Financial Center
North Tower, 10rd Floor
New York, New York 10281-1310
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Tandy Corporation, a Delaware corporation (the "Company"), confirms
its agreement with each of you (individually, an "Agent", and collectively, the
"Agents") with respect to the issue and sale by the Company of up to the
aggregate principal amount set forth in Schedule I hereto of its Medium-Term
Notes, Series B, Due Nine Months or More from Date of Issue (the "Notes"). Notes
maturing in ten years or less will be designated on their face as "Notes" and
Notes maturing in over ten years will be designated on their face as
"Debentures". The Notes will be issued under an indenture dated as of May 1,
1997, between the Company and The Chase Manhattan Bank, as trustee (the
"Trustee") (such Indenture is hereinafter called the "Indenture"). The Notes
will be issued in minimum denominations of U.S. $1,000 and in denominations
exceeding such amount by integral multiples of U.S. $1,000 and if denominated in
a currency other than U.S. dollars, the equivalent in such other currency (the
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"Specified Currency") as determined in the Indenture, of U.S. $1,000 (rounded
down to an integral multiple of 1,000 units of such Specified Currency) and any
larger amount that is an integral multiple of 1,000 units of such Specified
Currency, will be issued only in fully registered form, and will be issued in
the currency or currency unit and will have the maturities, annual interest
rates (whether fixed or floating), redemption provisions and other terms set
forth in a pricing supplement to the Prospectus referred to below. The Notes
will be issued, and the terms thereof established, in accordance with the
Indenture and The Medium-Term Note Administrative Procedures attached hereto as
Exhibit A (the "Procedures"). The Procedures may only be amended by written
agreement of the Company and each Agent after notice to, and in the case of
amendments which affect the rights, duties or obligations of the Trustee, with
the approval of, the Trustee.
.
Representations and Warranties. The Company represents and warrants
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to, and agrees with, each Agent that:
(a) The Company meets the requirements for use of Form S-3 under the Securities
Act of 1933, as amended (the "Act"), and rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
and has filed with the Commission a registration statement on such Form
(the file number of which is set forth in Schedule I hereto), including a
basic prospectus, which has become effective for the registration under the
Act of the aggregate principal amount set forth in Schedule I hereto of
debt securities including the Notes (the "Securities"). Such registration
statement, as may be amended or supplemented, meets the requirements set
forth in Rule 415(a)(l)(x) and (a)(2) under the Act and complies in all
other material respects with said Rule. In connection with the sale of the
Notes the Company proposes to file with the Commission from time to time
pursuant to Rule 424 under the Act one or more supplements to the form of
prospectus included in such registration statement as amended relating to
the Notes and the plan of distribution thereof and has previously advised
(or prior to any such filing will advise) the Agents of all further
information (financial and other) with respect to the Company to be set
forth therein. Such registration statement, including the exhibits
thereto, as amended to the date of this Agreement, is hereinafter called
the "Registration Statement"; such prospectus, as supplemented pursuant to
the previous sentence, is hereinafter called the "Prospectus." Any
reference herein to the Registration Statement or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or
before the date of this Agreement or the date of the Prospectus, as the
case may be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus
shall be deemed to refer to and include the filing of any amendment under
the Exchange Act after the date of this Agreement or the date of the
Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(b) The Registration Statement and the Prospectus comply, and (in the case of
any amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the Commission
after the date as of which this representation is being made) will comply,
at all times during the effectiveness of this Agreement, in all material
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respects with the applicable requirements of the Act, the Exchange Act, the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the respective rules thereunder; the Indenture, including any amendments
and supplements thereto, pursuant to which the Notes will be issued, will
comply in all material respects with the requirements of the Trust
Indenture Act and the rules thereunder; and the Registration Statement and
the Prospectus do not, and (in the case of any amendment or supplement to
any such document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will not, at any time during the
effectiveness of this Agreement, include any untrue statement of material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
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Company makes no representation or warranty as to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the Trustee
or (ii) the information contained in or omitted from the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Agent expressly for use therein.
(c) The consolidated financial statements included or incorporated in the
Registration Statement and the Prospectus present, or (in the case of any
amendment or supplement to any such document, filed with the Commission
after the date as of which this representation is being made) will present
fairly at all times during the effectiveness of this Agreement, the
consolidated financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the results of their operations
for the periods specified, and have been, and (in the case of any amendment
or supplement to any such document, or any material incorporated by
reference in any such document, filed with the Commission after the date as
of which this representation is being made) will be at all times during the
effectiveness of this Agreement, prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, except as indicated therein; and the supporting schedules
included or incorporated in the Registration Statement present fairly the
information required to be stated therein; and if pro forma financial
statements are included in the Registration Statement and Prospectus, the
assumptions used in preparing the pro forma financial statements included
in the Registration Statement and the Prospectus provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(d) The documents incorporated by reference into the Prospectus complied, and
(in the case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will comply at all times during the effectiveness of this Agreement, in all
material respects, with the applicable requirements of the Act and the
Rules and Regulations and the Exchange Act and the rules and regulations of
the Commission thereunder, and, when read together and with the other
information in the Prospectus do not, and
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(in the case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will not, at any time during the effectiveness of this Agreement, include
any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; such documents have been, or (in the case of any amendment or
supplement to any such document, or any material incorporated by reference
in any document, filed with the Commission after the date as of which this
representation is being made) will be at all times during the effectiveness
of this Agreement, timely filed as required thereby.
(e) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, except as may otherwise be stated
therein or contemplated thereby, (i) there has been no material adverse
change in the condition (financial or other), earnings, results of
operations, business or properties of the Company and its subsidiaries,
considered as one enterprise, whether or not arising from transactions in
the ordinary course of business and (ii) there have been no material
transactions entered into by the Company or any of its subsidiaries other
than those in the ordinary course of business.
(f) The Company 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, lease and operate its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition (financial or other), earnings, results of
operations, business or properties of the Company and its subsidiaries,
considered as one enterprise.
(g) Each subsidiary of the Company which is a "significant subsidiary" as
defined in Section Rule 405 of Regulation C under the Act (each a
"Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and conduct its business as described
in the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the condition
(financial or other), earnings, results of operations, business or
properties of the Company and its subsidiaries, considered as one
enterprise, and all of the issued and outstanding capital stock of each
such Significant Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, except as described in the Prospectus
and except for directors' qualifying shares, is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
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(h) Neither the Company nor any of its Significant Subsidiaries is in violation
of its or any of their corporate charters or bylaws or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it or any of them is a
party or by which it or any of them or their properties may be bound; the
execution, delivery and performance of this Agreement, the applicable Terms
Agreement (as defined below) (including this Agreement as incorporated by
reference therein) and the Indenture, the filing of the Registration
Statement and the consummation of the transactions contemplated herein and
therein have been duly authorized by all necessary corporate action and
will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its Significant
Subsidiaries pursuant to, any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its Significant Subsidiaries is a party or by which it or any of them may
be bound or to which any of the property or assets of the Company or any of
its Significant Subsidiaries is subject, nor will such action result in a
violation of the provisions of the charter or bylaws of the Company or, to
the best of its knowledge, any law, administrative regulation or
administrative or court decree; and no consent, approval, authorization or
order of, or filing or registration with, any court or governmental
authority or agency is required for the consummation by the Company of the
transactions contemplated by this Agreement and the execution, delivery and
performance of this Agreement and the Indenture, except such as may be
required under the Act, the Rules and Regulations, the Trust Indenture Act,
the Exchange Act or applicable state securities or "blue sky" laws.
(i) The Company and its Significant Subsidiaries possess adequate certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, except such certificates, authorities or permits which
are not material to such conduct of their business, and neither the Company
nor any of its Significant Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would have a
material adverse effect on the condition (financial or other), earnings,
results of operations, business or properties of the Company and its
subsidiaries, considered as one enterprise. No consent, approval,
authorization or order of, or filing with, any person or governmental
agency or body of any court is required for the consummation of the
transactions contemplated by this Agreement in connection with the issuance
and sale of the Notes by the Company, except such as have been obtained and
made under the Act, the Rules and Regulations, the Trust Indenture Act and
the Exchange Act and such as may be required under state securities or
"blue sky" laws.
(j) Except as set forth in the Prospectus, there is no action, suit or
proceeding before or by any court or governmental agency or body, domestic
or foreign, now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries that might
result in any material adverse effect on the condition (financial or
other), earnings, results of operations, business or properties of the
Company and its subsidiaries, considered as one enterprise, or is required
to be disclosed in the Registration Statement or the
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Prospectus, or might materially and adversely affect the consummation of
this Agreement and the applicable Terms Agreement, and there are no
contracts or other documents of the Company or any of its subsidiaries
which are required to be filed as exhibits to the Registrant Statement by
the Act or by the Rules and Regulations or which were required to be filed
as exhibits to any document incorporated by reference in the Prospectus by
the Exchange Act or the rules and regulations of the Commission thereunder,
which have not been filed as exhibits to the Registration Statement or to
such document or incorporated therein by reference as permitted by the
Rules and Regulations or the rules and regulations of the Commission under
the Exchange Act as required.
(k) Price Waterhouse LLP, whose reports have been incorporated by reference or
included in the Company's most recent Annual Report on Form 10-K which is
incorporated by reference in the Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations.
(l) On the date of delivery by the Company of any Notes sold hereunder (a
"Closing Date") (i) the Indenture will have been duly and validly
authorized, executed and delivered by the Company and, assuming due
execution and delivery by the Trustee, will constitute a valid and binding
agreement of the Company, enforceable in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
fraudulent transfer, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and to
principles relating to the availability of equitable remedies to the extent
that adequate remedies at law may exist), and has been duly qualified under
the Trust Indenture Act; (ii) the Notes will have been duly authorized for
issuance and sale pursuant to this Agreement and the applicable Terms
Agreement and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the purchaser
thereof as provided in this Agreement, will constitute legal, valid and
binding obligations of the Company enforceable in accordance with their
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
fraudulent transfer, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and to
principles relating to the availability of equitable remedies to the extent
that adequate remedies at law may exist) and will be entitled to the
benefits of the Indenture, and (iii) the Indenture conforms and the Notes
will conform in all material respects to all statements relating thereto
contained in the Prospectus.
(m) The Company and its Significant Subsidiaries own, possess or license the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names and other rights or interests in
items of intellectual property as are necessary for the operation and
conduct of the businesses now operated by them (the "patent and proprietary
rights"), and neither the Company nor any of its Significant Subsidiaries
has received any notice of infringement of or conflict with asserted rights
of others with respect to any patent and proprietary rights which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition (financial
or other), earnings, results of operations, business or properties of the
Company and its subsidiaries, considered as one enterprise, and neither the
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Company nor any subsidiary is aware that any person or entity is infringing
or otherwise violating any of the Company's patents, trademarks,
servicemarks or copyrights in a manner that could materially affect the use
thereof by the Company or any of its subsidiaries.
(n) The Company has no knowledge of any impediment to the enforceability of any
of the patents owned by the Company or any of its subsidiaries that are
necessary for the operation of the business now operated by them or of any
materially relevant prior art references not cited during the prosecution
of any of such patents in the U.S. Patent and Trademark Office or
applicable foreign patent office.
(o) No labor disturbance by the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent which might be
expected to have a material adverse effect on the condition (financial or
other), earnings, results of operations, business or properties of the
Company and its subsidiaries, considered as one enterprise.
(p) The Company is not, and, after giving effect to the offering and sale of
the Notes and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended.
(q) Except as described in the Prospectus, the properties, assets and
operations of each of the Company and its subsidiaries are in material
compliance with all applicable federal, state, local and foreign laws
(including, without limitation, common law), rules and regulations, orders,
decrees, judgments, permits and licenses relating to worker health and
safety, and to the protection and clean-up of the natural environment and
to the protection or preservation of natural resources, including, without
limitation, those relating to the processing, manufacturing, generation,
handling, disposal, transportation or release of hazardous materials
(collectively, "Environmental Laws"). With respect to such properties,
assets and operations, there are no events, conditions, circumstances,
activities, practices, incidents, actions or plans of the Company or any of
its subsidiaries of which the Company is aware that may interfere with or
prevent compliance or continued compliance with applicable Environmental
Laws or otherwise result in liability to the Company or any of its
subsidiaries pursuant to applicable Environmental Laws in a manner that
could reasonably be expected to have a material adverse effect on the
condition (financial or other), earnings, results of operations, business
or properties of the Company and its subsidiaries, considered as one
enterprise. Except as described in the Prospectus (i) to the Company's
knowledge, none of the Company or any of its subsidiaries is the subject of
any federal, state, local or foreign investigation pursuant to
Environmental Laws, (ii) none of the Company or any of its subsidiaries has
received any written notice or claim pursuant to Environmental Laws and
(iii) there are no pending, or, to the knowledge of the Company, threatened
actions, suits or proceedings against the Company, any of its subsidiaries
or its properties, assets or operations, in connection with any
Environmental Laws, in each such case, which could reasonably be expected
to have a material adverse effect on the condition (financial or other),
earnings, results of operations, business or properties of the Company and
its subsidiaries, considered as one enterprise. The term "hazardous
materials" shall mean those substances that are regulated by or pursuant to
any applicable Environmental Laws.
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(r) This Agreement has been duly authorized, executed and delivered by the
Company and upon execution and delivery by the Agents, will be a valid and
binding agreement of the Company.
(s) The Company's authorized equity capitalization is as set forth in the
Prospectus.
(t) No holders of securities of the Company have rights to the registration of
such securities under the Registration Statement.
(u) Immediately after any sale of Notes by the Company hereunder or under any
Terms Agreement, the aggregate amount of Notes which shall have been issued
and sold by the Company hereunder or under any Terms Agreement and of any
debt securities of the Company (other than such Notes) that shall have been
issued and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration Statement.
Any certificate signed by any officer of the Company and delivered to
an Agent in connection with an offering of Notes shall be deemed a
representation and warranty by the Company, as to the matters covered thereby,
to such Agent.
. Appointment of Agents; Solicitations by the Agents of Offers to Purchase;
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Sales of Notes to a Purchaser. (a) Subject to the terms and conditions set
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forth herein, and to the reservation by the Company of the right to sell,
solicit and accept offers to purchase Notes directly on its own behalf, the
Company hereby authorizes each Agent to act as its agent to solicit offers for
the purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable best efforts to solicit offers to purchase
the Notes from the Company upon the terms and conditions set forth in the
Prospectus as amended or supplemented and in the Procedures.
In soliciting offers to purchase Notes hereunder, the Agents are
acting solely as agents for the Company, and not as principals. Each Agent
shall make reasonable efforts to assist the Company in obtaining performance by
any purchaser whose offer to purchase Notes 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. Under
no circumstances will any Agent be obligated to purchase any Notes for its own
account.
The Company reserves the right in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed.
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The Company agrees to pay each Agent a commission at the time of
settlement of each sale of Notes by the Company as a result of a solicitation
made by such Agent, in an amount equal to that percentage specified in Schedule
I hereto of the aggregate principal amount of the Notes sold by the Company and
such commission shall be payable as specified in the Procedures. An Agent's
commission shall be payable in the currency in which the related Note sold by
such Agent is denominated, except that, with respect to Notes denominated in a
currency other than United States dollars, such commission shall be payable in
such currency or in United States dollars, at the option of the Agent.
Subject to the provisions of this Section and to the Procedures,
offers for the purchase of Notes may be solicited by each Agent as agent for the
Company at such time and in such amounts as such Agent deems advisable;
provided, however, that so long as this Agreement shall be in effect the Company
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shall not solicit or accept offers to purchase Notes through any agents other
than the Agents.
Notwithstanding anything to the contrary contained herein, the Company
may authorize any other person, partnership or corporation (an "Additional
Agent") to act as its agent to solicit offers for the purchase of all or part of
the Notes of the Company upon thirty days prior notice to such Agents as are at
such time parties to this Agreement (subject to the provisions of Section 5(f)
hereof); provided, however, any Additional Agent shall execute this Agreement
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and become a party hereto and thereafter the term Agent as used in this
Agreement shall mean the Agents and such Additional Agent. At such time, the
Additional Agent shall specify its requirements for the delivery of
certificates, letters and opinions as are set forth in Section 5 hereof.
(b) Subject to the terms and conditions stated herein, the Company agrees that,
whenever the Company determines to sell Notes directly to any Agent as
principal for resale to others, it will enter into a separate agreement
relating to such sale in accordance with the provisions of this Section
2(b). For the purposes of this Agreement, the term "Agent" shall refer to
each of you acting solely in the capacity as agent for the Company
hereunder and not as principal; the term "Purchaser" shall refer to each of
you acting solely as principal hereunder and not as agent; and the term
"you" shall refer to each of you acting in both such capacities or in
either such capacity.
Each sale of Notes to a Purchaser shall be made in accordance with the
terms of this Agreement and the Procedures and a supplemental agreement which
will provide for the sale of such Notes to, and the purchase and reoffering
thereof by, a Purchaser. Each such supplemental agreement (which shall be
substantially in the form of Exhibit B hereto and which may take the form of an
exchange of any standard form of written telecommunication between a Purchaser
and the Company) is herein referred to as a "Terms Agreement." A Purchaser's
commitment to purchase Notes shall be deemed to have been made on the basis of
the representations and warranties of the Company herein set forth and shall be
subject to the terms and conditions set forth herein and in such Terms
Agreement. Each Terms Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto, specify the principal amount of such Notes, the
price to be paid to the Company for such Notes, the currency or
9
<PAGE>
currency unit in which such Notes shall be denominated, the rate at which
interest shall be paid on the Notes, whether such rate of interest shall be
fixed or floating, the date and time of delivery of payment for such Notes (the
"Purchase Date"), the place of delivery of the Notes and payment therefor, the
method of payment and any requirements for the delivery of the opinion of
counsel, the certificates from the Company or its officers or the letter from
Price Waterhouse LLP pursuant to Section 6(b). Such Terms Agreement shall also
specify the period of time referred to in Section 4(1).
Delivery of the certificates for Notes sold to a Purchaser pursuant to
any Terms Agreement shall be made as agreed to between the Company and the
Purchaser as set forth in the respective Terms Agreement, not later than the
Purchase Date set forth in such Terms Agreement, against payment of funds to the
Company in the net amount due to the Company for such Notes by the method and in
the form set forth in the respective Terms Agreement; provided, however, that if
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the related Terms Agreement does not specify the method and form for such
payment of funds, the settlement details specified in the Procedures shall apply
to such payment.
3. Offering Procedure. (a) Unless otherwise agreed between the Company and
------------------
each Agent, each Agent shall communicate to the Company, orally or in writing,
each offer to purchase Notes received by such Agent (unless such offer is
rejected by such Agent in accordance herewith) on terms previously communicated
by the Company to such Agent, and unless otherwise agreed between the Company
and each Agent, the Company shall have the sole right to accept such offers to
purchase Notes and may refuse any proposed purchase of Notes in whole or in part
for any reason.
(b) Unless otherwise agreed between the Company and each Agent, each Agent
shall have the right, in its discretion reasonably exercised, to reject any
proposed purchase of Notes, as a whole or in part, and any such rejection
shall not be deemed a breach of its agreement contained herein. Each Agent
and the Company agree to perform the respective duties and obligations
specifically provided to be performed by them in the Procedures, as amended
from time to time. The Procedures may only be amended by written agreement
of the Company and the Agents.
4. Agreements. The Company agrees with each Agent that:
----------
(a) Prior to the termination of the offering of the Notes, the Company will not
file any amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished to such Agent a copy for its
review prior to filing and will not file any such proposed amendment or
supplement to which such Agent may reasonably object. Subject to the
foregoing sentence, the Company will cause each supplement to the
Prospectus to be filed with the Commission as required pursuant to Rule
424. The Company will promptly advise such Agent (i) when each supplement
to the Prospectus shall have been filed with the Commission pursuant to
Rule 424, (ii) when any amendment of the Registration Statement shall have
become effective, (iii) of any request by the Commission for any amendment
of the Registration Statement or amendment of or supplement to the
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
10
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Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Notes for sale
in any jurisdiction or the initiation or threatening of any proceedings for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is required to be
delivered under the Act, any event occurs or a condition exists as a result
of which, in the reasonable opinion of counsel for the Agents or counsel
for the Company, the Registration Statement, as then amended, or the
Prospectus, as then supplemented, would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or would not reflect any facts or events which,
individually or in the aggregate, would represent a fundamental change in
the information set forth in the Registration Statement or the Prospectus,
or if, in the reasonable opinion of either such counsel, it shall be
necessary to amend the Registration Statement or to supplement the
Prospectus to comply with the requirements of the Act or the Exchange Act
or the respective rules thereunder, the Company promptly will (i) notify
such Agent to suspend the solicitation of offers to purchase Notes or sales
of Notes, as the case may be (and, if so notified by the Company, such
Agent shall forthwith suspend such solicitation or sales and cease using
the Prospectus as then amended or supplemented), (ii) prepare and file with
the Commission, subject to the first sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct such untrue
statement or omission or an amendment or supplement which will effect such
compliance and (iii) will supply any such amended or supplemented
Prospectus to such Agent in such quantities as such Agent may reasonably
request. If such amendment or supplement, and any documents, certificates
and opinions furnished to such Agent pursuant to paragraph (f) of this
Section 4 in connection with the preparation or filing of such amendment or
supplement are satisfactory in all respects to such Agent, such Agent will,
upon the filing of such amendment or supplement with the Commission and
upon the effectiveness of an amendment to the Registration Statement if
such an amendment is required, resume such Agent's obligation to solicit
offers to purchase Notes hereunder.
(c) As soon as practicable, the Company will make generally available to its
security holders and to such Agent an earnings statement or statements of
the Company and its subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to such Agent and to its counsel, without charge,
as many signed and conformed copies of the Registration Statement (as
originally filed), any documents incorporated by reference therein and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated by reference in the
Prospectus) as such Agent may reasonably request and will also deliver to
such Agent a conformed copy of the Registration Statement, any documents
incorporated by reference therein and each amendment thereto for each
Agent. So long as delivery of a prospectus may be required by the Act, the
Company will deliver to such Agent as many copies of any preliminary
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<PAGE>
prospectus and the Prospectus and any amendments thereof and supplements
thereto as such Agent may reasonably request.
(e) The Company will arrange for the qualification of the Notes for sale under
the laws of such jurisdictions as such Agent, after consultation with the
Company, may designate, will maintain such qualifications in effect so long
as required for the distribution of the Notes, and will arrange for the
determination of the legality of the Notes for purchase by institutional
investors.
(f) The Company shall furnish to such Agent and counsel for such Agent, such
documents and 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, any preliminary prospectus, the
Prospectus, and any amendments or supplements thereto, the Indenture, the
Notes, this Agreement, the Procedures and the performance by the Company
and such Agent of its respective obligations hereunder and thereunder as
such Agent may from time to time and at any time prior to the termination
of this Agreement reasonably request.
(g) The Company shall, whether or not any sale of the Notes is consummated, (i)
pay all expenses incident to the performance of its obligations under this
Agreement and any Terms Agreement, including, without limitation, the fees
and disbursements of its accountants and counsel, the fees and
disbursements of special counsel (including foreign counsel) to the
Company, if any, the cost of printing and delivery of the Registration
Statement, the Prospectus, all amendments thereof and supplements thereto,
the Indenture, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the
Notes, the fees and disbursements (including fees of counsel) incurred in
connection with the qualification of the Notes for sale and determination
of eligibility for investment of the Notes under the securities or Blue Sky
laws of each such jurisdiction as such Agent may reasonably designate, the
fees and disbursements of the Trustee, the fees of any agency that rates
the Notes and the fees and expenses in connection with any listing of the
Notes on any securities exchange (including the fees and expenses of any
brokers and listing agents in connection therewith), (ii) reimburse such
Agent for all out-of-pocket expenses (including, without limitation,
advertising expenses) incurred heretofore and hereafter by such Agent and
approved by the Company in advance, in connection with the offering,
purchase and sale of the Notes, and (iii) be responsible for the reasonable
fees and disbursements of such Agent's counsel incurred heretofore or
hereafter in connection with the offering and sale of the Notes. Any such
out-of-pocket expense in clause (ii) above or fees and disbursements in
clause (iii) above shall be payable within 30 days of receipt by the
Company from such Agent of a statement therefor.
(h) Each acceptance by the Company of an offer to purchase Notes will be deemed
to be a representation and warranty to such Agent that neither the
Registration Statement nor the Prospectus, as then amended or supplemented,
fails to reflect any facts or events which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement or the Prospectus, as then amended or
supplemented, or includes any untrue statement of a material fact, or omits
to state any material fact necessary to make the
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<PAGE>
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the foregoing does not apply to (i) that
part of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
the Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Agent
specifically for use in connection with the preparation of the Registration
Statement and the Prospectus or any amendments thereof or supplements
thereto.
(i) Each time that the Registration Statement or the Prospectus is amended or
supplemented (other than by an amendment or supplement providing solely for
the specification of or a change in the interest rates (excluding any
change in the formula by which such interest rates may be determined)
offered on any Notes), the Company will deliver or cause to be delivered
forthwith to such Agent a certificate of the Company signed by the
President or any Vice President and the principal financial or accounting
officer or the Treasurer of the Company, dated the date of the
effectiveness of such amendment or the date of filing of such supplement,
in form reasonably satisfactory to such Agent, to the effect that the
statements contained in the certificate that was last furnished to such
Agent pursuant to either Section 5(d) or this Section 4(i) 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 (except that (i) the
last day of the fiscal quarter for which financial statements of the
Company were last filed with the Commission shall be substituted for the
corresponding date in such certificate and (ii) such statements shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of the effectiveness of such amendment
or the filing of such supplement) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section
5(d) but modified to relate to the last day of the fiscal quarter for which
financial statements of the Company were last filed with the Commission and
to the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or the
filing of such supplement.
(j) Each time that the Registration Statement or the Prospectus is amended or
supplemented (other than by an amendment or supplement (i) providing solely
for the specification of or change in the interest rates (excluding any
change in the formula by which such interest rates may be determined)
offered on any Notes or (ii) setting forth or incorporating by reference
financial statements or other information as of and for a fiscal quarter of
such a nature that in such Agent's reasonable judgment an opinion of
counsel need not be furnished), the Company shall furnish or cause to be
furnished forthwith to such Agent the written opinion of counsel of the
Company satisfactory to such Agent, dated the date of the effectiveness of
such amendment or the filing of such supplement, and shall be of the same
tenor as the opinion referred to in Section 5(b), but modified to relate to
the Registration Statement and the Prospectus as amended and supplemented
to the time of effectiveness of such amendment or the filing of such
supplement. In lieu of such opinion, counsel last furnishing such an
opinion to such Agent may furnish a letter to the effect that such Agent
rely on such last opinion to the same extent as though it were dated the
date of such letter authorizing reliance (except that statements in such
13
<PAGE>
last opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of the effectiveness of
such amendment or the filing of such supplement).
(k) Each time that the Registration Statement or the Prospectus is amended or
supplemented to set forth amended or supplemental financial information
(including the filing of any document incorporated by reference in the
Registration Statement or the Prospectus), the Company shall cause Price
Waterhouse LLP, its independent public accountants, forthwith to furnish
such Agent a letter, dated the date of the effectiveness of such amendment
or the date of filing of such supplement, in form satisfactory to such
Agent, of the same tenor as the letter referred to in Section 5(e) with
such changes as may be necessary to reflect the amended and supplemental
financial information included or incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented to
the date of such letter; provided, that if the Registration Statement or
--------
the Prospectus is amended or supplemented solely to include or incorporate
by reference financial information as of and for a fiscal quarter, Price
Waterhouse LLP may limit the scope of such letter, which shall be
satisfactory in form to such Agent, to the unaudited financial statements
included in such amendment or supplement unless any other information
included or incorporated by reference therein of an accounting, financial
or statistical nature is of such a nature that, in such Agent's reasonable
judgment, such letter should cover such other information.
(l) During the period, if any, specified in any Terms Agreement, the Company
shall not, without the prior consent of the Purchaser, issue or announce
the proposed issuance in the United States of (i) in the case of a Terms
Agreement relating to Notes with a maturity of ten years or less, any
securities having a maturity of less than twenty years; (ii) in the case of
a Terms Agreement relating to Notes having a maturity of greater than ten
years, any securities having a maturity of greater than five years; and
(iii) in the case of a Terms Agreement relating to Notes denominated in a
currency other than U.S. dollars, securities denominated in the same
currency or currency unit as specified in the applicable Terms Agreement.
(m) Prior to the termination of this Agreement, the Company will (i) comply, in
a timely manner, with all applicable requirements under the Exchange Act
relating to the filing with the Commission of the Company's reports
pursuant to Sections 13 and 15(d) of the Exchange Act and of the Company's
proxy statements pursuant to Section 14 of the Exchange Act and (ii)
undertake to obtain the written consent of the Company's independent
accountants as to the inclusion or incorporation by reference in the
Registration Statement and the Prospectus of the audited financial
statements reported on by them.
(n) Prior to the termination of this Agreement, concurrently with the written
public release by the Company of any information concerning the results of
operations of the Company for any quarterly or other interim period or for
its fiscal year, the Company will deliver to each of the Agents copies of
such release.
5. Conditions to the Obligations of the Agents. The obligations of any Agent to
-------------------------------------------
solicit offers to purchase the Notes shall be subject to the accuracy of the
representations and
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warranties on the part of the Company contained herein as of the date hereof, as
of the date of the effectiveness of any amendment to the Registration Statement
(including the filing of any document by reference therein), as of the date any
supplement to the Prospectus is filed with the Commission and as of each Closing
Date, to the accuracy of the statements of the Company's officers made in any
certificates 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 each of the following additional
conditions precedent:
(a) (i) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened, and
(ii) there shall not have come to the attention of an Agent any facts that
would cause such Agent reasonably to believe that the Prospectus, at the
time it was required to be delivered to a purchaser of the Notes, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The Company shall have furnished to such Agent:
(i) The favorable opinion, dated as of the date hereof, Satterlee,
Stephens, Burke & Burke LLP, counsel of the Company, in form and
substance satisfactory to the Agent, to the effect that:
(1) the Company and each of its Significant Subsidiaries has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority
to own its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business and
where failure to so qualify might impair title to any of its
material properties or any right to enforce its material
contracts against others;
(2) all outstanding shares of capital stock of the Company and each
of its Significant Subsidiaries has been duly and validly
authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus, all outstanding
shares of capital stock of the Significant Subsidiaries are owned
by the Company either directly or through wholly-owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(3) the Company's authorized equity capitalization is as set forth in
the Prospectus; and the Indenture and the Notes will conform in
all material respects to the descriptions thereof in the
Prospectus;
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<PAGE>
(4) the Indenture has been duly authorized, executed and delivered,
has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, fraudulent
transfer, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect
and to principles relating to the availability of equitable
remedies to the extent that adequate remedies at law may not
exist); and the Notes are in the form contemplated by the
provisions of the Indenture, have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the purchasers
thereof, will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms (subject, as to
enforcement of remedies, to applicable bankruptcy, fraudulent
transfer, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect
and to principles relating to the availability of equitable
remedies to the extent that adequate remedies at law may not
exist);
(5) to the best knowledge of such counsel after reasonable inquiry,
(a) there is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or any
arbitrator involving the Company, its Significant Subsidiaries or
any of the Company's other subsidiaries, of a character required
to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and (b) there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to
be filed as an exhibit, which is not described or filed as
required; and the statements included or incorporated in the
Prospectus describing any legal proceedings or material contracts
or agreements relating to the Company fairly summarize such
matters;
(6) the Registration Statement and any amendments thereto have become
effective under the Act; to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement, as amended, has been issued, and no proceedings for
that purpose have been instituted or threatened; the Registration
Statement, the Prospectus, each document incorporated by reference
into the Registration Statement and the Prospectus and each
amendment thereof or supplement thereto as of their respective
effective or issue dates (other than the financial statements and
other financial and statistical information contained therein as
to which such counsel need express no opinion) complied as to form
in all material respects with the applicable requirements of the
Act, the Rules and Regulations, the Exchange Act, the Trust
Indenture Act and the respective rules and regulations thereunder;
and such counsel has no reason to believe that the Registration
Statement, or any amendment thereof, at the time such became
effective and on the date of this Agreement contained any untrue
statement of a material fact or omitted to state any material fact
required to be
16
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stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as amended or supplemented,
includes any untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(7) this Agreement and the Terms Agreement (if applicable) have been
duly authorized, executed and delivered by the Company;
(8) no consent, approval, authorization or order of any court or
governmental agency or body is required to be obtained by the
Company for the consummation of the transactions contemplated
herein, except such as have been obtained under the Act and such
as may be required under the "blue sky" laws of any jurisdiction
in connection with the purchase and distribution of the Notes by
such Agent as contemplated by this Agreement and such other
approvals (specified in such opinion) as have been obtained;
(9) neither the execution and delivery of the Indenture, the issue and
sale of the Notes, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach of, or constitute a
default under, the charter or by-laws of the Company or the terms
of any indenture or other agreement or instrument known to such
counsel and to which the Company, any Significant Subsidiary or
any of the Company's other subsidiaries is a party or may be
bound, or any order or regulations known to such counsel to be
applicable to the Company, any Significant Subsidiary or any of
the Company's other subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company, any Significant Subsidiary or any
of the Company's other subsidiaries; and
(10) to the best knowledge of such counsel, no holders of securities of
the Company have rights to the registration of such securities
under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Delaware or the United States, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing believed to be
reliable and who are satisfactory to counsel for the Agents and (B) as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and of public officials. In addition, such opinion may
state that, as to the qualification and good standing of Significant
Subsidiaries in jurisdictions other than those in which they are incorporated,
as to all matters set forth in paragraph (2) above and as to matters set forth
in paragraph (9) above relating to the Company's other subsidiaries, such
counsel has relied, with the permission of the Agents, solely upon an opinion
thereon of John Clarson, Esq., Staff Attorney of the Company.
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(ii) The favorable opinion, dated as of the date hereof, of John Clarson,
Esq., Staff Attorney, of the Company, in form and substance
satisfactory to the Agent, to the effect that:
(1) the Company and each of its Significant Subsidiaries has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority
to own its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business and
where failure to so qualify might impair title to any of its
material properties or any right to enforce its material
contracts against others;
(2) all outstanding shares of capital stock of the Company and each
of its Significant Subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus, all outstanding
shares of capital stock of the Significant Subsidiaries are owned
by the Company either directly or through wholly-owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such person, after due inquiry, any
other security interests, claims, liens or encumbrances; and
(3) neither the execution and delivery of the Indenture, the issue
and sale of the Notes, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach of, or constitute a
default under, the charter or by-laws of the Company or the terms
of any indenture or other agreement or instrument known to such
person and to which the Company, any Significant Subsidiary or
any of the Company's other subsidiaries is a party or may be
bound, or any order or regulations known to such person to be
applicable to the Company, any Significant Subsidiary or any of
the Company's other subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company, any Significant Subsidiary or any
of the Company's other subsidiaries.
References to the Registration Statement and the Prospectus in this
paragraph (b) are to such documents as amended and supplemented at the date of
the relevant opinion.
(c) Such Agent shall have received from Cleary, Gottlieb, Steen & Hamilton,
counsel for the Agents, such favorable opinion or opinions and letter,
dated the date hereof, with respect to the issuance and sale of the Notes,
the Indenture, the Registration Statement, the Prospectus and other related
matters as such Agent may reasonably require, and the Company shall have
furnished to such counsel such documents as they may reasonably request for
the purpose of enabling them to pass upon such matters.
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(d) The Company shall have furnished to such Agent a certificate of the
Company, signed by the Chairman of the Board, the Chief Executive Officer
or the President and the principal financial or accounting officer of the
Company, dated the date hereof, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement
are true and correct in all material respects on and as of the date
hereof with the same effect as if made on the date hereof and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied as a condition to
the obligation of the Agent to solicit offers to purchase the Notes;
(ii) 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 Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included or
incorporated in the Prospectus, there has been no material adverse
change in the condition (financial or other), earnings, results of
operations, business or properties of the Company and its
subsidiaries, considered as one enterprise, whether or nor arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus.
(e) On the date hereof, Price Waterhouse LLP or other independent certified
accountant acceptable to the Agent shall have furnished to such Agent a
letter or letters (which may refer to letters previously delivered to such
Agent), dated as of the date hereof in form and substance satisfactory to
such Agent, confirming that they are independent accountants within the
meaning of the Act, the Rules and Regulations, the Exchange Act and the
applicable published rules and regulations thereunder and stating in effect
that:
(i) in their opinion, the audited consolidated financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Act, the Rules and Regulations, the
Exchange Act and the related published rules and regulations.
(ii) they have performed the procedures specified by the American Institute
of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71,
Interim Financial Information, on any unaudited financial statements
included in the Registration Statement;
(iii) on the basis of a reading of the latest unaudited financial statements
made available by the Company and its subsidiaries; carrying out
certain procedures specified by such Agent and performed by Price
Waterhouse LLP (but not an examination in accordance with generally
accepted auditing standards), which would not necessarily reveal
matters of significance with respect to the comments set forth in such
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letter; a reading of the minutes of the meetings of the stockholders,
directors and executive committee of the Company and the Significant
Subsidiaries; and inquiries of certain officials and other employees
of the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to the date of the most recent audited financial
statements included or incorporated in the Prospectus, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial data included or incorporated in the
Registration Statement and the Prospectus do not comply as to
form in all material respects with applicable accounting
requirements and with the published rules and regulations of the
Commission with respect to financial data included or
incorporated in quarterly reports on Form 10-Q under the Exchange
Act; or said unaudited consolidated financial data are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
consolidated financial statements included or incorporated in the
Registration Statement and the Prospectus;
(2) (a) at the date of the latest available interim financial data,
there have been any changes in the capital stock (including
preferred stock, common stock and paid-in-capital, but excluding
common stock held in treasury) or any increases in the
consolidated long-term debt of the Company and its consolidated
subsidiaries as compared with the amounts shown on the latest
available consolidated balance sheet included or incorporated in
the Registration Statement or the Prospectus, except in each case
for increases or decreases which the Registration Statement or
the Prospectus discloses have occurred or will occur and (b) at a
date specified not more than five business days prior to the date
of the letter, there have been any changes in excess of
$5,000,000 in the capital stock (including preferred stock,
common stock and paid-in-capital, but excluding common stock held
in treasury), or any increases in excess of $5,000,000 in the
consolidated long-term debt, of the Company and its consolidated
subsidiaries as compared with the amounts shown on the latest
available consolidated balance sheet, except in each case for
increases or decreases which the Registration Statement or the
Prospectus discloses have occurred or will occur and (c) for the
period ended on the date of the latest available interim
financial data, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated net
sales and, to the extent available, in consolidated net operating
income or net revenues, in total or per share amounts of net
income available to common shareholders or in the ratio of
earnings to fixed charges of the Company and its consolidated
subsidiaries, except in each case for decreases which the
Registration Statement or the Prospectus discloses have occurred
or will occur;
(3) for the period from the date of the latest available financial
statements to a specified date not more than five business days
prior to the date of the letter, there were any decreases, as
compared with the corresponding period in
20
<PAGE>
the preceding year, in consolidated net sales, net operating
income or net revenues, in total or per share amounts of net
income available to common shareholders or in the ratio of
earnings to fixed charges of the Company and its consolidated
subsidiaries, except for decreases which the Registration
Statement or the Prospectus discloses have occurred or will
occur; or
(4) the amounts included in any unaudited "capsule" information
included or incorporated in the Registration Statement and the
Prospectus do not agree with the amounts set forth in the
unaudited financial statements for the same periods or were not
determined on a basis substantially consistent with that of the
corresponding amounts in the audited financial statements
included or incorporated in the Registration Statement and the
Prospectus; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other information of an
accounting, financial or statistical nature contained or
incorporated by reference in the Registration Statement and the
Prospectus and the exhibits thereto (in each case to the extent
that such dollar amounts, percentages and other financial
information are derived from the general accounting records of
the Company and its subsidiaries subject to the internal controls
of the Company's accounting system or are derived directly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
(v) if pro forma financial statements are included or incorporated in
the Registration Statement or the Prospectus, on the basis of a
reading of the unaudited pro forma financial statements, carrying
out certain specified procedures, inquiries of certain officials
of the Company and the acquired company who have responsibility
for financial and accounting matters, and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the pro
forma financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule 11-
02 of Regulation S-X or that the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of such statements.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at the date of
the letter.
(f) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus (as amended or supplemented, in
the case of a Terms Agreement) there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (e) of
this Section 5 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company, any Significant Subsidiary and any of the Company's other
subsidiaries the effect of which, in any case referred
21
<PAGE>
to in clause (i) or (ii) above, makes it, in the judgment of such Agent,
impractical or inadvisable to proceed with the soliciting of offers to
purchase the Notes as contemplated by the Registration Statement and the
Prospectus.
(g) Subsequent to the execution of this Agreement, (i) there shall not have
been any decrease in the ratings of any of the Company's debt securities by
any "nationally recognized statistical rating organization" (as defined for
purpose of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change and
(ii) the Company's debt securities shall be rated as investment grade debt
by Moody's Investors Service Inc., Standard & Poor's Rating Services, a
division of the McGraw-Hill Companies, Inc., or Duff and Phelps.
(h) Prior to the date hereof, the Company shall have furnished to such Agent
such further information, certificates and documents as such Agent may
reasonably request from time to time.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agent and its counsel, this Agreement and all obligations
of such Agent hereunder may be canceled at any time by such Agent. Notice of
such cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered pursuant to this Section 5
shall be delivered at the office of Cleary, Gottlieb, Steen & Hamilton, counsel
for the Agents, at One Liberty Plaza, New York, New York 10006, on the date
hereof.
6. Conditions to the Obligations of a Purchaser. The obligations of a
--------------------------------------------
Purchaser to purchase Notes pursuant to any Terms Agreement will be subject to
the accuracy of the representations and warranties on the part of the Company
herein as of the date of the respective Terms Agreement and as of the Purchase
Date thereunder, to the performance and observance by the Company of all
covenants and agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) Except to the extent modified by the respective Terms Agreement, the
Purchaser shall have received, appropriately updated in a manner
consistent with Section 5 hereof, (i) a certificate of the Company,
dated as of the Purchase Date, to the effect set forth in Section 5(d),
(ii) an opinion of Satterlee, Stephens, Burke & Burke LLP, counsel for
the Company, and the opinion of a staff attorney of the Company, dated
as of the Purchase Date, to the effect set forth in Section 5(b)(i) and
Section 5(b)(ii),
22
<PAGE>
respectively, (iii) an opinion and letter of Cleary, Gottlieb, Steen &
Hamilton, counsel for the Purchaser, dated as of the Purchase Date, to
the effect set forth in Section 5(c) and (iv) a letter of Price
Waterhouse LLP, dated as of the Purchase Date, to the effect set forth
in Section 5(e).
(c) The conditions set forth in Section 5(f) shall have been satisfied; it
being understood that references therein to an Agent or Agents shall be
deemed to refer to a Purchaser or Purchasers, as the case may be.
(d) Prior to the Purchase Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the
Purchaser may reasonably request.
(e) Subsequent to the execution of any Terms Agreement, there shall not
have been any decrease in the ratings of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purpose of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
or the relevant Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or the relevant Terms Agreement
shall not be in all material respects reasonably satisfactory in form and
substance to the Purchaser and its counsel, this Agreement and all obligations
of the Purchaser hereunder may be canceled at, or at any time prior to, the
respective Purchase Date by the Purchaser. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
7. Reimbursement of the Agent's Expenses. If any condition to the obligations
-------------------------------------
of any Agent set forth in Section 5 hereof is not satisfied, if any condition to
the obligations of a Purchaser set forth in Section 6 hereof is not satisfied,
if any termination pursuant to Section 9 hereof shall occur or in the case of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by such Agent, the Company shall reimburse such Agent upon demand for
all expenses that shall have been incurred by such Agent pursuant to Section
4(g) hereof in connection with this Agreement.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and
--------------------------------
hold harmless each Agent and each person, if any, who controls such Agent within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which such Agent or any of them may become subject under the Act, the Exchange
23
<PAGE>
Act or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Notes, as originally filed or
in any amendment thereof, or any related preliminary Prospectus or in the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Company will not be liable in any
-------- -------
such case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Agent expressly for use therein. The
Company acknowledges that the statements set forth in the first two sentences of
the last paragraph of the cover page, the stabilization legend in block capital
letters on page S-2 and the paragraph related to stabilization under the heading
"Supplemental Plan of Distribution" in any supplement to the Prospectus
constitute the only information furnished in writing by or on behalf of such
Agent for inclusion in the documents referred to in the foregoing indemnity, and
you confirm that such statements are correct. This indemnity agreement will be
in addition to any liability which the Company may otherwise have, including
under this Agreement.
(b) Each Agent severally, and not jointly, agrees to indemnify and hold
harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement,
and each other person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against any
and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation),
joint or several, to which such Agent or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for
the registration of the Notes, as originally filed or in any amendment
thereof, or any related preliminary Prospectus or in the Prospectus, or in
any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of such Agent expressly for use therein. The Company acknowledges
that the statements set forth in the first two sentences of the last
paragraph of the cover page, the stabilization legend in block capital
letters on page S-2 and the paragraph related to stabilization under the
heading "Supplemental Plan of Distribution" in any supplement to the
Prospectus constitute the only information furnished in writing by or on
behalf of such Agent for inclusion in the documents referred to in the
foregoing indemnity, and you
24
<PAGE>
confirm that such statements are correct. This indemnity will be in
addition to any liability which such Agent may otherwise have, including
under this Agreement.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the
commencement thereof (but the failure so to notify an indemnifying party
shall not relieve it from any liability which it may have under this
Section 8). 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 elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by one of the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action,
or (iii) such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different from
or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying parties shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties),
in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld. No
-------- -------
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act,
by or on behalf of any indemnified party.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in this Section 8 is for any reason held to be
unavailable from any indemnifying party or is insufficient to hold harmless
a party indemnified under subsection (a) or (b) above, the Company and each
Agent shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered by the Company
any contribution received by the Company from persons, other than the
Agents, who may also be liable for contributions, including persons who
control the Company within the
25
<PAGE>
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
officers of the Company who signed the Registration Statement and directors
of the Company) as incurred to which the Company and one or more of the
Agents may be subject, in such proportions as is appropriate to reflect the
relative benefits received by the Company and each Agent from the offering
of the Notes or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in subsection (c) above, in such
proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and each Agent
in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and each Agent shall be deemed to be in the same proportion as (x)
the total proceeds from the offering (net of Agents' discounts and
commissions but before deducting expenses) received by the Company and (y)
the total discounts and commissions received by each Agent, respectively,
in each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company and of each Agent shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or any Agent
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company
and each Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Agents were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d).
Notwithstanding the provisions of this subsection (d), (i) in no case shall
any Agent be liable or responsible for any amount in excess of the agent
discount applicable to the securities purchased by such Agent hereunder,
and (ii) 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.
Notwithstanding the provisions of this subsection (d) and the preceding
sentence, no Agent shall be required to contribute any amount in excess of
the amount by which the total price at which the Notes sold by it exceeds
the amount of any damages that such Agent has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. For purposes of this subsection (d), each person, if any,
who controls an Agent within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Agent, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i)
and (ii) of this subsection (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution
may be made against another party or parties, notify each party or parties
from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under
this subsection (d) or otherwise. No party shall be liable for contribution
26
<PAGE>
with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
-------- -------
9. Termination. This Agreement will continue in effect until terminated as
-----------
provided in this Section 9.
(a) This Agreement may be terminated by either the Company or any Agent giving
written notice of such termination to the other parties hereto. This
Agreement shall so terminate at the close of business of the party to whom
such notice is given. This Agreement may be terminated as to one or more
of the Agents, and to the extent not terminated with respect to any Agent,
this Agreement shall remain in full force and effect as between the Company
and any such Agent.
(b) Each Terms Agreement (including this Agreement, as incorporated by
reference therein) shall be subject to termination in the absolute
discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for Notes to be purchased thereunder, if at or
prior to such time (i) there has been, since the date of such Terms
Agreement or since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the condition
(financial or other), earnings, results of operations, business or
properties of the Company and its subsidiaries considered as one
enterprise, whether or not from transactions arising in the ordinary course
of business, (ii) trading in the securities of the Company has been
suspended by the Commission or a national securities exchange, or trading
in securities generally on either the American Stock Exchange, the New York
Stock Exchange or the Nasdaq National Market 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 a banking
moratorium has been declared by either Federal or New York State
authorities, or (iii) there shall have occurred any outbreak or material
escalation of hostilities or other calamity or crisis the effect of which
on the financial markets of the United States is such as to make it, in the
judgment of the Purchaser, impracticable to market such Notes or enforce
contracts for the sale of such Notes.
(c) In the event of any such termination, no party shall have any liability to
the other parties hereto, except as provided in (i) the covenants set forth
in Section 4 with respect to any offering of Notes purchased from the
Company pursuant to the applicable Terms Agreement, (ii) the covenants set
forth in Section 4(c), 4(g) and 4(l) and (iii) the provisions of Section 2,
Section 7, Section 8, Section 10, Section 11, Section 14 and this Section 9
shall remain in effect.
10. Representations, Warranties, Agreements and Indemnities to Survive
------------------------------------------------------------------
Delivery. All representations, warranties, agreements and indemnities contained
- --------
in or made pursuant to this Agreement, or contained in certificates of officers
of the Company submitted pursuant hereto, shall remain operative and in full
force and effect regardless of any termination of the applicable Terms Agreement
(including this Agreement as incorporated by reference
27
<PAGE>
therein) or any investigation made by or on behalf of any Agent or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and shall survive delivery of and payment for any Notes.
11. Right of Person Who Agreed to Purchase To Refuse To Purchase. The Company
------------------------------------------------------------
agrees to offer to any person who has agreed to purchase and pay for Notes the
right to refuse to purchase such Notes if, on the related Closing Date fixed
pursuant to the Procedures, any condition set forth in Section 5(a), 5(f) or
5(h) shall not be satisfied.
12. Notices. All communications hereunder will be in writing and effective
-------
only on receipt, and, if sent to an Agent, will be mailed, delivered or
facsimilied and confirmed to such Agent, at the address specified in Schedule I
hereto; or, if sent to the Company, will be mailed, delivered or facsimilied and
confirmed to it at Tandy Corporation, 1800 One Tandy Center, Fort Worth, Texas
76102, attention of the Secretary with a copy to the Treasurer.
13. Successors. This Agreement will inure to the benefit of and be binding
----------
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
14. Applicable Law. THIS AGREEMENT AND EACH TERMS AGREEMENT SHALL BE GOVERNED
-------------- ---------------------------------------------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
- -----------------------------------------------------------------------------
REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.
- --------------------------------------------
15. Counterparts. This Agreement may be executed in any number of counterparts,
------------
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
28
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and the acceptance by each of you shall represent a binding
agreement among the Company and each of you.
Very truly yours,
TANDY CORPORATION
By:
-------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
BEAR, STEARNS & CO. INC.
By:
--------------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
--------------------------
Name:
Title:
SALOMON BROTHERS INC
By:
--------------------------
Name:
Title:
CITICORP SECURITIES, INC.
By:
--------------------------
Name:
Title:
BANCAMERICA ROBERTSON STEPHENS
By:
--------------------------
Name:
Title:
29
<PAGE>
SCHEDULE I
Sales Agreement dated November 4, 1997
Registration Statement No. 333-27297 ($300,000,000)
Amount of the Notes: U.S.$150,000,000
The Company agrees to pay any agent a commission equal to the
following percentage of the principal amount of each Note sold by such Agent:
Term Commission Rate
---- ---------------
From 9 months to less than 1 year 0.125%
From 1 year to less than 18 months 0.150%
From 18 months to less than 2 years 0.200%
From 2 years to less than 3 years 0.250%
From 3 years to less than 4 years 0.350%
From 4 years to less than 5 years 0.450%
From 5 years to less than 6 years. 0.500%
From 6 years to less than 7 years 0.550%
From 7 years to less than 10 years 0.600%
From 10 years to less than 15 years 0.625%
From 15 years to less than 20 years 0.700%
From 20 years up to and including 30 years 0.750%
Longer than 30 years to be negotiated
Addresses for Notices to Agents:
Notices to Bear, Stearns & Co. Inc. shall be directed to it at 245
Park Avenue, New York, New York 10167.
Notices to Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be
directed to it at World Financial Center, North Tower, 10rd Floor, New York, New
York 10281-1310.
<PAGE>
Notices to Salomon Brothers Inc shall be directed to it at Seven World
Trade Center, New York, New York 10048.
Notices to BancAmerica Robertson Stephens shall be directed to it at
231 South LaSalle Street, Chicago, Illinois 60697.
Notices to Citicorp Securities, Inc. shall be directed to it at 399
Park Avenue, New York, New York 10043.
2
<PAGE>
EXHIBIT A
$150,000,000
TANDY CORPORATION
MEDIUM-TERM NOTES, SERIES B
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
ADMINISTRATIVE PROCEDURES
Tandy Corporation Medium-Term Notes, Series B, Due Nine Months or More
From Date of Issue (the "Notes"), are offered on a continuing basis by Tandy
Corporation (the "Company"), Bear, Stearns & Co. Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Salomon Brothers Inc, BancAmerica Robertson
Stephens and Citicorp Securities, Inc. as agents (the "Agents"), who have agreed
to use their reasonable best efforts to solicit purchases of the Notes. The
Notes are being sold pursuant to a Sales Agreement, dated November 4, 1997,
between the Company and each of the Agents (the "Sales Agreement"). The Company
has reserved the right to sell Notes directly on its own behalf. The Notes will
be unsecured and unsubordinated and have been registered with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933 (the
"Securities Act"). The Chase Manhattan Bank is the trustee (the "Trustee") under
an Indenture dated as of May 1, 1997, between the Company and the Trustee (the
"Indenture") covering the Notes. Unless otherwise specified in a Pricing
Supplement, the Trustee will also serve as Calculation Agent with respect to the
Notes.
The Notes will be issued in book-entry form and represented by one or
more fully registered global notes without coupons (each, a "Global Security")
held by the Trustee, as agent for The Depository Trust Corporation ("DTC") and
recorded in the book-entry system maintained by DTC. Owners of beneficial
interests in a Global Security will be entitled to physical delivery of Notes
issued in certificated form equal in principal amount to their respective
beneficial interests only upon certain limited circumstances described in the
Indenture.
Administrative procedures and specific terms of the offering are
explained below. Administrative responsibilities will be handled for the
Company by its Corporate Finance/Treasury Department; accountable document
control and record-keeping responsibilities will be performed by its Controller
Department. The Company will advise the Agents and the Trustee in writing of
those persons handling administrative responsibilities with whom the Agents and
the Trustee are to communicate regarding offers to purchase Notes and the
details of their delivery.
Notes will be issued in accordance with the administrative procedures
set forth herein. To the extent the procedures set forth below conflict with or
omit certain of the provisions of the Notes, the Indenture, the Sales Agreement
or the Prospectus and the Pricing Supplement (together, the "Prospectus"), the
relevant provisions of the Notes, the Indenture, the Sales Agreement and the
Prospectus shall control. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in the Sales Agreement, the
<PAGE>
Prospectus in the form most recently filed with the Commission pursuant to Rule
424 of the Securities Act, in the Indenture or in the Notes.
Administrative Procedures for Notes
-----------------------------------
In connection with the qualification of Notes for eligibility in the
book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its obligations under a Letter of Representations from the Company and the
Trustee to DTC, dated November 4, 1997, and a Medium-Term Note Certificate
Agreement between the Trustee and DTC (the "Certificate Agreement") dated
December 2, 1988, and its obligations as a participant in DTC, including DTC's
Same-Day Funds Settlement System ("SDFS").
Maturities: Each Note will mature on a date (the "Maturity
Date") not less than nine months after the
date of delivery by the Company of such Note.
Notes will mature on any date selected by the
Company and agreed to by the initial
purchaser. "Maturity" when used with respect
to any Note, means the date on which the
outstanding principal amount of such Note
becomes due and payable in full in accordance
with its terms, whether at its Maturity Date
or by declaration of acceleration, call for
redemption, repayment or otherwise.
Issuance: All Fixed Rate Notes having the same terms
(collectively, the "Fixed Rate Terms") will be
represented initially by a single Global
Security in fully registered form without
coupons. Each Global Security will be dated
and issued as of the date of its
authentication by the Trustee.
All Floating Rate Notes which have the same
terms (collectively, the "Floating Rate
Terms") will be represented initially by a
single Global Security in fully registered
form without coupons; all OID Notes which have
the same terms (collectively, the "Zero-Coupon
Terms") will be represented initially by a
single Global Security in fully registered
form without coupons; all Currency Indexed
Notes which have the same terms (collectively,
the "Currency Indexed Note Terms"), will be
2
<PAGE>
represented initially by a single Global
Security in fully registered form without
coupons; and all Other Indexed Notes which
have the same index or formula as its
determination reference (the "Indexed Note
Terms") will be represented initially by a
single Global Security in fully registered
form without coupons.
Each Global Security will bear an Issue Date,
which will be (i) with respect to an original
Global Security (or any portion thereof), its
original issuance date (which will be the
Settlement Date for the Notes represented by
such Global Security) and (ii) with respect to
any Global Security (or portion thereof)
issued subsequently upon exchange of a Global
Security or in lieu of a destroyed, lost or
stolen Global Security, the most recent
Interest Payment Date to which interest has
been paid or duly provided for on the
predecessor Global Security or Securities (or
if no such payment or provision has been made,
the original issuance date of the predecessor
Global Security or Securities), regardless of
the date of authentication of such
subsequently issued Global Security.
Identification Numbers: The Company has received from the CUSIP
Service Bureau (the "CUSIP Service Bureau") of
Standard & Poor's Corporation ("Standard &
Poor's") one series of CUSIP numbers
consisting of approximately 900 CUSIP numbers
for future assignment to Global Securities.
The Company will provide DTC and the Trustee
with a list of such CUSIP numbers. The
Company will assign CUSIP numbers as described
below under Settlement Procedure "B." DTC will
notify the CUSIP Service Bureau periodically
of the CUSIP numbers that the Company has
assigned to Global Securities. The Company
will reserve additional CUSIP numbers when
necessary for assignment to Global Securities
and will provide the Trustee and DTC with the
list of
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<PAGE>
additional CUSIP numbers so obtained.
Registration: Global Securities will be issued only in fully
registered form without coupons. Each Global
Security will be registered in the name of
Cede & Co., as nominee for DTC, on the
Security Register maintained under the
Indenture by the Company. The beneficial
owner of a 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 beneficial
owner of such Note in the account of such
Participants. The ownership interest of such
beneficial owner in such 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.
Transfers: Transfers of a 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 Note.
Exchanges: The Trustee, at the Company's request, may
deliver to DTC and the CUSIP Service Bureau at
any time a written notice of consolidation
specifying (a) the CUSIP numbers of two or
more Global Securities outstanding on such
date that represent Securities having the same
Fixed Rate Terms or Floating Rate Term or
Zero-Coupon Terms or Currency Indexed Note
Terms or Indexed Note Terms as the case may be
(except that Issue Dates need not be the same)
and for which interest, if any, has been paid
to the same date and which otherwise
constitute Securities of the same series and
4
<PAGE>
tenor under the Indenture, (b) a date,
occurring at least 30 days after such written
notice is delivered and at least 30 days
before the next Interest Payment Date, if any,
for the related Notes, on which such Global
Securities shall be exchanged for a single
replacement Global Security; and (c) a new
CUSIP number, obtained from the Company, to be
assigned to such replacement Global Security.
Upon receipt of such a notice, DTC will send
to its participants and the Trustee a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to
the specified exchange date, the Trustee will
deliver to the CUSIP Service Bureau written
notice setting forth such exchange date and
the new CUSIP number and stating that, as of
such exchange date, the CUSIP numbers of the
Global Securities to be exchanged will no
longer be valid. On the specified exchange
date, the Trustee will exchange such Global
Securities for a single Global Security
bearing the new CUSIP number and the CUSIP
numbers of the exchanged Global Securities
will, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing, if
the Global Securities to be exchanged exceed
U.S. $200,000,000 in aggregate principal
amount, one replacement Global Security will
be authenticated and issued to represent each
U.S.$200,000,000 of principal amount of the
exchanged Global Securities and an additional
Global Security will be authenticated and
issued to represent any remaining principal
amount of such Global Securities. (See
"Denominations" below.)
Denominations: Notes will be issued in denominations of
U.S.$1,000 or more (in multiples of
U.S.$l,000). Global Securities will be
denominated in principal amounts not in excess
of U.S. $200,000,000. If one or more Notes
having an aggregate principal amount in excess
of U.S. $200,000,000 would, but for the
5
<PAGE>
preceding sentence, be represented by a single
Global Security in fully registered form
without coupons, then one Global Security will
be issued to represent each U.S. $200,000,000
principal amount of such Security or
Securities and an additional Global Security
will be issued to represent any remaining
principal amount of such Note or Notes. In
such case, each of the Global Securities
representing such Note or Notes shall be
assigned the same CUSIP number.
Currently, Notes denominated in a Specified
Currency other than U.S. dollars ("Foreign
Currency Notes") cannot be issued in
book-entry form through DTC. If and when such
issuance becomes possible, unless otherwise
indicated in the applicable Pricing
Supplement, holders of Foreign Currency Notes
(other than Currency Indexed Notes) will be
paid in the Specified Currency for such Note,
unless such holder elects to be paid in U.S.
dollars as may be specified in the applicable
Pricing Supplement and Note.
Issue Price: Unless otherwise specified in an applicable
Pricing Supplement, each Note will be issued
at the percentage of principal amount
specified in the Prospectus relating to such
Note.
Interest: General. Each Note will bear interest at a
fixed rate (a "Fixed Rate Note"), which may be
zero during all or any part of the term in the
case of certain Notes issued at a price
representing a substantial discount from the
principal amount payable at Maturity, or at a
floating rate (a "Floating Rate Note"). A
Fixed Rate Note may pay a level amount in
respect of both interest and principal
amortized over the life of the Note (an
"Amortizing Note"). Interest on each Note
will accrue from the Issue Date of such Note
for the first interest period (including the
first interest period after which a new Global
Security issued in exchange for a Global
Security or in lieu of a destroyed, lost
6
<PAGE>
or stolen Global Security) and from the most
recent Interest Payment Date to which interest
has been paid for all subsequent interest
periods. Except as set forth hereafter, each
payment of interest on a Note will include
interest accrued to but excluding, as the case
may be, the Interest Payment Date or the date
of Maturity. Any payment of principal, premium
or interest required to be made on a day that
is not a Business Day (as defined below) may be
made on the next succeeding Business Day (or
if, in the case of a LIBOR-based Floating Rate
Note, such Business Day would fall in the next
calendar month, on the next preceding Business
Day) and no interest shall accrue as a result
of any such delayed payment.
Each pending deposit message described under
Settlement Procedure "C" below will be routed
to Standard & Poor's, which will use the
message to include certain information
regarding the related Notes in the appropriate
daily bond report published by Standard &
Poor's.
Fixed Rate Notes. Unless otherwise specified
-----------------
in the applicable Pricing Supplement, interest
on each Fixed Rate Note (other than a
principal-only Note or an Amortizing Note)
will be payable at Maturity and semi-annually
each April 1 and October 1 (a "Semi-Annual Pay
Note") and at Maturity. Payments with respect
to Amortizing Notes will be applied first to
interest due and payable thereon and then to
the reduction of the unpaid principal amount
thereof. In the case of Fixed Rate Notes
issued between a Regular Record Date and the
Interest Payment Date relating to such Regular
Record Date, interest for the period beginning
on the Issue Date and ending on such Interest
Payment Date shall be paid on the Interest
Payment Date following the next succeeding
7
<PAGE>
Regular Record Date to the registered Holder
on such next succeeding Regular Record Date.
Unless otherwise specified in the applicable
Pricing Supplement, the Regular Record Date
with respect to any Interest Payment Date for
a Fixed Rate Note shall be the March 15 or
September 15 preceding such Interest Payment
Date.
Floating Rate Notes. Interest on Floating
--------------------
Rate Notes will be payable monthly, quarterly,
semi-annually or annually as indicated in such
Notes on each Interest Payment Date indicated
in such Notes commencing with the Interest
Payment Date next following the respective
Original Issue Date of such Notes. Unless
otherwise specified in the applicable Pricing
Supplement, the Regular Record Date with
respect to any Interest Payment Date shall be
15 calendar days prior to such Interest
Payment Date; provided that if an Interest
Payment Date for Floating Rate Notes would
otherwise be a day that is not a Business Day,
such Interest Payment Date will be the next
succeeding Business Day with respect to such
Floating Rate Notes, except in the case of a
LIBOR Note if such Business Day is in the next
succeeding calendar month, in which event such
Interest Payment Date will be the immediately
preceding Business Day. In the case of
Floating Rate Notes issued between a Regular
Record Date and the Interest Payment Date
relating to such Regular Record Date, interest
for the period beginning on the Issue Date and
ending on such Interest Payment Date shall be
paid on the Interest Payment Date following
the next succeeding Regular Record Date to the
registered Holder on such next succeeding
Regular Record Date.
Calculation of Interest: 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. (Examples of interest
calculations are as follows: April 1, 1998 to
October 1, 1998 equals 6 months and 0 days, or
180 days; the interest paid equals 180/360
times the annual
8
<PAGE>
rate of interest times the principal amount of
the Note. The period from April 1, 1998 to
August 28, 1998 equals 4 months and 28 days, or
148 days; the interest payable equals 148/360
times the annual rate of interest times the
principal amount of the Note.)
Interest rates on Floating Rate Notes will be
determined as set forth in the form of Notes
(substantially as described in the Prospectus
and the applicable Pricing Supplement).
Interest on Floating Rate Notes will be
calculated on the basis of actual days elapsed
and a year of 360 days except that (i) in the
case of Treasury Rate Notes, interest will be
calculated on the basis of the actual number
of days in the year and (ii) in the case of
CMT Rate Notes, interest will be calculated on
the basis of (x) twelve 30-day months and a
360-day year or (y) the actual number of days
in the year, as indicated in the applicable
Pricing Supplement.
Business Day: "Business Day" means (i) with respect to any
Note and when used with respect to any Place
of Payment, each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which
banking institutions or trust companies in an
applicable Place of Payment, the city in which
the Trustee's Corporate Trust Office is
located or in the Borough of Manhattan, The
City of New York are authorized or obligated
by law, executive order or regulation to
remain closed, and (ii) with respect to the
determination of the interest rate applicable
to LIBOR Notes only, a London Banking Day. A
"London Banking Day" means any day on which
dealings in deposits in U.S. dollars are
transacted in the London interbank market.
Payments of Principal and Payments of Principal and Interest. Promptly
Interest -----------------------------------
after each Regular Record Date, the Trustee
will deliver to the Company and DTC a written
notice specifying by CUSIP number the amount
of interest, if any, (and, with respect to any
Amortizing Notes, principal) to be paid on
9
<PAGE>
each Global Security on the following Interest
Payment Date (other than an Interest Payment
Date coinciding with a Maturity Date) and the
total of such amounts. DTC will confirm the
amount payable on each Global Security on such
Interest Payment Date by reference to the
daily bond reports published by Standard &
Poor's. On such Interest Payment Date, the
Company will pay to the Trustee, and the
Trustee in turn will pay to DTC, such total
amount of interest (and, with respect to any
Amortizing Notes, principal) due (other than
on the Maturity Date), at the times and in the
manner set forth below under "Manner of
Payment." If any Interest Payment Date for
any Note 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 Interest Payment Date except in the
case of a LIBOR Note if such Business Day is
in the next succeeding calendar month, in
which event such Interest Payment Date will be
the immediately preceding Business Day.
Payments on the Maturity Date. On or about
------------------------------
the first Business Day of each month, the
Trustee will deliver to the Company and DTC a
written list of principal, premium, if any,
and interest to be paid on each Global
Security representing Notes maturing or
subject to redemption (pursuant to a sinking
fund or otherwise) or repayment in the
following month. The Trustee, the Company and
DTC will confirm the amounts of such
principal, premium, if any, and interest
payments with respect to each Global Security
on or about the fifth Business Day preceding
the Maturity Date of such Global Security. On
the Maturity Date, the Company will pay to the
Trustee, and the Trustee in turn will pay to
DTC, the principal amount of such Global
Security, together with interest and premium,
if any, due on such Maturity Date, at the
times and in the manner set forth below under
"Manner of Payment." If
10
<PAGE>
the Maturity Date of any Global Security 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
Maturity Date. Promptly after payment to DTC of
the principal and interest due on the Maturity
Date of such Global Security and all other
Notes represented by such Global Security, the
Trustee will cancel such Global Security in
accordance with the Indenture and so advise the
Company.
Manner of Payment. The total amount of any
-----------------
principal, premium, if any, and interest due
on Global Securities on any Interest Payment
Date or at Maturity shall be paid by the
Company to the Trustee in immediately
available funds on such date. The Company
will make such payment on such Global
Securities by instructing the Trustee to
withdraw funds from an account maintained by
the Company with The Chase Manhattan Bank or
by wire transfer to ABA# 0210-0002-1, Account
Code 324-005-806. The Company will confirm
such instructions in writing to the Trustee.
Prior to 10:00 a.m., New York City time, on
the Maturity Date or as soon as possible
thereafter, the Trustee will pay by separate
wire transfer (using Fedwire message entry
instructions in a form previously specified by
DTC) to an account at the Federal Reserve Bank
of New York previously specified by DTC, in
funds available for immediate use by DTC, each
payment of interest, principal and premium, if
any, due on a Global Security on such date.
On each Interest Payment Date (other than an
Interest Payment Date that is on the Maturity
Date) the Trustee will pay DTC such interest
payments in same-day funds in accordance with
existing arrangements between the Trustee 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
11
<PAGE>
to the respective Participants with payments in
amounts proportionate to their respective
holdings in principal amount of beneficial
interests in such Global Security as are
recorded in the book-entry system maintained by
DTC. Neither the Company nor the Trustee shall
have any direct responsibility or liability for
the payment by DTC of the principal of, or
premium, if any, or interest on, the Notes to
such Participants.
Withholding Taxes. The amount of any taxes
-----------------
required under applicable law to be withheld
from any interest payment on a 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.
Procedure for Rate Setting and The Company and the Agents will discuss, from
Posting: time to time, the aggregate principal amount
of, the Issue Price and the interest rates to
be borne by Notes that may be sold as a result
of the solicitation of orders by the Agents. If
the Company decides to set interest rates borne
by any Notes in respect of which the Agents are
to solicit orders (the setting of such interest
rates to be referred to herein as "posting") or
if the Company decides to change interest rates
previously posted by it, it will promptly
advise the Agents of the prices and interest
rates to be posted.
Acceptance and Rejection of Unless otherwise agreed by the Company and the
Orders: Agents, the Company has the sole right to
accept orders to purchase Notes and may reject
any such order in whole or in part. Unless
otherwise instructed by the Company, each Agent
will promptly advise the Company by telephone
of all offers to purchase Notes received by it,
other than those rejected by it in whole or in
part in the reasonable exercise of its
discretion. No order for less than U.S.$1,000
principal amount of Notes will
12
<PAGE>
be accepted.
Preparation of Pricing If any offer to purchase a Note is accepted by
Supplement: or on behalf of the Company, the Company will
provide a Pricing Supplement reflecting the
terms of such Note and will have filed such
Pricing Supplement with the Commission in
accordance with the applicable paragraph of
Rule 424(b) under the Act and will supply a
copy thereof (or additional copies if
requested) to the Agent that presented such
offer (the "Presenting Agent") and one copy to
the Trustee. The Presenting Agent will cause a
Prospectus and Pricing Supplement to be
delivered to the purchaser of such Note. In
each instance that a Pricing Supplement is
prepared, the Agents will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated Pricing Supplements and the
Prospectuses to which they are attached (other
than those retained for files) will be
destroyed.
Delivery of Confirmation and Subject to "Suspension of Solicitation;
Prospectus to Purchaser by Amendment or Supplement" below, an Agent will
Presenting Agent: deliver a Prospectus and Pricing Supplement as
herein described with respect to each Note sold
by it. The Company will make such deliveries
with respect to all Notes sold directly by the
Company.
For each offer to purchase a Note solicited by
an Agent and accepted by or on behalf of the
Company, the Presenting Agent will issue a
confirmation to the purchaser, with a copy to
the Company, setting forth the terms of such
Note and other applicable details described
above and delivery and payment instructions.
In addition, the Presenting Agent will deliver
to such purchaser the Prospectus (including
the Pricing Supplement) in relation to such
Note prior to or together with the earlier of
any written offer of such Note, delivery of
the confirmation of sale or delivery of the
Note.
13
<PAGE>
Settlement: The receipt of immediately available funds by
the Company in payment for Notes and the
authentication and issuance of the Global
Security representing such Notes shall
constitute "Settlement" with respect to such
Global Security and such Notes. All orders
accepted by the Company will be settled within
one to five Business Days pursuant to the
timetable for Settlement set forth below,
unless the Company and the purchaser agree to
Settlement on a later date, and shall so
specify upon acceptance of such offer;
provided, however, in all cases the Company
will notify the Trustee on the date issuance
instructions are given.
Settlement Procedures: In the event of a purchase of Notes by any
Agent, as principal, appropriate Settlement
details, if different from those set forth
below, will be set forth in the applicable
Terms Agreement to be entered into between
such Agent and the Company pursuant to the
Sales Agreement. Settlement Procedures with
regard to each Note sold by an Agent, as agent
for the Company, shall be as follows:
A. After the acceptance of an offer by the Company with respect to a
Note, the Presenting Agent will communicate the following details
of the terms of such offer (the "Note Sale Information"), as
applicable, to the Company by telephone confirmed in writing or
by facsimile transmission or other acceptable written means:
1. Principal amount of the purchase;
2. Specified Currency;
3. If a Fixed Rate Note, the Interest Rate;
4. Interest Payment Dates;
5. Settlement Date;
6. Maturity Date/Original Maturity Date;
7. Extension Period;
14
<PAGE>
8. Purchase price;
9. Indexed Currency, Specified Currency, the Base Exchange Rate
and the Face Amount, if applicable;
10. Presenting Agent's commission determined pursuant to Section
2(a) of the Sales Agreement;
11. Net proceeds to the Company;
12. Original Issue Date;
13. If a Note is redeemable by the Company, such of the
following as are applicable:
(i) The date on and after which such Note may be redeemed
(the "Redemption Commencement Date"),
(ii) The initial Redemption Price (% of par), and
(iii) The amount (% of par) that the initial Redemption
Price shall decline (but not below par) on each
anniversary of the Redemption Commencement Date;
14. Optional Repayment Dates;
15. If a Floating Rate Note, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Interest Payment Period,
(iii) Index Maturity,
(iv) Spread and/or Spread Multiplier,
(v) Alternate Rate Event Spread;
(vi) Maximum Interest Rate,
(vii) Minimum Interest Rate,
(viii) Initial Interest Rate,
(ix) Interest Reset Period,
(x) Interest Reset Date(s),
15
<PAGE>
(xi) Calculation Date(s),
(xii) Interest Calculation Date(s),
(xiii) Interest Payment Date(s),
(xiv) Regular Record Date(s), and
(xv) Calculation Agent;
16. If the amount of principal or interest, or both, payable on
a Note will be determined by reference to an index or
formula, a full description of such index or formula;
17. If an OID Note, the total amount of original issue discount,
the yield to maturity and the initial accrual period of
original issue discount;
18. Sinking fund provisions;
19. Defeasance provisions;
20. DTC Participant Number of the institution through which the
customer will hold the beneficial interest in the Global
Security; and
21. Such other terms as are necessary to complete the applicable
form of Note.
B. The Company will assign a CUSIP number to the Global Security
representing such Note and then advise the Trustee and the
Presenting Agent by telephone (confirmed in writing at any time
on the same date) or by facsimile or other form of electronic
transmission of the information received in accordance with
Settlement Procedure "A" above, the assigned CUSIP number and the
name of the Agent. Each such communication by the Company will
be deemed to constitute a representation and warranty by the
Company to the Trustee and the Agent that (i) such Note is then,
and at the time of issuance and sale thereof will be, duly
authorized for issuance and sale by the Company; (ii) such Note,
and the Global Security representing such Note, will conform with
the terms of the Indenture; and (iii) upon authentication and
delivery of the Global Security representing such Note, the
aggregate principal amount of all Notes issued under the
Indenture will not exceed the aggregate principal amount of Notes
authorized for issuance at such time by the Company.
16
<PAGE>
C. The Trustee will communicate to DTC and the Agent through DTC's
Participant Terminal System, a pending deposit message specifying
the following Settlement information:
1. The information received in accordance with Settlement
Procedure "A."
2. The numbers of the participant accounts maintained by DTC on
behalf of the Trustee and the Agent.
3. The initial Interest Payment Date for such Note, number of
days by which such date succeeds the related DTC record date
(which term means the Regular Record Date) and in the case
of Floating Rate Notes which reset daily or weekly, the date
five calendar days preceding such initial Interest Payment
Date, and if then calculated, the amount of interest (and,
with respect to any Amortizing Note, principal) payable on
such initial Interest Payment Date (which amount shall have
been confirmed by the Trustee).
4 The CUSIP number of the Global Security representing such
Notes.
5. The frequency of interest (and, with respect to any
Amortizing Note, principal) payments.
6. The frequency of Interest Reset Dates.
7 Whether such Global Security represents any other Notes issued
or to be issued (to the extent then known).
D. The Trustee will complete and deliver a Global Security
representing such Note in a form that has been approved by the
Company, the Agents and the Trustee and, in connection therewith,
the Company will provide to the Trustee the Officers' Certificate
and the Opinion of Counsel required pursuant to Section 102 of
the Indenture.
E. The Trustee will authenticate the Global Security representing
such Note and maintain possession of such Global Security and, in
connection therewith, the Company will provide to the Trustee the
Officers' Certificate and the Opinion of Counsel required
pursuant to Section 102 of the Indenture.
F. DTC will credit such Note to the participant account of the
Trustee maintained by DTC.
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<PAGE>
G. The Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such
Note to the Trustee's participant account and credit such Note to
the participant account of the Agent maintained by DTC and (ii)
debit the settlement account of the Agent and credit the
settlement account of the Trustee maintained by DTC, in an amount
equal to the price of such Note less the Agent's commission. The
entry of such a deliver order shall be deemed to constitute a
representation and warranty by the Trustee to DTC that (a) the
Global Security representing such Note has been issued and
authenticated and (b) the Trustee is holding such Global Security
pursuant to the Certificate Agreement.
H. The Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such
Note to the Agent's participant account and credit such Note to
the participant accounts of the Participants to whom such Note is
to be credited maintained by DTC and (ii) debit the settlement
accounts of such Participants and credit the settlement account
of the Agent maintained by DTC, in an amount equal to the price
of the Note so credited to their accounts.
I. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in effect on the
Settlement Date.
J. The Trustee will credit to an account of the Company maintained
at The Chase Manhattan Bank, ABA# 0210-0002-1, Account Code 324-
005-806, funds available for immediate use in an amount equal to
the amount credited to the Trustee's DTC participant account in
accordance with Settlement Procedure "G."
K. The Trustee will send a copy of the Global Security representing
such Note by first-class mail to the Company.
L. The Agent will confirm the purchase of each Note to the purchaser
thereof either by transmitting to the Participant to whose
account such Note has been credited a confirmation order through
DTC's Participant Terminal System or by mailing a written
confirmation to such purchaser. In all cases the Prospectus as
most recently amended or supplemented must accompany or precede
such confirmation.
M. Each Business Day, the Trustee will send to the Company a
statement setting forth the principal amount of Notes outstanding
as of that date under the Indenture and setting forth the CUSIP
number(s) assigned to, and a brief description of, any orders
which the Company has advised the Trustee but which have not yet
been settled.
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Settlement Procedures Timetable: In the event of a purchase of Notes by an Agent, as
- ------------------------------- principal, appropriate Settlement details, if different
from those set forth below will be set forth in the
applicable Terms Agreement to be entered into between such
Agent and the Company pursuant to the Sales Agreement.
For orders of Notes solicited by an Agent, as agent, and
accepted by the Company, Settlement Procedures "A" through
"M" 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-B 12:00 p.m. on the Business Day before the Settlement Date.
C 2:00 p.m. on the Business Day before the Settlement Date.
D 5:00 p.m. on the Business Day before the Settlement Date.
E 9:00 a.m. on the Settlement Date.
F 10:00 a.m. on the Settlement Date.
G-H 2:00 p.m. on the Settlement Date.
I 4:45 p.m. on the Settlement Date.
J-K 5:00 p.m. on the Settlement Date.
M Daily
NOTE: The Prospectus as most recently amended or
supplemented must accompany or precede any written
confirmation given to the customer (Settlement Procedure
"L"). Settlement Procedure "I" is subject to extension in
accordance with any extension Fedwire closing deadlines
and in the other events specified in the SDFS operating
procedures in effect on the Settlement Date.
If Settlement of a Note is rescheduled or canceled, the
Trustee will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such effect by
no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled
Settlement Date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver order with
respect to a Note pursuant to Settlement Procedure "G,"
the Trustee may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a withdrawal
message instructing DTC to debit such Note to the
participant account of the Trustee maintained at DTC. DTC
will process the withdrawal message, provided that
--------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
such participant account contains Notes having the same Fixed
Rate Terms, Floating Rate Terms or Zero-Coupon Terms, as
the case may be, and having a principal amount that is at
least equal to the principal amount of such Note to be
debited. If withdrawal messages are processed with
respect to all the Notes issued or to be issued
represented by a Global Security, the Trustee will cancel
such Global Security in accordance with the Indenture,
make appropriate entries in its records and so advise the
Company. The CUSIP number assigned to such Global
Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned.
If withdrawal messages are processed with respect to one
or more, but not all, of the Notes represented by a Global
Security, the Trustee will exchange such Global Security
for two Global Securities, one of which shall represent
such Notes and shall be canceled immediately after
issuance, and the other of which shall represent the
remaining Notes previously represented by the surrendered
Global Security and shall bear the CUSIP number of the
surrendered Global Security. If the purchase price for
any 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 related Agent may enter SDFS deliver
orders through DTC's Participant Terminal System reversing
the orders entered pursuant to Settlement Procedures "G"
and "H," respectively. Thereafter, the Trustee will
deliver the withdrawal message and take the related
actions described in the preceding paragraph. If such
failure shall have occurred for any reason other than
default by the Agent in the performance of its obligations
hereunder or under the Sales Agreement, the Company will
reimburse the Agent on an equitable basis for its loss of
the use of funds during the period when they were credited
to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle
with respect to a 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 Notes that were to have
been represented by a Global Security, the Trustee will
provide, in accordance with Settlement Procedures "D" and
"E," for the authentication and issuance of a Global
Security
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
representing the other Notes to have been
represented by such Global Security and will make
appropriate entries in its records.
Procedure for Rate Changes: Any decision to change the rate structure will require the
following actions:
1. Each time a decision has been reached to change rates,
the Company will promptly advise the Agents, who will
forthwith suspend solicitation of purchases of Notes at
the prior rates. The Agents will telephone the Company
with recommendations as to the changed interest rates.
2. The Company will prepare and file a Pricing Supplement
to the Prospectus pursuant to Rule 424 showing the new
rates.
3. The Company will deliver the Pricing Supplement to the
Agents in such quantities as they may request and to the
Trustee.
4. The Agents will deliver a copy of the Prospectus and
Pricing Supplement setting forth the new rates in
connection with the settlement of any outstanding orders
for delayed settlement at the old rates.
Until the Agents have been informed of the new rates, the
Agents may only record "indications of interest." The
Company and the Agents will destroy all outdated
Prospectuses, supplements and Pricing Supplements (other
than copies retained for their files) by the close of
business on the day the supplement pursuant to Rule 424
has been mailed to the Commission for filing.
Suspension of Solicitation;
Amendment or Supplement: Subject to the Company's representations, warranties and
covenants contained in the Sales Agreement, the Company
may instruct the Agents to suspend at any time for any
period of time or permanently, the solicitation of orders
to purchase Notes. Upon receipt of such instructions,
each Agent will forthwith suspend solicitation until such
time as the Company has advised it that solicitation of
purchases may be resumed.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
In the event that at the time the Company suspends
solicitation of purchases there shall be any orders
outstanding for settlement, the Company will promptly
advise the Agents and the Trustee whether such orders may
be settled and whether copies of the Prospectus as in
effect at the time of the suspension may be delivered in
connection with the settlement of such orders. The
Company will have the sole responsibility for such
decision and for any arrangements which may be made in the
event that the Company determines that such orders may not
be settled or that copies of such Prospectus may not be so
delivered.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will promptly
advise the Agents and furnish the Agents and the Trustee
with the proposed amendment or supplement and with such
certificates and opinions as are required, all to the
extent required by and in accordance with the terms of the
Sales Agreement. Subject to the provisions of the Sales
Agreement, the Company may file with the Commission any
supplement to the Prospectus relating to the Notes. The
Company will provide the Agents and the Trustee with
copies of any such supplement, and confirm to the Agents
that such supplement has been filed with the Commission.
Trustee Not to Risk Funds: Nothing herein shall be deemed to require the Trustee to
risk or expend its own funds in connection with any
payment to the Company, or the Agents or the purchasers,
it being understood by all parties that payments made by
the Trustee to either the Company or the Agents shall be
made only to the extent that funds are provided to the
Trustee for such purpose.
Advertising Costs: The Company shall have the right to approve the expenses
of any advertising an Agent may initiate in connection
with such Agent's solicitation to purchase the Notes.
</TABLE>
22
<PAGE>
EXHIBIT B
[Form of Terms Agreement]
The following terms, if applicable, shall be agreed to in writing by
the Agent(s) and the Company in connection with each sale of Notes.
<TABLE>
<CAPTION>
<S> <C>
Company: Tandy Corporation
Agent(s): [Bear, Stearns & Co. Inc., BancAmerica Robertson Stephens, Citicorp
Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Salomon Brothers Inc, others] [indicate if acting as a Purchaser]
Specified Currency: [ ]
Aggregate Principal Amount of Notes: [ ]
Original Issue Date: [ ]
Original Issue Price: [ ]% of Aggregate Principal Amount, plus accrued interest, if any,
from Original Issue Date
Price to Public: [ ]% of Aggregate Principal Amount, plus accrued interest, if any,
from Original Issue Date.
Agent's Discount or Commission Received [ ]
from the Company:
Discounts or Commissions to Purchasers [ ]
other than Agents:
Proceeds to Company (if different from [ ]
Original Issue Price):
Maturity Date: [ ]
Denomination: [U.S. $1,000 and integral multiples thereof, applicable provision for
other currencies]
Form of Notes: [ ] Book-Entry [ ] Certificated
Option to receive payments in U.S.
dollars (applicable if Note has
Specified Currency other than U.S.
dollars): [ ] Yes [ ] No
[ ] Fixed Rate Notes: Interest Rate: [ ]% per annum
Interest Payment Date(s): [On April 1 and October 1 of each year and
at Maturity.]
Record Date(s): [March 15 and September 15 of each year]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[ ] Floating Rate Notes: Initial Interest Rate: [ ]%
Interest Rate Basis: [Commercial Paper Rate, LIBOR
[Reuters/Telerate/other], Federal Funds Rate, Treasury Rate, Prime
Rate, CMT Rate [30-day months and 360-day year or actual number of
days in year], specify other basis]
Interest Reset Period(s): [ ]
Interest Determination Date(s): [ ]
Calculation Date(s): [ ]
Initial Interest Reset Date: [ ]
Interest Reset Date(s): [ ]
Interest Payment Date(s): [ ]
Interest Payment Period: [ ]
Index Maturity: [ ]
Spread: (plus or minus): [ ]
Spread Multiplier: [ ]
Alternate Rate Event Spread: [for Prime Rate Notes]
Regular Record Date: [The fifteenth day, whether or not a Business
Day, immediately preceding the relevant Interest Payment Date.]
Maximum/minimum interest rate limitation: [ ]
Calculation Agent: [The Chase Manhattan Bank]
[specify other terms relating to calculation of interest]
[ ] Notes with other floating rate
formula: [describe method for determining interest]
[ ] OID Notes: The Notes have been issued with original issue discount ("OID") for
U.S. federal income tax purposes. The following information is
provided solely for purposes of applying the federal income tax OID
rules to the Notes:
Issue Price: $ per $1,000 of principal amount
Original Issue Discount: $ per $1,000 of principal amount
Yield to Maturity: . %
Issue Date: , ]/1/
[specify other relevant information]
</TABLE>
/1/ To be included on Notes that are (i) offered for sale or resale in the
United States in connection with their original issuance and (ii) issued with
original issue discount for United States federal income tax purposes. If a Note
is denominated in a currency other than United States dollars, the "Issue Price"
and "Original Issue Discount" should be stated in such currency. The numbers set
out in the legend for such a Note need not be based on the foreign currency
equivalent of U.S. $1,000, but should be based on some easily-applied number in
the foreign currency (e.g., the minimum denomination).
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[ ] Currency Indexed Notes: [specify method for determining principal amount payable at maturity,
amount of premium or interest payable on any Interest Payment Date
and at Maturity Date, Face Amount, Base Exchange Rate and other terms
and information]
[ ] Other Indexed Notes: [specify method for determining principal amount payable at maturity,
amount of premium or interest payable on any Interest Payment Date
and at Maturity Date and other terms and information]
[ ] Exchangeable Notes: [specify terms of exchange, conversion or exercise, interest terms
and other terms and information]
Redemption (call): Redemption Date(s): [ ]
Redemption Price(s): [ ]
[specify whether Note is redeemable in part or only as a whole]
Optional Repayment (put): Optional Repayment Date(s): [ ]
Optional Repayment Price(s): [ ]
[specify whether Note may be redeemed for less than entire principal
amount]
Defeasance: [ ]
Sinking Fund: [ ]
Extension at Option of Company: Extension Period: [ ]
Final Maturity Date: [ ]
Automatic Extension: [ ]
CUSIP Number: [ ]
Exchange Rate Agent: [The Chase Manhattan Bank]
Special U.S. Federal Income Tax [tax gross-up, special provisions related to Currency Indexed Notes
Consequences: and Other Indexed Notes, other]
Other Terms or Disclosure: [ ]
</TABLE>
Also, in connection with the purchase of Notes by the Agent(s) as
principal and in accordance with Section 6(b) of the Sales Agreement, agreement
as to whether the following will be required:
3
<PAGE>
(a) Legal opinions pursuant to Sections 5(b)(i), 5(b)(ii) and 5(c) of
the Sales Agreement.
(b) Officers' certificate pursuant to Section 5(d) of the Sales
Agreement.
(c) Comfort letter pursuant to Section 5(e) of the Sales Agreement.
CONFIRMED,
TANDY CORPORATION
By:
--------------------------------------
Name:
Title:
[NAME OF AGENT]
By:
--------------------------------------
Name:
Title:
Date:
-------------------------------
4
