respect to the issue and sale by the Company of its Medium-Term Notes, Series C (the “Notes”).  The Notes are to be issued pursuant to the Indenture, dated as of September 24, 2001 (the “Indenture”), between the Company and Wells Fargo Bank, N.A., a national banking association, as trustee (the “Trustee”).  As of the date hereof, the Company has authorized the issuance and sale of up to U.S. $5,000,000,000 aggregate initial offering price (or its equivalent, based upon the applicable exchange rate at the time of issuance, in such foreign currencies or composite currencies as the Company shall designate in the Notes at the time of issuance) of Notes directly or through the Agents pursuant to the terms of this Agreement.  Such Notes are in addition to other Medium-Term Notes of the Company outstanding at the date hereof. It is understood, however, that the Company may from time to time authorize the issuance of additional Notes and that, at the option of the Company, such Notes may be distributed through or sold to the Agents pursuant to the terms of this Agreement, all as though the issuance of such Notes were authorized as of the date hereof.

 

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 purchasers, and (as may from time to time be agreed to by the Company and one or more Agents) to such Agent or Agents as principal for resale to purchasers.

 

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (No. 333-122139) for the registration of debt securities and other 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 been declared effective by the Commission 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 that may be filed by the Company for the purpose of registering additional Notes and which the Company and the Agents agree is to be covered by this Agreement) and the prospectus constituting a part thereof, together with any prospectus supplement relating to the Notes, including, in each case, all Incorporated Documents (as hereinafter defined), as from time to time amended or supplemented by the filing of documents pursuant to the Securities Exchange Act of 1934, as amended (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.  The term “Prospectus” shall also include any term sheet or abbreviated term sheet as such terms are used in Rule 434 of the 1933 Act Regulations (each a “Terms Sheet”).  The term “Registration Statement” shall also include any related registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations.  In addition, any reference herein to the Registration Statement or the Prospectus shall be deemed to refer to and include, in addition to the information expressly set forth therein, only the Company’s Annual Report on Form 10-K filed with the Commission for the most recently completed fiscal year (the “Annual Report”), and the documents, financial statements and schedules filed subsequent to the last day of such fiscal year incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, and any reference to any amendment or supplement to the Registration Statement or

 

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the Prospectus shall be deemed to refer to and include any documents, financial statements and schedules filed by the Company with the Commission under the 1934 Act after the date hereof, and so incorporated by reference or deemed incorporated by reference (such incorporated documents, financial statements and schedules being herein called the “Incorporated Documents”).  Notwithstanding the foregoing, for purposes of this Agreement any prospectus or prospectus supplement or any Term Sheets prepared or filed with respect to an offering pursuant to the Registration Statement of securities other than the Notes shall not be deemed to have supplemented the Prospectus.

 

SECTION 1.           Representations and Warranties; Additional Certificates .

 

(a)                                   Representations and Warranties .  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 an Agent as agent or from an Agent as principal), as of the date of each delivery of Notes by the Company to the purchasers (the date of each such delivery to an Agent as principal being hereafter referred to as a “Settlement Date”), and as of the dates referred to in Section 6(a) hereof (each of the dates referenced above being referred to hereafter as a “Representation Date”), as follows:

 

(i)                                      The Incorporated Documents, when they became effective or were filed (or, if an amendment with respect to any such Incorporated Document was filed or became effective, when such amendment was filed or became effective) with the Commission, as the case may be, complied in all material respects with the requirements of the 1934 Act, and any Incorporated Documents filed subsequent to the date hereof and prior to the termination of the offering of the Notes, will, when they are filed with the Commission, comply in all material respects with the requirements of the 1934 Act; no such Incorporated Document, when it became effective or was filed (or, if an amendment with respect to any such Incorporated Document was filed or became effective, when such amendment was filed or became effective) with the Commission, contained, and no Incorporated Document filed subsequent to the date hereof and prior to the termination of the offering of the Notes will contain, an untrue statement of a material fact or omitted, or will omit, to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(ii)                                   The Registration Statement, at the later of the time it became effective and the date the most recent Annual Report was filed with the Commission, complied in all material respects with the provisions of the 1933 Act and the 1933 Act Regulations; at the applicable Representation Date, the Registration Statement and the Prospectus, and any supplements or amendments thereto, will comply in all material respects with the provisions of the 1933 Act and the 1933 Act Regulations; and the Registration Statement and the Prospectus, and any such supplement or amendment thereto, at all such times did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; except that this representation and warranty does not apply to statements or omissions in the Registration Statement, the Prospectus or any preliminary prospectus, or any amendment or

 

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supplement thereto, made in reliance upon information furnished to the Company in writing by or on behalf of the Agents expressly for use therein or to those parts of the Registration Statement which constitute the Trustee’s Statement of Eligibility and Qualification on Form T-1 under the 1939 Act (the “Form T-1”).  There is no contract or document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required.

 

(iii)                                This Agreement, the Indenture, the Notes and any applicable Terms Agreement have been duly authorized by the Company and conform in all material respects to the descriptions thereof in the Prospectus.

 

(iv)                               The Indenture (assuming due execution and delivery thereof by the Trustee) is, and the Notes (when executed by the Company and authenticated in accordance with the Indenture and delivered to and paid for by the purchasers thereof) will be, the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors’ rights generally, (B) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law), (C) requirements that a claim with respect to any Notes denominated other than in United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law and (D) governmental authority to limit, delay or prohibit the making of payments outside the United States or in a foreign currency or composite currency.  The Notes (when executed by the Company and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the purchasers thereof) will be entitled to the benefits of the Indenture (subject to the exceptions set forth in the preceding sentence).

 

(v)                                  The Company is a validly existing corporation in good standing under the laws of Delaware.  The Company has full corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and 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 consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise.

 

(vi)                               Each of Disney Enterprises, Inc., ABC, Inc. and Walt Disney World Co. (collectively, the “Significant Subsidiaries”) is a validly existing corporation in good standing under the laws of its state of incorporation.  Each of the Significant Subsidiaries has full corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus; and each of the Significant Subsidiaries is duly qualified as a foreign corporation to transact business and is in good standing in each United States jurisdiction in which such

 

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qualification is required whether by reason of the ownership or leasing of property or the conduct of business, except where a failure to so qualify would not have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise.

 

(vii)                            Except as contemplated in the Prospectus or reflected therein by the filing of any amendment or supplement thereto or any Incorporated Document, since the date of the most recent consolidated financial statements included or incorporated by reference in the Registration Statement and the Prospectus, unless the Company has notified the Agents as provided in Section 3(d) hereof, there has not been any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise.

 

(viii)                         The Company is not in violation of its Restated Certificate of Incorporation or Bylaws, as amended.  The execution and delivery of this Agreement by the Company, the issuance and sale of the Notes and the performance by the Company of its obligations under this Agreement, the Indenture and any applicable Terms Agreement will not conflict with or constitute a breach of or a default (with the passage of time or otherwise) under (A) the Restated Certificate of Incorporation or Bylaws, as amended, of the Company, (B) subject to the Company’s compliance with any applicable covenants pertaining to its incurrence of unsecured indebtedness contained therein, any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company is a party or by which it may be bound, or to which any of the properties or assets of the Company is subject, which breach or default would, singly or in the aggregate, have a material adverse effect on the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise, or (C) any applicable law, administrative regulation or administrative or court decree.  Except for orders, permits and similar authorizations required under or by the securities or Blue Sky laws of certain jurisdictions, any securities exchange on which any of the Notes might be listed or with respect to Notes which are to be indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index, no consent, approval, authorization or other order of any regulatory body, administrative agency or other governmental body is legally required for the valid issuance and sale of the Notes. As of the date of each acceptance by the Company of an offer for the purchase of Notes and as of the date of each delivery of Notes by the Company, the Company by such acceptance or delivery, as the case may be, shall be deemed to represent and warrant to the Agents that, both immediately before and immediately after giving effect to such acceptance or delivery, the Company shall be in compliance with the requirements of any applicable covenants pertaining to its incurrence of unsecured indebtedness contained in the agreements or instruments referred to in clause (B) above.

 

(ix)                                 To the best of the Company’s knowledge, the accountants who have audited and reported upon the financial statements filed with the Commission as part of the Registration Statement and the Prospectus are an independent registered public accounting firm as required by the 1933 Act.  The historical financial statements included in the Registration Statement or Prospectus or incorporated therein by reference fairly present the consolidated financial position and results of operations of the Company and

 

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its subsidiaries at the respective dates and for the respective periods to which they apply.  Such historical financial statements have been prepared in accordance with generally accepted accounting principles consistently applied, except as set forth in the Registration Statement and Prospectus.  The unaudited pro forma financial statements, if any, together with the related notes and any supporting schedules included or incorporated by reference in the Registration Statement and the Prospectus, fairly present the information shown therein and have been compiled on a basis substantially consistent with the audited financial statements of Disney included or incorporated by reference in the Registration Statement and the Prospectus; the assumptions on which such unaudited pro forma financial statements have been prepared are reasonable; and such unaudited pro forma financial statements have been prepared, and the pro forma adjustments set forth therein have been applied, in accordance with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations (including, without limitation, Regulations S-X promulgated by the Commission), and such pro forma adjustments have been properly applied to the historical amounts in the compilation of such statements.

 

(b)                                  Additional Certifications .  Any certificate signed by any officer of the Company and delivered to an Agent or to counsel for the Agents in connection with an offering of Notes shall be deemed a representation and warranty by the Company to such Agent as to the matters covered thereby on the date of such certificate.

 

SECTION 2.           Solicitations as Agents; Purchases as Principals .

 

(a)                                   Solicitations as Agents .  Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Notes directly on its own behalf and to any person, to sell Notes through others (provided that any other agent will execute an agreement with the Company which contains substantially the same terms and conditions contained herein), and to designate and select additional agents to become party to this Agreement, the Company hereby (i) appoints each Agent as an agent of the Company for the purpose of soliciting offers to purchase the Notes from the Company by others and (ii) agrees that whenever the Company determines to sell Notes directly to an Agent as principal for resale to others, it will enter into a Terms Agreement relating to such sale in accordance with the provisions of Section 2(b) hereof.  Without the prior written consent of the Company, the Agents are not authorized to appoint sub-agents or to engage the services of any other broker or dealer in connection with the offer or sale of the Notes; provided, that without the Company’s consent, the Agents may solicit offers to purchase the Notes from other brokers or dealers.  In connection with the solicitation of offers to purchase Notes, without the prior consent of the Company, the Agents are not authorized to provide any written information relating to the Company to any prospective purchaser other than the Prospectus and the Incorporated Documents.  Each Agent will make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes from the Company has been solicited by such Agent, as 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.

 

The Company reserves the right, in its sole discretion, to suspend the solicitation of offers to purchase the Notes through the Agents commencing at any time for any period of time or permanently. Upon receipt of instructions from the Company, the Agents will, as soon as

 

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possible, suspend the solicitation of offers to purchase the Notes 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, which such Agent is hereby authorized to deduct from the sales proceeds of each Note sold by the Company as a result of a solicitation made by such Agent, equal to the applicable percentage of the principal amount of each such Note, as set forth in Exhibit A hereto.  Without the consent of the Company, no Agent, as an agent, may reallow any portion of the commission payable pursuant hereto to dealers or purchasers in connection with the offer and sale of any Notes.

 

As an agent, each Agent is authorized, except during periods of suspension as provided in this Agreement, to solicit offers to purchase the Notes.  Each Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Notes received by such Agent, as agent.  Each Agent shall have the right in its discretion reasonably exercised to reject any offer to purchase the Notes received by such Agent which it does not deem reasonable, and any such rejection shall not be deemed a breach of such Agent’s agreements contained herein.  The Company shall have the sole right to accept offers to purchase the Notes and may reject any such offer in whole or in part, and any such rejection shall not be deemed to be a breach of any agreement of the Company contained herein.  The purchase price, interest rate, maturity date and other terms of the Notes agreed upon by the Company shall be 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 (a “Pricing Supplement”). Except as may be otherwise provided in any Pricing Supplement, each Note will be issued in the denomination of U.S. $1,000 or any amount in excess thereof which is an integral multiple of U.S. $1,000. All Notes will be sold at 100% of their principal amount unless otherwise agreed to by the Company.  Each Agent acknowledges and agrees that any funds which such Agent receives in respect of a purchase of Notes, which purchase has been solicited by such Agent, as agent of the Company, will be received, held and disposed of by such Agent, as agent of the Company, subject to the right of such Agent to deduct from the sale proceeds the applicable commission as set forth on Exhibit A hereto.

 

If requested by a prospective purchaser of Notes denominated in a currency other than U.S. dollars, the Agent soliciting the offer to purchase will use its reasonable efforts to arrange for the conversion of U.S. dollars into such currency to enable the purchaser to pay for such Notes.  Such requests must be made on or before the third business day preceding the date of delivery of the Notes, or by such other dates as determined by such Agent.  Each such conversion will be made by the relevant Agent on such terms and subject to such conditions, limitations and charges as such Agent may from time to time establish in accordance with its regular foreign exchange practice. All costs of exchange will be borne by purchasers of the Notes.

 

(b)                                  Purchases as Principal .  Each sale of Notes to an Agent as principal shall be made in accordance with the terms contained herein and pursuant to a separate agreement which will provide for the sale of such Notes to, and the purchase and any reoffering thereof by, such Agent.  Each such separate agreement (which may be an oral agreement if confirmed within 24 hours thereafter by an exchange of any standard form of written telecommunication (including facsimile transmission) between the Agent and the Company) is herein referred to as a “Terms Agreement.” Unless the context otherwise requires, each reference contained herein to “this

 

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Agreement” shall be deemed to include any applicable Terms Agreement between the Company and the Agent.  Each such Terms Agreement, whether oral (and confirmed in writing, which confirmation may be by facsimile transmission) or in writing shall be with respect to such information (as applicable) as is specified in Exhibit B hereto. An Agent’s commitment to purchase Notes pursuant to any Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth.  The Agents may offer the Notes they have purchased as principal to other dealers.  The Agents may sell Notes to any dealer at a discount and, unless otherwise specified in the applicable Terms Agreement, such discount allowed to any dealer will not be in excess of the discount to be received by such Agent from the Company. Unless otherwise specified in the applicable Terms Agreement, any Notes sold to an Agent as principal will be purchased by such Agent at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to any agency sale of a Note of identical maturity.

 

(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”).  The Procedures initially agreed upon shall be those set forth in Exhibit C hereto.  The Agents and the Company agree to perform the respective duties and obligations specifically provided to be performed by the Agents and the Company herein and in the Procedures.

 

SECTION 3.           Covenants of the Company .  The Company covenants with each Agent as follows:

 

(a)                                   Notice of Certain Events .  The Company will notify the Agents promptly of (i) the designation and selection of additional agents to become party to this Agreement, (ii) the designation and selection of additional agents for the sale of Notes pursuant to any agreement other than this Agreement, (iii) the effectiveness of any post-effective amendment to the Registration Statement (other than a post-effective amendment relating solely to an offering of debt securities other than the Notes), (iv) the transmittal to the Commission for filing of any supplement to the Prospectus (other than a Pricing Supplement or a supplement relating solely to an offering of securities other than the Notes), (v) the receipt of any comments from the Commission with respect to the Registration Statement or the Prospectus (other than any comments relating solely to an offering of securities other than the Notes), (vi) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information (other than any such request relating solely to an offering of securities other than the Notes) and (vii) 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.  The Company will make every reasonable effort to prevent the issuance of any such stop order and, if any such stop order is issued, to obtain the lifting thereof at the earliest possible time unless the Company shall, in its sole discretion, determine that it is not in its best interest to do so.

 

(b)                                  Notice of Certain Proposed Filing . At or prior to the filing thereof, the Company will give the Agents notice of its intention to file any additional registration statement with respect to the registration of additional Notes to be covered by this Agreement, any amendment to the Registration Statement or any amendment or

 

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supplement to the Prospectus (other than a Pricing Supplement or an amendment or supplement relating solely to an offering of debt securities other than the Notes), whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, and will furnish the Agents with copies of any such amendment or supplement or other documents promptly after the filing thereof.

 

(c)                                   Copies of the Registration Statement and the Prospectus .  The Company will deliver to the Agents one signed and as many conformed copies of the Registration Statement (as originally filed) and of each amendment thereto (including the Incorporated Documents and any exhibits filed therewith or incorporated by reference therein) as the Agents may reasonably request.  The Company will furnish to the Agents as many copies of the Prospectus (as amended or supplemented) as the Agents shall reasonably request so long as the Agents are required to deliver a Prospectus in connection with sales or solicitations of offers to purchase the Notes.

 

(d)                                  Revisions of Prospectus — Material Changes . So long as the Agents are required to deliver a Prospectus in connection with sales or solicitations of offers to purchase the Notes, if any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Company, after consultation with counsel for the Agents, to further amend or supplement the Prospectus in order that the 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, in light of the circumstances existing at the time it is delivered to a purchaser, not misleading, or if it shall be necessary, in the opinion of such counsel for the Company, to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, prompt notice shall be given, and confirmed in writing, to the Agents to cease the solicitation of offers to purchase the Notes in their capacity as agents and to cease sales of any Notes the Agents may then own as principal.  In addition, if any Agent holds Notes purchased for resale pursuant to a Terms Agreement and the Company has given notice to the Agents pursuant to this subsection (d) within 90 days after the date of execution of such Terms Agreement, the Company will prepare and file as soon as practicable an amendment or supplement to the Prospectus so that the Prospectus, as amended or supplemented, will not include any 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 it is delivered to the Agents.

 

(e)                                   Compliance with 1934 Act; Accountants’ Consents .  The Company will (i) comply, in a timely manner, with all applicable requirements under the 1934 Act relating to the filing with the Commission of the Company’s reports pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and, if then applicable, of the Company’s proxy statements pursuant to Section 14 of the 1934 Act and (ii) use its best efforts to obtain the written consent of the Company’s independent registered public accounting firm as to the incorporation by reference in the Registration Statement of the audited financial statements reported on by them and contained in the Company’s annual reports on Form 10-K under the 1934 Act.

 

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(f)                                     Earnings Statements .  The Company will make generally available to its security holders, in each case as soon as practicable but in any event not later than 15 months after the acceptance by the Company of an offer to purchase Notes hereunder, a consolidated earnings statement (which need not be audited) covering the twelve-month period beginning after the latest of (i) the effective date of the Registration Statement, (ii) the effective date of the most recent post-effective amendment to the Registration Statement to become effective prior to the date of such acceptance and (iii) the date of the Company’s most recent annual report on Form 10-K filed with the Commission prior to the date of such acceptance, which earnings statement will satisfy the provisions of Section 11 (a) of the 1933 Act (and, at the option of the Company, Rule 158 of the 1933 Act Regulations). Nothing in this Section 3(f) shall require the Company to make such earnings statement available more frequently than once in any period of twelve months.

 

(g)                                  Blue Sky Qualifications .  The Company will endeavor, in cooperation with the Agents, to qualify the Notes for offering and sale under the applicable securities laws of such states and other jurisdictions of the United States as the Agents may reasonably designate, and will maintain such qualifications in effect for as long as may be required for the distribution of the Notes; provided , however , that the Company will promptly notify the Agents of any suspension or termination of any such qualifications, and provided , further , that the Company shall not be obligated to register or qualify as a foreign corporation or take any action which would subject it to general service of process in any jurisdiction where it is not now so subject.

 

(h)                                  Suspension of Certain Obligations .  The Company shall not be required to comply with the provisions of subsections (b), (c), (d), (e) or (g) of this Section 3 during any period from the time the Agents shall have been notified to suspend the solicitation of offers to purchase the Notes in their capacity as agents or resales of Notes purchased pursuant to a Terms Agreement to the time the Company shall determine that the solicitation of offers to purchase the Notes through any Agent or Agents or resales as principal of Notes purchased pursuant to a Terms Agreement by any Agent or Agents should be resumed. Notwithstanding the foregoing, if any Agent holds Notes purchased for resale pursuant to a Terms Agreement the Company shall comply with the provisions of subsections (b), (c), (d), (e) and (g) of this Section 3 during the 90 day period from and including the date of execution of such Terms Agreement; provided , however , that the Company shall have the right, in its reasonable business judgment, to suspend such compliance during such 90 day period for an aggregate of up to 45 days, in which event such 90 day period shall be extended by the greater of (i) the number of days included in any such period of suspension and (ii) 30 days.

 

SECTION 4.           Payment of Expenses .  The Company will pay all expenses incident to the performance of its obligations under this Agreement, including:

 

(a)                                   The preparation and filing of the Registration Statement and all amendments thereto and the Prospectus and any amendments or supplements thereto and all Incorporated Documents;

 

(b)                                  The preparation, filing and printing of this Agreement;

 

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(c)                                   The preparation, printing, issuance and delivery of the Notes;

 

(d)                                  The fees and disbursements of the Trustee and its counsel, of any calculation agent or exchange rate agent and of The Depository Trust Company;

 

(e)                                   The reasonable fees and disbursements of counsel to the Agents incurred in connection with the execution and delivery of this Agreement and in connection with the review of subsequent deliveries pursuant to this Agreement;

 

(f)                                     The qualification of the Notes under securities laws in accordance with the provisions of Section 3(g) hereof, including filing fees and the reasonable fees and disbursements of counsel to the Agents in connection therewith and in connection with the preparation of any Blue Sky survey;

 

(g)                                  The printing and delivery to the Agents in quantities as hereinabove stated of copies of the Registration Statement and any amendments thereto, and of the Prospectus and any amendments or supplements thereto, and the delivery by the Agents of the Prospectus and any amendments or supplements thereto in connection with solicitations of offers to purchase, or confirmations of sales of, the Notes;

 

(h)                                  Any fees charged by rating agencies for the rating of the Notes;

 

(i)                                      Any advertising and other out-of-pocket expenses of the Agents incurred with the prior written approval of the Company; and

 

(j)                                      Reasonable fees and disbursements in connection with the subsequent delivery of legal opinions pursuant to Section 6(b) hereof.

 

SECTION 5.           Conditions of Obligations .  The obligations of any Agent to solicit offers to purchase the Notes as agent of the Company and the obligations of any Agent to purchase Notes pursuant to any Terms Agreement will be subject at all times to the accuracy, as of the applicable Representation Date, of the representations and warranties on the part of the Company herein and to the accuracy, as of the date made, 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 covenants and agreements herein contained on its part to be performed and observed, and to the following additional conditions precedent:

 

(a)                                   Opinion of Counsel to Company .  On the date hereof, the Agents shall have received an opinion from Dewey Ballantine LLP, counsel to the Company, dated as of the date hereof and in form and substance satisfactory to counsel for the Agents to the effect that:

 

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

 

(ii)                                   The Company has the corporate power and corporate authority to enter into and perform its obligations under this Agreement and the Indenture, to

 

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borrow money as contemplated in this Agreement and the Indenture, and to issue, sell and deliver the Notes.

 

(iii)                                This Agreement has been duly authorized, 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 duly executed and delivered by the Company and constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to the qualification that the enforceability of the Indenture is subject to and may be limited by (a) applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws relating to or affecting the enforcement of creditors’ rights generally, (b) general principles of equity, regardless of whether such enforceability is considered in a proceeding at law or in equity, (c) provisions of law which may require that a judgment for money damages rendered by a court in the United States be expressed only in United States dollars, (d) requirements that a claim with respect to any Notes denominated other than in U.S. dollars (or a judgment denominated other than in U.S. dollars 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 and (e) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currency, currency units or composite currencies.

 

(v)                                  No Governmental Approval is required on the part of the Company in connection with the issuance or sale of the Notes, other than registration thereof under the 1933 Act, the qualification of the Indenture under the 1939 Act, and such registrations or qualifications as may be necessary under the securities or Blue Sky laws of the various United States jurisdictions in which the Notes are to be offered or sold.

 

(vi)                               The Notes, when the final terms of a particular Note and its issuance and sale have been established in accordance with the provisions of the Indenture and when executed and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the purchasers thereof in accordance with the terms of this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the qualification that the enforceability of the Notes is subject to and may be limited by (a) applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws relating to or affecting the enforcement of creditors’ rights generally, (b) general principles of equity, regardless of whether such enforceability is considered in a proceeding at law or in equity, (c) provisions of law which may require that a judgment for money damages rendered by a court in the United States be expressed only in United States dollars, (d) requirements that a claim with respect to any Notes denominated other than in U.S. dollars (or a judgment denominated other than in U.S. dollars in respect of such claim) be converted into U.S. dollars at a rate of

 

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exchange prevailing on a date determined pursuant to applicable law and (e) governmental authority to limit, delay or prohibit the making of payments outside the United States or in foreign currency, currency units or composite currencies.

 

(vii)                            The Registration Statement has been declared effective under the 1933 Act and the Indenture has been qualified under the 1939 Act, and, to the best of such counsel’s knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated.

 

(viii)                         The execution and delivery of this Agreement and the Indenture by the Company, the issuance and sale of the Notes and the performance by the Company of its obligations under this Agreement and the Indenture will not (A) violate the Restated Certificate of Incorporation or Bylaws, as amended, of the Company, (B) violate any Applicable Laws or (C) breach or otherwise violate any obligation of or restriction on the Company under any judgment, decree or order, applicable to the Company and known to such counsel, of any court or Governmental Authority entered in any proceeding to which the Company was or is now a party or by which it is bound; provided, that such counsel may state that no opinion is expressed as to the securities or Blue Sky laws of the various jurisdictions in which any of the Notes are to be offered.

 

(ix)                                 The Registration Statement, as of the later of its effective date and the date the most recent Annual Report was filed with the Commission, and the Prospectus, as of the date of the prospectus supplement relating to the Notes, appeared on their face to comply as to form in all material respects with the applicable requirements of the 1933 Act and the related applicable rules and regulations of the Commission thereunder then in effect, except that in each case such counsel need not express an opinion as to (i) the Incorporated Documents, (ii) the financial statements, schedules and other financial and statistical data included or incorporated by reference therein or excluded therefrom or (iii) the exhibits to the Registration Statement, including, without limitation, the Statement of Eligibility under the 1939 Act of the Trustee on Form T-1 incorporated by reference therein (the “Form T-1”).

 

(x)                                    The statements in the Prospectus under the captions “Description of Debt Securities” and “Description of the Notes,” insofar as they purport to summarize certain provisions of the Notes and the Indenture, fairly present the information required by Form S-3.

 

In rendering the opinions set forth above, such counsel may state that, with respect to Notes the payments of principal or interest on which will be determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors, no opinion is expressed with respect to the Commodity Exchange Act, as amended, or the rules, regulations and interpretations of the Commodities Futures Trading Commission promulgated thereunder.

 

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In rendering the opinions set forth above, the term “Applicable Laws” shall mean the Delaware General Corporation Law and those laws, rules and regulations of the States of California and New York and of the United States of America which such counsel has, in the exercise of customary diligence, recognized as applicable to the Company or transactions of the type contemplated by this Agreement; the term “Governmental Authority” shall mean any California, New York, Delaware or federal executive, legislative, judicial, administrative or regulatory body; and the term “Governmental Approval” shall mean any order, consent, permit or approval of any Governmental Authority pursuant to Applicable Laws.

 

In addition, such counsel may state that such counsel has not undertaken to determine independently, and therefore does not assume any responsibility explicitly or implicitly for, the accuracy, completeness or fairness of the statements contained or incorporated by reference in the Registration Statement and Prospectus (except as set forth in clause (x) above).  Such counsel may also state that such counsel has participated in conferences with representatives of the Company and the Agents in the course of the preparation of the Registration Statement and Prospectus and has considered the matters required to be stated therein and the statements contained therein.  However, such counsel shall state that, based upon and subject to the foregoing, nothing has come to such counsel’s attention that causes such counsel to believe that the Registration Statement, as of the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as of the date of this Agreement (and, if the opinion is being given pursuant to Section 6(b) hereof as a result of the Company having entered into a Terms Agreement, as of the Settlement Date with respect to such Terms Agreement) includes an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except in each case as to the financial statements and schedules and other financial and statistical data included or incorporated by reference therein or excluded therefrom and, in the case of the Registration Statement, except as to exhibits thereto (including, without limitation, the Form T-1, as to all of which such counsel need express no opinion).

 

(b)                                  Opinion of Counsel Employed by Company .  On the date hereof, the Agents shall have received an opinion from David K. Thompson, Senior Vice President-Deputy General Counsel – Corporate and Corporate Secretary, or from other counsel employed by the Company (provided that such counsel is at least a Vice President of the Company), dated as of the date hereof and in form and substance satisfactory to counsel for the Agents, to the effect that:

 

(i)                                      The Company and each of the Significant Subsidiaries is a corporation validly existing and in good standing under the laws of its state of incorporation.

 

(ii)                                   Except as set forth in the Prospectus, there is not pending or, to the best of such counsel’s knowledge, after reasonable inquiry, threatened any action, suit or proceeding against the Company or any of its subsidiaries before or by any court or governmental agency or body, which is likely (to the extent not covered by insurance) to have a material adverse effect on the consolidated financial

 

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condition or earnings of the Company and its subsidiaries, considered as one enterprise.

 

(iii)                                To the best of such counsel’s knowledge, after reasonable inquiry, there is no contract or document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement which is not described or filed as required.

 

(iv)                               To the best of such counsel’s knowledge, after reasonable inquiry, the Company is not in violation of its Restated Certificate of Incorporation or Bylaws, as amended.

 

(v)                                  To the best of such counsel’s knowledge, after reasonable inquiry, the execution, delivery and performance of this Agreement and the Indenture will not conflict with or constitute a breach of, or default (with the passage of time or otherwise) under, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company 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.

 

(vi)                               Each of the Incorporated Documents, as of the date such document was filed with the Commission, complied as to form in all material respects with the requirements of the 1934 Act, except that in each case such counsel need not express an opinion as to the financial statements, schedules and other financial data included or incorporated by reference therein or excluded therefrom.

 

In addition, such counsel shall state that nothing has come to such counsel’s attention that leads him to believe that either the Registration Statement at the time such Registration Statement became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or the Prospectus as of the date of this Agreement (and, if the opinion is being given pursuant to Section 6(b) hereof as a result of the Company having entered into a Terms Agreement, as of the Settlement Date with respect to such Terms Agreement) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except that such counsel need express no opinion with respect to the financial statements, schedules and other financial data included or incorporated by reference therein or excluded therefrom or the exhibits to the Registration Statement, including the Form T-1.

 

(c)                                   Opinion of Agents’ Counsel .  On the date hereof, the Agents shall have received an opinion from counsel to the Agents, dated as of the date hereof and in form and substance satisfactory to the Agents.

 

(d)                                  Officer’s Certificate .  On the date hereof (and, if this certificate is being delivered pursuant to a Terms Agreement, as of the Settlement Date with respect to such Terms Agreement), the Agents shall have received a certificate signed by an officer of

 

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the Company, substantially in the form of Appendix I hereto and dated the date hereof, to the effect that (i) the representations and warranties of the Company contained in Section 1(a) hereof are true and correct in all material respects with the same force and effect as though expressly made at and as of the date of such certificate, (ii) the Company has complied with all agreements and satisfied all conditions required by this Agreement or the Indenture on its part to be performed or satisfied at or prior to the date of such certificate, and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or, to the best of such officer’s knowledge, threatened by the Commission.  The officer’s certificate shall further state that except as contemplated in the Prospectus or reflected therein by the filing of any amendment or supplement thereto or any Incorporated Document, at the date hereof and at each Settlement Date with respect to any Terms Agreement, there has not been, since the date of the most recent consolidated financial statements included or incorporated by reference in the Prospectus, any material adverse change in the consolidated financial condition or earnings of the Company and its subsidiaries, considered as one enterprise.

 

(e)                                   Comfort Letter .  On the date hereof, the Agents shall have received a letter from the Company’s independent registered public accounting firm, dated as of the date hereof and in form and substance satisfactory to the Agents, to the effect that:

 

(i)                                      They are an independent registered public accounting firm with respect to the Company and its subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations and the Public Accounting Oversight Board (United States).

 

(ii)                                   In their opinion, the consolidated financial statements and supporting schedule(s) of the Company and its subsidiaries audited and reported upon by them and incorporated by reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations with respect to registration statements on Form S-3 and the 1934 Act and the published rules and regulations thereunder.

 

(iii)                                They have performed specified procedures, not constituting an audit, including a reading of the latest available interim consolidated financial statements of the Company, a reading of the minute books of the Company since the end of the most recent fiscal year with respect to which an audit report has been issued, inquiries of and discussions with certain officials of the Company and certain of its subsidiaries responsible for financial and accounting matters with respect to the latest available interim unaudited consolidated financial statements of the Company, and such other inquiries and procedures as may be specified in such letter, and on the basis of such inquiries and procedures nothing came to their attention that caused them to believe that: (A) the latest available unaudited consolidated financial statements of the Company were not fairly presented in conformity with accounting principles generally accepted in the United States of America applied on a basis substantially consistent with that of the audited financial statements incorporated by reference therein, or (B) at a

 

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specified date not more than five days prior to the date of such letter, there was any change in the outstanding capital stock of the Company or any increase in consolidated long-term debt of the Company or any decrease in the stockholders’ equity of the Company, in each case as compared with the amounts shown on the most recent consolidated balance sheet of the Company incorporated by reference in the Registration Statement and Prospectus, except in each such case as set forth in or contemplated by the Registration Statement and Prospectus or except for such exceptions enumerated in such letter as shall have been agreed to by the Agents and the Company.

 

(iv)                               In addition to the examination referred to in their report included or incorporated by reference in the Registration Statement and the Prospectus, and the limited procedures referred to in clause (iii) above, they have carried out certain other specified procedures, not constituting an audit, with respect to certain financial information which is included or incorporated by reference in the Registration Statement and Prospectus, which would normally be covered under auditing procedures and which are specified by the Agents, and have found such financial information to be in agreement with the relevant accounting, financial and other records of the Company identified in such letter.

 

(f)                                     Other Documents .  On the date hereof and on each Settlement Date with respect to any applicable 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.

 

If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by any of the Agents (as to itself only) and any Terms Agreement may be terminated by the Agent party to such Terms Agreement 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 covenants set forth in Section 3(f) hereof, the provisions of Section 4 hereof, the indemnity and contribution agreement set forth in Sections 7 and 8 hereof, and the provisions of Sections 9 and 13 hereof shall remain in effect.

 

SECTION 6.           Subsequent Documentation Requirement of the Company .  The Company covenants and agrees that so long as Notes are authorized for sale pursuant to this Agreement and unless the sale of Notes has been suspended as provided in this Agreement:

 

(a)                                   Subsequent Delivery of Certificates .  Each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by (i) a Pricing Supplement or an amendment or other supplement providing solely for a change in the interest rates of the Notes or changes in other terms of the Notes or (ii) an amendment or supplement which relates exclusively to an offering of securities other than the Notes) or there is filed with the Commission any document (other than a Current Report on Form 8-K unless delivery of a certificate is reasonably requested by the Agents

 

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with respect to such filing) incorporated by reference into the Prospectus or the Company sells Notes to an Agent pursuant to a Terms Agreement, the terms of which so require, the Company shall use its best efforts to furnish or cause to be furnished to the Agents or to the Agent party to the Terms Agreement, as the case may be, promptly following such amendment, supplement or filing or on the Settlement Date with respect to such Terms Agreement, as the case may be, a certificate in form satisfactory to counsel for the Agents to the effect that the statements contained in the certificate referred to in Section 5(d) hereof, which was last furnished to the Agents, are true and correct at the time of such amendment, supplement, filing or sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 5(d), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate; provided , however , that in the case of any such amendment or supplement that relates to Notes which are indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index, such certificate shall state that, for purposes of such certificate, the phrase “or with respect to Notes which are to be indexed or linked to any currency, composite currency, commodity, equity index or similar index” appearing in the second sentence of Section 1(a)(viii) hereof shall be deemed not to apply with respect to such Notes.

 

(b)                                  Subsequent Delivery of Legal Opinions .  Each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by (i) a Pricing Supplement or an amendment or other supplement providing solely for a change in the interest rates of the Notes or changes in other terms of the Notes or (ii) an amendment or supplement providing primarily for the inclusion of additional financial information, or (iii) an amendment or supplement which relates exclusively to an offering of securities other than the Notes) or there is filed with the Commission any document incorporated by reference into the Prospectus (other than any Annual Report on Form 10-K, Current Report on Form 8-K or Quarterly Report on Form 10-Q relating primarily to financial statements or other financial information as of and for any fiscal quarter) or the Company sells Notes to an Agent pursuant to a Terms Agreement, the terms of which so require, the Company shall use its best efforts to furnish or cause to be furnished promptly following such amendment, supplement or filing or on the Settlement Date with respect to such Terms Agreement, as the case may be, to the Agents or to the Agent party to the Terms Agreement, as the case may be (with a copy to counsel to the Agents or counsel to such Agent, as the case may be), letters substantially in the form of Appendix II hereto (modified, as necessary, in the case of a Terms Agreement) from the counsel last furnishing the opinions referred to in Sections 5(a) and 5(b) hereof or, in lieu of such letters, letters from other counsel reasonably satisfactory to the Agents (which, in the case of the opinions referred to in such Section 5(b), shall include David K.  Thompson, Senior Vice President – Deputy General Counsel – Corporate and Corporate Secretary of the Company), dated the date of delivery of such letter and in form satisfactory to counsel for the Agents, of the same tenor as the opinions referred to in Sections 5(a) and 5(b) (other than, in the case of the opinion delivered pursuant to Section 5(b) hereof, the matters covered by Sections 5(b)(ii) and 5(b)(v) (with respect to

 

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execution and delivery)) hereof, but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion; provided , however , that (i) in the case of any such amendment or supplement that relates to Notes which are indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index, the opinions referred to in Section 5(a) hereof shall not include the exceptions set forth in such Section 5(a) as to Notes which are to be indexed or linked to any foreign currency, composite currency, commodity, equity index or similar index and (ii) if reasonably requested by the Agents, the counsel delivering the opinions referred to in Section 5(b) shall expand the opinion rendered pursuant to Section 5(b)(i) to include any other subsidiary of the Company that, as a result of actions or events occurring after the date of this Agreement is of substantially similar materiality to the Company, on a consolidated basis, as each of the Significant Subsidiaries are as of the date of this Agreement.  The Company shall use its best efforts to furnish or cause to be furnished to the Agents, promptly following each filin