TOYOTA MOTORCREDIT CORPORATION Medium-TermNotes, Series B Due MoreThan Nine Months From Date of Issue

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED Merrill Lynch World Headquarters 4 World Financial Center  New York, New York 10080	HSBC SECURITIES (USA) INC. 452 Fifth Avenue New York, New York  10018
BANC OF AMERICA SECURITIES LLC Bank of America Tower One Bryant Park New York, New York 10036	J.P. MORGAN SECURITIES INC. 60 Wall Street New York, New York  10154
BARCLAYS CAPITAL INC. 745 Seventh Avenue New York, New York 10019	MORGAN STANLEY & CO. INCORPORATED 1585 Broadway New York, New York  10036
CITIGROUP GLOBAL MARKETS INC. 388 Greenwich Street New York, New York  10013	TOYOTA FINANCIAL SERVICES SECURITIES USA CORPORATION 19001 South Western Avenue, NF-10 Torrance, California 90501
DEUTSCHE BANK SECURITIES INC. 60 Wall Street New York, New York  10005

 

Ladies and Gentlemen:

Toyota Motor Credit Corporation, a California corporation (the “Company”) confirms its agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), Banc of America Securities LLC (“Banc of America”), Barclays Capital Inc. (“Barclays”), Citigroup Global Markets Inc. (“Citigroup”), Deutsche Bank Securities Inc. (“Deutsche Bank”), HSBC Securities (USA) Inc. (“HSBC”), J.P. Morgan Securities Inc. (“J.P. Morgan”), Morgan Stanley & Co. Incorporated (“Morgan Stanley”), and Toyota Financial Services Securities USA Corporation (“TFSS USA”) (collectively, the “Agents”), with respect to the issue and sale by the Company of its Medium-Term Notes, Series B, Due More Than Nine Months From Date of Issue (the “Notes”). The Notes are to be issued pursuant to an indenture, dated as of August 1, 1991, between the Company and The Bank of New York Mellon (“BONY”), as successor to

JPMorgan Chase Bank, N.A., as successor to The Chase Manhattan Bank, N.A., as trustee, as amended and supplemented by the First Supplemental Indenture, dated as of October 1, 1991, among the Company, BONY and Deutsche Bank Trust Company Americas, formerly known as Bankers Trust Company, and the Second Supplemental Indenture, dated as of March 31, 2004 among the Company, BONY and Deutsche Bank Trust Company Americas (collectively, and as the same may be further amended, restated or supplemented, the “Indenture”). Deutsche Bank Trust Company Americas will act as trustee with respect to the Notes (the “Trustee”). This Fourth Amended and Restated Distribution Agreement shall be referred to hereafter as this “Agreement.” The Company and certain of the Agents previously entered into a Third Amended and Restated Distribution Agreement dated March 7, 2006 (the “Original Agreement”), with respect to the Company’s Medium-Term Notes Due More Than Nine Months From Date of Issue (the “Original Notes”), and the parties have agreed not to offer and sell any additional Original Notes pursuant to the Original Agreement after the date hereof.

As of the date hereof, the Company has authorized the issuance and sale by the Company directly or through the Agents pursuant to the terms of this Agreement of an unlimited aggregate principal amount of Notes. This Agreement provides both for the sale of Notes by the Company directly to purchasers, in which case the Agents will act as agents of the Company in soliciting Note purchases, and (as may from time to time be agreed to by the Company and the related Agent or Agents) to one or more Agents as principal for resale to purchasers.

The Company has filed with the Securities and Exchange Commission (the “Commission”) an automatic shelf registration statement on Form S-3 (No. 333-157642) for the registration of debt securities, including the Notes, under the Securities Act of 1933, as amended (the “1933 Act”) and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”). Such registration statement has automatically become effective pursuant to Rule 462(e) of the 1933 Act Regulations, and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the “1939 Act”). Such registration statement (and any further registration statements which may be filed by the Company for the purpose of registering additional Notes and in connection with which this Agreement is included or incorporated by reference as an exhibit) and the prospectus constituting a part thereof, and any prospectus supplements relating to the Notes, including all documents incorporated therein by reference, as from time to time amended or supplemented by the filing of documents pursuant to the Securities Exchange Act of 1934 (the “1934 Act”) or the 1933 Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively, except that if any revised prospectus shall be provided to the Agents by the Company for use in connection with the offering of the Notes which is not required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term “Prospectus” shall refer to such revised prospectus from and after the time it is first provided to the Agents for such use. For purposes of this Agreement, all references to the Registration Statement, Prospectus or preliminary prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to its Interactive Data Electronic Applications (“IDEA”) or Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) systems.

SECTION 1.   Appointment as Agents.

(a) Appointment of Agents. Subject to the terms and conditions stated herein, the Company hereby appoints the Agents, except as otherwise provided in this Section 1(a), as the exclusive agents, subject to the provisions contained in this Section 1(a), for the purpose of soliciting purchases of the Notes from the Company by others and agrees that, except as otherwise contemplated herein, whenever the Company determines to sell Notes directly to one or more Agents as principal for resale to others, it will enter into a Terms Agreement (as hereafter defined) relating to each such sale in accordance with the provisions of Section 3(b) hereof if requested by such Agent. The Company agrees that, except as otherwise provided in this Section 1(a), during the period the Agents are acting as the Company’s agents hereunder, the Company will not engage any other party to assist in the placement of the Notes (other than any person or entity which, by executing a counterpart of this Agreement, becomes an Agent hereunder). Notwithstanding the foregoing, the Company reserves the right to (i) appoint additional agents for the purpose of assisting in the placement of the Notes during the term of this Agreement under the terms of an agreement substantially identical to this Agreement (provided that the commission to be paid to such additional agents in connection with the sale of any Note shall be the applicable commission determined pursuant to Section 3(a) hereof), and (ii) sell Notes to one or more underwriters in a discrete principal transaction or transactions (whether on an individual or syndicated basis) so long as such underwriter or underwriters shall execute an agreement substantially identical to this Agreement relating to such principal transaction or transactions (such person and/or entity described in subclause (ii) of this sentence shall be referred to herein as a “Dealer”), provided however, that no such agreement will appoint any such underwriter an agent under this Agreement except as relates to the related transaction or transactions. As used herein, the term “Agent”, in addition to Merrill Lynch, Banc of America, Barclays, Citigroup, Deutsche Bank, HSBC, J.P. Morgan, Morgan Stanley and TFSS USA, refers to each person or entity which, at any particular time, is an agent or underwriter, as the case may be, for the Company hereunder as evidenced by its execution of a counterpart of this Agreement.

(b) Reasonable Efforts Solicitations; Right to Reject Offers. Upon receipt of instructions from the Company, the Agents will use their reasonable efforts to solicit purchases of such principal amount of Notes as the Company and the Agents shall agree upon from time to time during the term of this Agreement, it being understood that the Company shall not approve the solicitation of purchases of Notes in excess of the amount which shall be authorized by the Company from time to time. The Agents will have no responsibility for maintaining records with respect to the aggregate initial offering price of Notes sold, or of otherwise monitoring the availability of Notes for sale under the Registration Statement. Each Agent will communicate to the Company, orally or in writing, each offer to purchase Notes, other than those offers rejected by such 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 the Agent’s agreement contained herein. The Company may accept or reject any proposed purchase of the Notes, in whole or in part.

(c) Solicitations as Agents; Purchases as Principals. In soliciting purchases of the Notes on behalf of the Company, unless otherwise specified pursuant to the terms hereof, each Agent shall act solely as agent for the Company and not as principal. Each Agent shall

make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by such Agent and accepted by the Company. No Agent shall have any liability to the Company in the event any such purchase is not consummated for any reason. No Agent shall have any obligation to purchase Notes from the Company as principal but such Agent, individually or as part of a syndicate with other Agents, may agree from time to time to purchase Notes as principal. Any such purchase of Notes by an Agent as principal shall be made pursuant to a Terms Agreement in accordance with Section 3(b) hereof if requested by such Agent. If the Company shall default on its obligation to deliver Notes to a purchaser whose offer has been solicited by such Agent on any agency basis and accepted by the Company due to its refusal to perform or because of a breach of representation or warranty contained herein, the Company shall (i) hold such Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) pay to such Agent any commission to which it would otherwise be entitled absent such default. As used herein, the term “Related Agent,” in connection with any particular offer and sale of Notes, refers to each Agent acting as agent or purchasing as principal with respect to such Notes.

(d) Reliance. The Company and the Agents agree that any Notes the placement of which the Agents arrange shall be placed by the Agents, and any Notes purchased by the Agents shall be purchased, in reliance on the representations, warranties, covenants and agreements of the Company contained herein and on the terms and conditions and in the manner provided herein.

SECTION 2.   Representations and Warranties.

(a) The Company represents and warrants to each Agent as of the date hereof, as of the date of each acceptance by the Company of an offer for the purchase of Notes (whether through the Agents as agents or to one or more Agents as principal), immediately before the time of sale, within the meaning of Rule 159 of the 1933 Act Regulations, of Notes to any purchaser (whether through the Agents as agents or to one or more Agents as principal), as of the date of each delivery of Notes (whether through the Agents as agents or to one or more Agents as principal) (the date of each such delivery to one or more Agents as principal being hereafter referred to as a “Settlement Date”), and as of any time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement providing solely for the establishment of or a change in, the interest rates, maturity, price or other terms of Notes or similar changes) or there is filed with the Commission any document incorporated by reference into the Prospectus (other than any Current Report on Form 8-K relating exclusively to the issuance of debt securities under the Registration Statement other than the Notes) (each of the times referenced above being referred to herein as a “Representation Date”) as follows:

(i) Registration Statement, Prospectus and Issuer Free Writing Prospectuses. The Company is a “well-known seasoned issuer” as defined in Rule 405 of the 1933 Act Regulations in respect of the Registration Statement. At the time the Registration Statement became effective, the Registration Statement complied, and as of the applicable Representation Date will comply, in all material respects with the applicable requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission promulgated

thereunder and no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with; and the Indenture has been duly qualified under the 1939 Act. The Registration Statement is an “automatic shelf registration statement,” as defined in Rule 405 of the 1933 Act Regulations, that initially became effective within three years of the applicable Representation Date, and the Company has not received from the Commission any notice pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic shelf registration form. The Registration Statement at the time it became effective did not, and at each time thereafter at which any amendment to the Registration Statement becomes effective or any Annual Report on Form 10-K is filed by the Company with the Commission and as of the applicable Representation Date, will not, considering the Registration Statement and all Incorporated Documents (as defined in Section 5(a)(4)) considered as a whole, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as of the date hereof does not, and (A) the Prospectus and (B) any applicable Issuer Free Writing Prospectus(es), considered together with the Prospectus, as of the applicable Representation Date will not, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection (i) of Section 2(a) of this Agreement shall not apply to statements in or omissions from the Registration Statement, Prospectus or any applicable Issuer Free Writing Prospectus(es) made in reliance upon and in conformity with information furnished to the Company in writing by the Agent or Agents expressly for use in the Registration Statement, Prospectus or such Issuer Free Writing Prospectus(es) or to those parts of the Registration Statement that constitute the Statements of Eligibility under the 1939 Act on Form T-1. Each Prospectus delivered to the Related Agent for use in connection with the offering of the Notes is identical to any electronically transmitted copies thereof filed with the Commission pursuant to IDEA or EDGAR, except to the extent permitted by Regulation S-T. Each applicable Issuer Free Writing Prospectus does not include any information that conflicts with the information contained in the Registration Statement. “Issuer Free Writing Prospectus,” as used in this Agreement, means any “issuer free writing prospectus,” as defined in Rule 433(h)(1) of the 1933 Act Regulations, that would be deemed to be related to the offer of Notes.

(ii) Incorporated Documents. The documents incorporated by reference in the Prospectus and in any Issuer Free Writing Prospectus, at the time such incorporated documents were filed with the Commission, complied in all material respects with the requirements of the 1934 Act and the rules and regulations promulgated thereunder (the “1934 Act Regulations”), and, when read together and with the other information in or incorporated by reference in the Prospectus,

 

did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(iii) Accountants. The accountants who certified the financial statements included or incorporated by reference in the Prospectus are independent public accountants within the meaning of the 1933 Act and the 1933 Act Regulations.

(iv) Financial Statements. The financial statements and any supporting schedules of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement, the Prospectus and any applicable Issuer Free Writing Prospectus present fairly the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and the consolidated results of their operations for the periods specified; and, except as stated therein, said financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis; and any supporting schedules included or incorporated by reference in the Registration Statement present fairly the information required to be stated therein.

(v) Due Incorporation; Authorization and Validity of this Agreement, the Indenture and the Notes. The Company (A) has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of California with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus, (B) has the requisite corporate power and authority to execute and deliver this Agreement, any Terms Agreement, the Indenture and the Notes and to perform its obligations hereunder and thereunder, (C) has duly authorized, executed and delivered this Agreement and any Terms Agreement and each of this Agreement and such Terms Agreement constitutes the valid and binding agreement of the Company, and (D) is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership or lease of substantial properties or the conduct of its business requires such qualification and in which the failure to do so would materially adversely affect the business or financial condition of the Company.

(vi) Material Changes or Material Transactions. Since the respective dates as of which information is given in the Registration Statement, the Prospectus and any applicable Permitted Free Writing Prospectus (as defined in Section 4(e) below), except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business (which includes, but is not limited to, Euromarket, Euro Asian or global financing and domestic private

 

placement and public financing), which are material with respect to the Company and its subsidiaries considered as one enterprise, and (C) since the date of the most recent audited financial statements of the Company, there has been no dividend or distribution of any kind in excess of $300 million declared, paid or made by the Company on any class of its capital stock except as otherwise described in an Incorporated Document or as disclosed in the documentation relating to a particular issuance of Notes, including the applicable pricing supplement.

(vii) Significant Subsidiaries. Each “significant subsidiary”, if any, of the Company (as such term is defined in Rule 1-02(w) of Regulation S-X under the 1933 Act) (each a “Subsidiary” and, collectively, the “Subsidiaries”) has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to 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 so to qualify or to be in good standing would not materially affect the business or financial condition of the Company; except as otherwise disclosed in the Prospectus, all of the issued and outstanding capital stock of each such Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Subsidiary was issued in violation of preemptive or similar rights of any securityholder of such Subsidiary.

(viii) The Indenture. The Indenture has been duly and validly authorized, executed and delivered by the Company and assuming it has been duly and validly authorized, executed and delivered by the Trustee, constitutes a legally valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by (1) bankruptcy, insolvency reorganization, moratorium or similar laws affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) or the application of general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, (2) requirements that a claim with respect to any Notes payable in foreign or composite currency (or a foreign or composite currency judgement in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or (3) governmental authority to limit, delay or prohibit the making of payments outside the United States.

(ix) The Notes. The Notes have been duly and validly authorized by the Company for issuance, offer and sale pursuant to this Agreement and, when

completed as contemplated by the Procedures (hereinafter defined), executed, authenticated and delivered pursuant to the provisions of the Indenture and this Agreement against payment of the consideration set forth in the Prospectus or pursuant to any Terms Agreement, will constitute legally valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) or by the application of general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, (2) requirements that a claim with respect to any Notes payable in foreign or composite currency (or a foreign or composite currency judgement in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or (3) governmental authority to limit, delay or prohibit the making of payments outside the United States and will be entitled to the benefits of the Indenture; and the Notes and the Indenture conform in all material respects to all statements relating thereto contained in the Registration Statement.

(x) No Defaults; Compliance with Laws; Regulatory Approvals. Neither the Company nor any of its Subsidiaries is in violation of its charter or bylaws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any Subsidiaries is a party or by which it may be bound, or to which any of the property or assets of the Company or any of its Subsidiaries is subject, which violation or default would materially adversely affect the business or financial condition of the Company and its Subsidiaries considered as one enterprise; and the execution, delivery and performance of this Agreement, any Terms Agreement and the Indenture and the consummation of the transactions contemplated herein and therein 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 Subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of its Subsidiaries is a party or by which it may be bound, or to which any of the property or assets of the Company or any of its Subsidiaries is subject, nor will such action result in any violation of the provisions of the charter or bylaws of the Company or any of its Subsidiaries or, to the best knowledge of the Company or any of its Subsidiaries, any law, administrative regulation or administrative or court decree, and no consent, approval, authorization, order or decree of any court or governmental agency or body of the United States is required for the consummation by the Company of the transactions contemplated by this Agreement, any Terms Agreement or the Indenture, except such as may be required under the 1933 Act or the 1933 Act Regulations or the 1939 Act or the 1939 Act Regulations or as may be required by state securities or Blue Sky laws.

 

(xi) Legal Proceedings; Contracts. Except as set forth in the Registration Statement, the Prospectus and any applicable Permitted Free Writing 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 the Company or any of its subsidiaries which is required to be disclosed in the Registration Statement or which might in the opinion of the Company result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, or which might materially and adversely affect the properties or assets thereof or which might materially and adversely affect the consummation of this Agreement or any Terms Agreement; all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective property or assets is the subject which are not described in the Registration Statement, including ordinary routine litigation incidental to its business, are, considered in the aggregate, not material; and there are no contracts or documents of the Company or any of its subsidiaries which are required to be filed as exhibits to the Registration Statement by the 1933 Act or by the 1933 Act Regulations which have not been so filed.

(xii) Licenses. The Company owns or possesses or has obtained all material governmental licenses, permits, consents, orders, approvals and other authorizations necessary to lease or own, as the case may be, and to operate its properties and to carry on its business as presently conducted where its ownership or lease of substantial properties or the conduct of its business requires such ownership or possession or the obtaining of such governmental licenses, permits, consents, orders, approvals and other authorizations and where the failure to do so would materially adversely affect the business or financial condition of the Company and its subsidiaries considered as one enterprise.

(xiii) Investment Company Act. The Company is not, and upon issuance and sale of the Notes as herein contemplated and the application of the net proceeds therefrom 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 (the “1940 Act”).

(xiv) Commodity Exchange Act. The Notes, upon issuance, will be excluded or exempted under, or beyond the purview of, the Commodity Exchange Act, as amended (the “Commodity Exchange Act”), and the rules and regulations of the Commodity Futures Trading Commission under the Commodity Exchange Act (the “Commodity Exchange Act Regulation”).

(xv) Rating of the Notes. The Company’s long term debt rating is “Aa1” by Moody’s Investors Service, Inc. and “AA+” by Standard & Poor’s Ratings Services.

(b) Additional Certifications. Any certificate signed by any director or officer of the Company and delivered to the Agents or to counsel to the Agents in connection with an offering of Notes or the sale of Notes to one or more of the Agents as principal shall be deemed a representation and warranty by the Company to the Agents as to the matters covered thereby on the date of such certificate and at each Representation Date subsequent thereto.

(c)           Selling Restrictions.  Each Agent severally represents and agrees that:

(i) In relation to each member state of the European Economic Area (each a “Member State”) which has implemented the Prospectus Directive (each such Member State, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), it has not made and will not make an offer of Notes to the public in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State:

(1) if the applicable pricing supplement in relation to the Notes specifies that an offer of those Notes may be made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State (a “Non-exempt Offer”), following the date of publication of the Prospectus in relation to Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, provided that any such prospectus has subsequently been completed by the applicable pricing supplement contemplating such Non-exempt Offer, in accordance with the Prospectus Directive, in the period beginning and ending on the dates specified in such prospectus or such pricing supplement, as applicable;

(2) at any time to any legal entity which is authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(3) at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

(4) at any time to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the relevant agent or agents nominated by the Company for any such offer; or

(5) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive.

 

Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered, so as to enable an investor to decide to purchase or subscribe for the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State,

(1) it has complied and will comply with all applicable provisions of the Financial Services and Markets Act (2000) (the “FSMA”) with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom;

(2) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue of any Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and

(3) in relation to any Notes which have a maturity of less than one year, (a) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (b) it has not offered or sold and will not offer or sell Notes other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA by the Company.

(iii) With respect to Notes that are offered and sold into Hong Kong, such Notes may not be offered or sold in Hong Kong by means of any document other than:

(1) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or

(2) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or

 

(3) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the Notes may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to Notes which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

(iv) With respect to Notes that are offered and sold into Singapore, any document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Notes may not be circulated or distributed, nor may the Notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than

(1) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”),

(2) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or

(3) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.

Where the notes are subscribed or purchased under Section 275 of the SFA by a relevant person which is (A) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (B) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the notes pursuant to an offer made under Section 275 of the SFA except (x) to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by

 

exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA; (y) where no consideration is or will be given for the transfer; or (z) where the transfer is by operation of law.

SECTION 3.          Solicitations as Agents; Purchases as Principals.

(a) Solicitations as Agents. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, when agreed by the Company and an Agent, such Agent, as an agent of the Company, will use its reasonable efforts to solicit offers for the purchase of Notes upon the terms and conditions set forth in the Prospectus. The Agents are not authorized to appoint sub-agents with respect to Notes sold through them as agent.

The Company reserves the right, in its sole discretion, to suspend solicitation of purchases of the Notes through the Agents, as agents, commencing at any time for any period of time or permanently. Upon receipt of instructions from the Company, the Agents will forthwith suspend solicitation of purchases from the Company until such time as the Company has advised the Agents that such solicitation may be resumed.

The Company agrees to pay each Agent a commission, in the form of a discount or otherwise as agreed to by the Company and the Agents, equal to the applicable percentage of the principal amount of each Note sold by the Company as a result of a solicitation made by such Agent as set forth in Schedule A hereto; provided, however, that the Company shall only be obligated to pay one such fee with respect to any particular Note so sold.

The purchase price, interest rate, maturity date and other terms of the Notes shall be agreed upon by the Company and the Agents and set forth in a pricing supplement to the Prospectus to be prepared following each acceptance by the Company of an offer for the purchase of Notes. Except as may be otherwise provided in such supplement to the Prospectus, the Notes will be issued in denominations of $1,000 and integral multiples thereof. All Notes sold through the Agents as agents will be sold at 100% of their principal amount unless otherwise agreed to by the Company and the Agents.

(b) Purchases as Principal. Notes purchased from the Company by an Agent individually or as part of a syndicate with one or more other Agents, as principal shall be made in accordance with the terms contained herein and, if requested by such Agent, pursuant to a separate agreement which will provide for the sale of such Notes to, and the purchase and reoffering thereof by, such Agent. Each such separate agreement (which may be an oral agreement) between one or more Agents and the Company is herein referred to as a “Terms Agreement.” Unless the context otherwise requires, each reference contained herein to “this Agreement” shall be deemed to include any Terms Agreement between the Company and one or more Agents. Each such Terms Agreement, whether oral or in writing, shall be with respect to such information (as applicable) as is specified in Exhibit A hereto. An Agent’s commitment to purchase Notes as principal shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained, and the Company’s agreement to sell Notes to an Agent as principal shall be deemed to have been made on the basis of the

 

representations and warranties of such Agent herein contained, and each such commitment shall be subject to the terms and conditions herein set forth and, as applicable, as set forth in any Terms Agreement. Each Terms Agreement shall specify the principal amount of Notes to be purchased by each Agent pursuant thereto, the price to be paid to the Company for such Notes (which, if not so specified in such Terms Agreement, shall be at a discount equivalent to the applicable commission set forth in Schedule A hereto), the time and place of delivery of and payment for such Notes, if the trade is being made with two or more Agents, the applicable default provisions in the event of a default by one or more of the Agents (if different from the provisions set forth in the following paragraph), and such other provisions (including further terms of the Notes) as may be mutually agreed upon. The Agents may engage the services of any broker or dealer in connection with the resale of the Notes purchased by them as principal and may allow all or any portion of the discount received from the Company in connection with such purchases to such brokers or dealers. Such Terms Agreement shall also specify whether or not any of the officer’s certificate, opinions of counsel or comfort letter specified in Sections 7(b), 7(c) and 7(d) hereof shall be required to be delivered by the Company on the related Settlement Date.

If the Company and two or more Agents enter into an agreement pursuant to which such Agents agree to purchase Notes as part of a syndicate and one or more of such Agents shall fail at the Settlement Date to purchase the Notes which it or they are obligated to purchase (the “Defaulted Notes”), then the nondefaulting Agents shall have the right, within 24 hours thereafter, to make arrangements for one of them or one or more other Agents or underwriters to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if such arrangements shall not have been completed within such 24-hour period, then:

(i) if the aggregate principal amount of Defaulted Notes does not exceed 10% of the aggregate principal amount of Notes to be so purchased by all of such Agents on the Settlement Date, the nondefaulting Agents shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective initial underwriting obligations bear to the underwriting obligations of all nondefaulting Agents; or

(ii) if the aggregate principal amount of Defaulted Notes exceeds 10% of the aggregate principal amount of Notes to be so purchased by all of such Agents on the Settlement Date, such agreement to purchase such Notes shall terminate without liability on the part of any nondefaulting Agents.

No action taken pursuant to this paragraph shall relieve any defaulting Agent from liability in respect of its default. In the event of any such default which does not result in a termination of such agreement, either the nondefaulting Agents or the Company shall have the right to postpone the Settlement Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or the Prospectus or in any other documents or arrangements.

(c) Administrative Procedures. Administrative procedures with respect to the sale of Notes shall be agreed upon from time to time by the Agents and the Company (the

 

“Procedures”). Each Agent and the Company agree to perform the respective duties and obligations specifically provided to be performed by them in the Procedures.

(d) Delivery of Closing Documents. The documents required to be delivered by Section 5 hereof shall be delivered at the office of O’Melveny & Myers LLP, 400 South Hope Street, Los Angeles, California 90071 on the date hereof, or at such other time or place as the Agents and the Company may agree.

SECTION 4.   Covenants of the Company.

The Company covenants with the Agents as follows:

(a) Notice of Certain Events. The Company will promptly notify (i) the Agents of the effectiveness of any amendment to the Registration Statement, (ii) each Related Agent of the transmittal to the Commission for filing of any supplement to the Prospectus (relating to Notes that the Related Agent is offering and selling as agent or purchasing as principal hereunder) or any document to be filed pursuant to the 1934 Act which will be incorporated by reference in the Prospectus (other than any Current Report on Form 8-K relating exclusively to Notes that the Related Agent is not offering and selling as agent nor purchasing as principal hereunder) or any Issuer Free Writing Prospectus, (iii) the Agents of the receipt of any comments from the Commission with respect to the Registration Statement or the Prospectus, (iv) the Agents of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus (relating to Notes that the Related Agent is offering and selling as agent or purchasing as principal hereunder) or for additional information, (v) the Agents of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, or of the receipt by the Company from the Commission of any notice pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic shelf registration statement form with respect to the Registration Statement; and (vi) the Agents of any change in the rating assigned by any nationally recognized statistical rating organization to any debt securities (including the Notes) of the Company, or the public announcement by any nationally recognized statistical rating organization that it has under surveillance or review, with possible negative implications, its rating of any such debt securities, or the withdrawal by any nationally recognized statistical rating organization of its rating of any such debt securities since the date of this Agreement. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

(b) Notice of Certain Proposed Filings. Except as otherwise provided in subsection (m) of this Section 4, the Company will (A) give the Agents notice of its intention to file or prepare any additional registration statement with respect to Notes, any amendment to the Registration Statement or any amendment or supplement to the Prospectus (other than an amendment or supplement providing solely for the establishment of or change in, the interest rates, maturity, price or other terms of Notes or other similar changes or an amendment or supplement which relates exclusively to an offering of debt securities under the Registration Statement other than the Notes), and (B) give each Related Agent notice of its intention to file, prepare or use any Issuer Free Writing Prospectus or any amendment or supplement thereto,

 

 

whether by the filing of documents pursuant to the 1934 Act (other than any Current Report on Form 8-K relating exclusively to Notes that the Related Agent is not offering and selling as agent nor purchasing as principal hereunder), the 1933 Act or otherwise, and will furnish each such Agent with copies of any such amendment or supplement, Issuer Free Writing Prospectus, or other documents proposed to be filed, prepared or used a reasonable time in advance of such proposed filing, preparation or use, as the case may be, and will not file or use any such amendment or supplement, Issuer Free Writing Prospectus, or other such documents in a form to which you or your counsel shall reasonably object.

(c) Copies of the Registration Statement, Prospectus and Issuer Free Writing Prospectuses. The Company will deliver to the Agents as many signed and conformed copies of the Registration Statement (as originally filed) and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated by reference in the Prospectus) as the Agents may reasonably request. The Company will furnish to each Related Agent as many copies of the Prospectus (as amended or supplemented) (relating to Notes that the Related Agent is offering and selling as agent or purchasing as principal hereunder) or any Issuer Free Writing Prospectus (relating to Notes that the Related Agent is offering and selling as agent or purchasing as principal hereunder) as the Related Agent shall reasonably request so long as the Agent is required to deliver a Prospectus in connection with sales or solicitations of offers to purchase the Notes. The Registration Statement and the Prospectus and any amendments or supplements thereto furnished to the Agents will be identical to any electronically transmitted copies thereof filed with the Commission pursuant to IDEA or EDGAR, except to the extent permitted by Regulation S-T. Any Issuer Free Writing Prospectus furnished to the Agents will be in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

(d) Preparation of Pricing Supplements. The Company will prepare, with respect to any Notes to be sold through or to the Agents pursuant to this Agreement, a Pricing Supplement with respect to such Notes in a form previously approved by the Related Agents and will file with the Commission such Pricing Supplement pursuant to Rule 424(b)(2) or Rule 424(b)(5) of the 1933 Act Regulation not later than the close of business of the Commission on the second business day after the date on which such Pricing Supplement is first used.

(e) Free Writing Prospectuses; Filing Fees. The Company will (A) not make any offer relating to Notes that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations) required to be filed with the Commission unless it obtains the prior consent of the Related Agents, and each Agent covenants with the Company that it will not make any offer relating to Notes that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations) required to be filed with the Commission unless it obtains the prior consent of the Company, (each such free writing prospectus for which consent has been obtained, a “Permitted Free Writing Prospectus”), (B) treat each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, (C) if agreed to by the Related Agents and the Company, prepare a final term sheet (the “Final Term Sheet”) reflecting the final terms of an offering of Notes, in form and substance satisfactory to each Related Agent and the Company, and shall file such Final Term Sheet as an

 

Issuer Free Writing Prospectus prior to the close of business within two days following the date such final terms are established, (D) comply with the requirements of Rules 163, 164 and 433 of the 1933 Act Regulations applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission, legending and record keeping, (E) not include any information in any Issuer Free Writing Prospectus that conflicts with the information contained in the Registration Statement, and (F) not take any action that would result in an Agent or the Company being required to file with the Commission pursuant to Rule 433(d) of the 1933 Act Regulations a free writing prospectus prepared by or on behalf of such Agent that such Agent otherwise would not have been required to file thereunder. The Company will pay the required filing fees relating to Notes to the Commission within the time required by Rule 456(b)(1) of the 1933 Act Regulations and otherwise in accordance with Rules 456(b) and 457(r) thereof.

(f) Revisions of Prospectus — Material Changes. Except as otherwise provided in subsection (m) of this Section 4, if at any time during the term of this Agreement any event shall occur or condition exist as a result of which it is necessary, in the reasonable opinion of counsel to the Agents or counsel for the Company, to further amend or supplement the Prospectus or any Issuer Free Writing Prospectus in order that the Prospectus or such Issuer Free Writing Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading in light of the circumstances existing at the time the Prospectus or such Issuer Free Writing Prospectus is delivered to a purchaser, or if it shall be necessary, in the reasonable opinion of either such counsel, to amend or supplement the Registration Statement, the Prospectus or such Issuer Free Writing Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, immediate notice shall be given, and confirmed in writing, to the Agents to cease the solicitation of offers to purchase the Notes in the Agents’ capacity as agents and to cease sales of any Notes the Agents may then own as principal pursuant to a Terms Agreement, and the Company will promptly prepare and, subject to the last clause of subsection (b) of this Section 4, file with the Commission such amendment or supplement, whether by filing documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be necessary to correct such untrue statement or omission or to make the Registration Statement, the Prospectus and such Issuer Free Writing Prospectus comply with such requirements.

(g) Prospectus Revisions — Periodic Financial Information. Except as otherwise provided in subsection (m) of this Section 4, on or prior to the date on which there shall be released to the general public interim financial statement information related to the Company with respect to each of the first three quarters of any fiscal year or preliminary financial statement information with respect to any fiscal year, the Company shall furnish such information to counsel for the Agents, and shall cause the Registration Statement and the Prospectus to be amended or supplemented, whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate by reference financial information with respect thereto and corresponding information for the comparable period of the preceding fiscal year, as well as such other information and explanation as shall be necessary for an understanding thereof or as shall be required by the 1933 Act or the 1933 Act Regulations.

(h) Prospectus Revisions — Audited Financial Information. Except as otherwise provided in subsection (m) of this Section 4, on or prior to the date on which there shall be released to the general public financial information included in or derived from the

audited financial statements of the Company for the preceding fiscal year, the Company shall cause the Registration Statement and the Prospectus to be amended, whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate by reference such audited financial statements and the report or reports, and consent or consents to such inclusion or incorporation by reference, of the independent accountants with respect thereto, as well as such other information and explanations as shall be necessary for an understanding of such financial statements or as shall be required by the 1933 Act or the 1933 Act Regulations.

(k) 1934 Act Filings. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act, will file promptly all documents required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act. Such documents will comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations and to the extent such documents are incorporated by reference in the Prospectus, when read together with the other information in or incorporated by reference into the Prospectus, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

(l) Stand-Off Agreement. If required by any Terms Agreement, between the date of any Terms Agreement and the Settlement Date with respect to such Terms Agreement, the Company will not, without the prior written consent of each Agent party to such Terms Agreement, directly or indirectly, sell, offer to sell, contract, to sell or otherwise dispose of, or announce the offering of, any debt securities of the Company denominated in the same currency as the Notes to be purchased pursuant to such Terms Agreement, or any security exchangeable into such debt securities (other than (i) the Notes that are to be sold pursuant to such Terms

Agreement (ii) securities sold in any Euro Asian or Euromarket financing, or (iii) commercial paper in the ordinary course of business).

(m) Suspension of Certain Obligations. The Company reserves the right to instruct the Agents to suspend at any time, for any period of time, the solicitation of offers to purchase the Notes from the Company. As soon as practicable, but in any event not later than one business day in New York City, after receipt of notice from the Company (such notice, if oral or telephonic, to be confirmed in writing as soon as reasonably practicable thereafter, but in any event not later than five business days in New York City after such oral or telephonic notice), the Agents will suspend solicitation of offers to purchase Notes from the Company until such time as the Company has advised the Agents that such solicitation may be resumed. During such period, the Company shall not be required to comply with the provisions of subsections (a), (b), (c), (f), (g), (h) or (k) of this Section 4 or the provisions of Section 7 hereof. Upon advising the Agents that such solicitation may be resumed, however, the Company shall simultaneously provide any documents required to be delivered by subsections (a), (b), (c), (f), (g), (h) or (k) of this Section 4 and the provisions of Section 7 hereof, and the Agents shall have no obligation to solicit offers to purchase the Notes until such documents have been received by the Agents. In addition, if the Company fails to comply with any of its obligations hereunder, except to the extent suspended as provided herein, including without limitation its obligations to deliver the documents required by subsections (a), (b), (c), (f), (g), (h) or (k) of this Section 4 or the provisions of Section 7 hereof, the Agents shall have the right to terminate their obligations hereunder, including without limitation their obligations to solicit offers to purchase the Notes hereunder as agent or to purchase Notes hereunder as principal.

(n) Use of Proceeds. The net proceeds from the sale of Notes will be used by the Company as described in the Prospectus.

(o) Selling Restrictions. The Company agrees that it will not take any action in contravention of the relevant selling restrictions applicable to an offering of Notes as set forth in Section 2(c).

SECTION 5.          Conditions of Obligations.

The obligations of the Agents to solicit offers to purchase the Notes as agents of the Company, the obligations of any purchasers of the Notes sold through the Agents as agents, and any obligation of the Agents to purchase Notes as principals pursuant to a Terms Agreement or otherwise will be subject to the accuracy of the representations and warranties on the part of the Company herein contained and to the accuracy of the statements of the Company’s officers made in any certificate furnished pursuant to the provisions hereof, to the performance and observance by the Company of all its covenants and agreements herein contained and to the following additional conditions precedent:

(a) Legal Opinions. On the date hereof, the Agents shall have received the following legal opinions, dated as of the date hereof and in form and substance satisfactory to the Agents and their counsel:

(1) Opinion of Company Counsel. The opinion of the General Counsel for the Company to the effect that:

 

(i) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California.

(ii) The Company has the corporate power and corporate authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Prospectus and in each document filed pursuant to the 1934 Act and incorporated by reference into the Prospectus.

(iii) This Agreement and any applicable Terms Agreement have each been duly authorized by all necessary corporate action on the part of the Company, and have each been duly executed and delivered by the Company.

(iv) The Indenture has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company and the Indenture has been qualified under the 1939 Act. If California law were to apply, the Indenture would constitute a legally valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) or by the application of general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, (2) requirements that a claim with respect to any Notes payable in foreign or composite currency (or a foreign or composite currency judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law, (3) governmental authority to limit, delay or prohibit the making of payments outside the United States or payments in which designated foreign countries, entities or nationals have an interest; and (4) the unenforceability under certain circumstances of (a) any indemnification provisions, (b) broadly or vaguely stated waivers or waivers of rights granted by law where the waivers are against public policy or prohibited by law; (c) choice of law provisions and (d) severability provisions.

(v) The Notes (in the form of specimens certified by the Company’s Secretary and examined by such counsel) are in forms permitted by the Indenture, and have been duly authorized by all necessary corporate action on the part of the Company for issuance, offer and sale as contemplated by this Agreement. If California law were to apply, the Notes when completed as contemplated by the Procedures, executed and authenticated as specified in the Indenture and delivered against payment of the purchase price therefor pursuant to this Agreement as provided in the Prospectus and any Terms Agreement, will constitute legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance

laws) or by the application of general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, (2) requirements that a claim with respect to any Notes payable in foreign or composite currency (or a foreign or composite currency judgement in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law, (3) governmental authority to limit, delay or prohibit the making of payments outside the United States or payments in which designated foreign countries, entities or nationals have an interest or (4) the unenforceability under certain circumstances of (a) any indemnification provisions, (b) broadly or vaguely stated waivers or waivers of rights granted by law where the waivers are against public policy or prohibited by law; (c) choice of law provisions and (d) severability provisions, and the Notes will be entitled to the benefit of the Indenture.

(vi) The Registration Statement automatically became effective under the 1933 Act, the Company has not received from the Commission any notice pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic shelf registration statement form with respect to the Registration Statement and, to such counsel’s knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission.

(vii) At the time the Registration Statement became effective, the Registration Statement and the Prospectus (other than the financial statements and other financial and statistical data included or incorporated by reference therein and the Statements of Eligibility on Form T-1 filed as Exhibits thereto, as to which no opinion need be rendered) appeared on its face to comply as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the 1939 Act Regulations.

(viii) Each document filed pursuant to the 1934 Act (other than the financial statements and other financial and statistical data included therein, as to which no opinion need be rendered) and incorporated by reference in the Prospectus when filed, appeared on its face to comply as to form in all material respects with the 1934 Act and the 1934 Act Regulations thereunder in effect at the date of their filing.

(ix) The information in the Prospectus under the caption “Description of the Notes,” and “Description of Debt Securities,” to the extent that it constitutes summaries of the Notes and the Indenture, has been reviewed by such counsel and is correct in all material respects.

(x) No authorization, approval, consent or order of any court or governmental authority or agency is required in connection with the sale of the

 

Notes, except such as may be required under the 1933 Act or the 1933 Act Regulations or the 1939 Act or the 1939 Act Regulations or state securities laws.

(xi) To such counsel’s knowledge, the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership or lease of substantial properties or the conduct of its business requires such qualification and in which the failure to so qualify and be in good standing would materially adversely affect its business or financial condition.

(xii) To such counsel’s knowledge, there are no legal or governmental proceedings pending or threatened which are required to be disclosed in the Registration Statement or in each document filed pursuant to the 1934 Act and incorporated by reference in the Prospectus, other than those disclosed therein or in any Issuer Free Writing Prospectus, and all pending legal or governmental proceedings to which the Company or any of its Subsidiaries is a party or to which any of their property is subject which are not described in the Registration Statement or in each document filed pursuant to the 1934 Act and incorporated by reference in the Prospectus or in any Issuer Free Writing Prospectus, including ordinary routine litigation incidental to the business, are, considered in the aggregate, not material.

(xiii) To such counsel’s knowledge, no default exists in the due performance or observance by the Company of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument described or referred to in the Registration Statement or filed as an exhibit thereto or incorporated by reference therein, which default would have a material adverse effect on the financial condition, earnings, business affairs, business prospects, properties or results of operations of the Company and its subsidiaries considered as one enterprise.

(xiv) The execution and delivery of this Agreement, any Terms Agreement, the Indenture, the Notes and the consummation of the transactions contemplated herein and therein will not (A) 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 subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument known to such counsel to which the Company or any of its 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 subsidiaries is subject, (B) result in any violation of the provisions of the charter or bylaws of the Company, or (C) to such counsel’s knowledge, results in any violation of any applicable law, administrative regulation or administrative or court decree.

(xv) To such counsel’s knowledge, there are no contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be

described or referred to in the Registration Statement or in each document filed, or to be filed or incorporated by reference as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof are correct in all material respects.

(2) Tax Opinion. The opinion of Davis Polk & Wardwell, as special tax counsel to the Company, to the effect that the statement in the Prospectus under the caption “United States Federal Income Taxation” (or similar caption), insofar as they purport to describe provisions of U.S. federal income tax laws or regulations or legal conclusions with respect thereto fairly and accurately summarize the matters referred to therein in all material respects.

(3) Opinion of Counsel to the Agents. The opinion of O’Melveny & Myers LLP, counsel to the Agents, covering the matters referred to in subparagraph (1) under the subheadings (i), (iii) through (vii), inclusive, of this Section 5(a) and addressing substantially the matters referred to in Section 2(a)(xiii), except that such counsel shall give the opinion in Section 5(a)(1)(iv) and (v) applying New York law to the Indenture and to the Notes.

(4) In giving their opinions required by subsection (a)(1) and (a)(3) of this Section 5, each counsel shall additionally state that they do not believe that the Registration Statement, at the time it became effective, and if an amendment to the Registration Statement or an Annual Report on Form 10-K has been filed by the Company with the Commission subsequent to the effectiveness of the Registration Statement (an “Incorporated Document”) and prior to the date of such statement, then at the time such amendment became effective or at the time of the most recent such filing of an Incorporated Document (to the extent deemed to be incorporated by reference in the Registration Statement and Prospectus), and, considering the Registration Statement and Incorporated Document as a whole, at the date hereof, or (if such opinion is being delivered in connection with a Terms Agreement pursuant to Section 7(c) hereof) at the date of any Terms Agreement and at the Settlement Date with respect thereto, as the case may be, contains or contained an untrue statement of a material fact or omits or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, that the Prospectus, as amended or supplemented at the date hereof, or (if such opinion is being delivered in connection with a Terms Agreement pursuant to Section 7(c) hereof) at the date of any Terms Agreement and at the Settlement Date with respect thereto, as the case may be, contains or contained an untrue statement of a material fact or omits or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading or (if such opinion is being delivered in connection with a Terms Agreement pursuant to Section 7(c) hereof) that any Issuer Free Writing Prospectus that would be deemed to be related to the offer of Notes, as amended or supplemented at the date of any Terms Agreement and at the Settlement Date with respect thereto, as the case may be, contains or contained an untrue statement of a material fact or omits or omitted to state a material fact necessary in order to

 

make the statements therein, in light of the circumstances under which they were made, not misleading. Such counsel may state that they express no view as to the Statements of Eligibility on Form T-1, financial statements and other financial and statistical data included or incorporated by reference in such Registration Statement, Prospectus or Issuer Free Writing Prospectus.

(b) Officer’s Certificate. At the date hereof the Agents shall have received a certificate of the President or Vice President and the chief financial or chief accounting officer of the Company, dated as of the date hereof, certifying to their best knowledge after due inquiry that (i) since the respective dates as of which information is given in the Registration Statement, the Prospectus and any applicable Permitted Free Writing Prospectus or since the date of any Terms Agreement, there has not been any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, (ii) the other representations and warranties of the Company contained in Section 2 hereof are true and correct with the same force and effect as through expressly made at and as of the date of such certificate, (iii) the Company has performed or complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the date of such certificate, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and, to their knowledge, no proceedings for that purpose have been initiated or threatened by the Commission.

(c) Comfort Letter. On the date hereof, the Agents shall have received a letter from PricewaterhouseCoopers LLP, dated as of the date hereof and in form and substance previously agreed to by the Company and the Agents.

(d) Other Documents. On the date hereof and on each Settlement Date with respect to any Terms Agreement, counsel to the Agents shall have been furnished with such documents and opinions as such counsel may reasonably require for the purpose of enabling such counsel to pass upon the issuance and sale of Notes as herein contemplated and related proceedings, or in order to evidence the accuracy and completeness of any of the representations and warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of Notes as herein contemplated shall be satisfactory in form and substance to the Agents and to counsel to the Agents.

If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement (or, at the option of the Agents, any Terms Agreement) may be terminated by the Agents by notice to the Company at any time and any such termination shall be without liability of any party to any other party, except that the covenant regarding provision of any earnings statement set forth in Section 4(i) hereof, the provisions concerning payment of expenses under Section 10 hereof, the indemnity and contribution agreements set forth in Sections 8 and 9 hereof, the provisions concerning the representations, warranties and agreements to survive delivery set forth in Section 11 hereof and the provisions set forth under “Parties” of Section 15 hereof shall remain in effect.

SECTION 6.          Delivery of and Payment for Notes Sold through the Agents.

Delivery of Notes sold through an Agent as agent shall be made by the Company to such Agent for the account of any purchaser only against payment therefor in immediately available funds. In the event that a purchaser shall fail either to accept delivery of or to make payment for a Note on the date fixed for settlement, the Agent shall promptly notify the Company and deliver the Note to the Company, and, if the Agent has theretofore paid the Company for such Note, the Company will promptly return such funds to the Agent. If such failure occurred for any reason other than default by the Agent in the performance of its obligations hereunder, the Company will reimburse such Agent on an equitable basis for its reasonable loss of the use of the funds for the period such funds were credited to the Company’s account.

SECTION 7.          Additional Covenants.

(a)           Reaffirmation of Representations and Warranties.

(i) The Company covenants and agrees with the Agents that (1) each acceptance by it of an offer for the purchase of Notes, and each delivery of Notes to one or more Agents pursuant to this Agreement or a Terms Agreement, shall be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement and in any certificate theretofore delivered to the Agents pursuant hereto (except to the extent such representations and warranties relate exclusively to Notes not then being so offered and purchased) are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representations and warranties will be true and correct at the time of delivery to the purchaser or its agent, or to the Agent or Agents, of the Note or Notes relating to such acceptance or sale, as the case may be, as though made at and as of each such time (and it is understood that such representations and warranties shall relate to the Registration Statement and Prospectus as amended and supplemented to each such time); and (2) subject to the provisions of Section 4(m) hereof, each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement providing solely for the establishment of the terms of Notes or a change in the interest rates, maturity or price of Notes or similar changes, and other than by an amendment or supplement that relates exclusively to an offering of debt securities under the Registration Statement other than the Notes) or there is filed with the Commission any document incorporated by reference into the Prospectus (other than any Current Report on Form 8-K relating exclusively to the issuance of debt securities under the Registration Statement other than the Notes), such amendment, supplement or filing, as the case may be, shall be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement and in any certificate theretofore delivered to the Agents pursuant hereto are true and correct at the time of such amendment, supplement or filing, as the case may be, and an undertaking that such representations and warranties will be true and correct as though made at and as of each such time.