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Exhibit 1.2
EXECUTION COPY
Wells Fargo Financial, Inc.
U.S. $1,300,000,000
Medium-Term Notes, Series D,
Due From 9 Months to 30 years from Date of Issue
Medium-Term Note Administrative Procedures
Dated as of January 18, 2002
Medium-Term Notes, Series D(the "Notes") in the aggregate principal amount of up
to U.S. $1,300,000,000 are to be offered on a continuing basis by Wells Fargo
Financial, Inc. (the "Company") through Banc of America Securities LLC; Banc One
Capital Markets, Inc.; Bear, Stearns & Co. Inc.; BNP Paribas Securities Corp.;
Deutsche Banc Alex. Brown Inc.; J.P. Morgan Securities Inc.; Merrill Lynch,
Pierce, Fenner & Smith Incorporated; Mizuho International plc; Salomon Smith
Barney Inc.; Utendahl Capital Partners, L.P. and Wells Fargo Brokerage Services,
LLC who, as agents (each an "Agent", and, collectively, the "Agents"), have
agreed to use their best efforts to solicit offers to purchase the Notes from
the Company. The Agents may also purchase Notes as principal for resale.
The Notes are being sold pursuant to a Distribution Agreement between the
Company and the Agents, dated as of January 18, 2002 (the "Distribution
Agreement"). The Notes which constitute senior indebtedness of the Company will
be issued pursuant to an Indenture dated as of November 1, 1991 between the
Company and The First National Bank of Chicago (now called Bank One Trust
Company, National Association), as trustee (the "Senior Trustee") (said
Indenture being hereinafter called the "Senior Indenture"). The Notes which
constitute senior subordinated indebtedness of the Company will be issued
pursuant to an Indenture dated as of May 1, 1986 between the Company and BNY
Midwest Trust Company, as successor to Harris Trust and Savings Bank, as trustee
(the "Senior Subordinated Trustee"), as amended and supplemented by a First
Supplemental Indenture dated as of February 15, 1991 between the Company and the
Senior Subordinated Trustee (said Indenture as amended and supplemented by said
First Supplemental Indenture being hereinafter called the "Senior Subordinated
Indenture"). A Registration Statement (the "Registration Statement", which term
shall include any additional registration statements filed in connection with
the Notes as provided in the introductory paragraphs of the Distribution
Agreement) with respect to the Notes has been filed with the Securities and
Exchange Commission (the "Commission"). The most recent base Prospectus included
in the Registration Statement, as supplemented with respect to the specific
terms of the Notes is herein referred to as the "Prospectus Supplement". The
most recent supplement to the Prospectus with respect to the specific terms of
the Notes is herein referred to as the "Pricing Supplement".
The Notes will be issued in fully registered form and will be represented by
either (a) a Global Security in book-entry form delivered to the Senior Trustee,
(in the case of Notes that constitute senior indebtedness of the Company) or the
Senior Subordinated Trustee (in the case of Notes that constitute senior
subordinated indebtedness of the Company), in each case as the agent for The
Depository Trust Company ("DTC"), and recorded in the book-entry system
maintained by DTC (a "Book-Entry Note"), or (b) in certificated form delivered
to the purchaser thereof or a person designated by such purchaser (a
"Certificated Note"). Owners of beneficial interests in Notes issued in
book-entry form will be entitled to physical delivery of Notes in certificated
form equal in
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principal amount to their respective beneficial interests only upon certain
limited circumstances described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth in
Part I hereof. Additionally, Notes issued in book-entry form will be issued in
accordance with the procedures set forth in Part II hereof and Notes issued in
certificated form will be issued in accordance with the procedures set forth in
Part III hereof. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Senior Indenture or the Senior
Subordinated Indenture (individually, an "Indenture" and collectively, the
"Indentures") or the Notes, as the case may be. References herein to a "Trustee"
shall mean, as appropriate, (i) the Senior Trustee when such term is used with
respect to or in connection with, or when it relates to the Senior Indenture or
any Notes issued thereunder, or (ii) the Senior Subordinated Trustee when such
term is used with respect to or in connection with, or when it relates to the
Senior Subordinated Indenture or any Notes issued thereunder; and references
herein to the "Trustees" shall mean both the Senior Trustee and the Senior
Subordinated Trustee. To the extent that the procedures set forth below conflict
with the provisions of the Notes, the applicable Indenture or the Distribution
Agreement, the relevant provisions of the Notes, the applicable Indenture or the
Distribution Agreement shall control.
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall
also bear an original issue date (the "Original
Issue Date"). The Original Issue Date shall remain
the same for all Notes subsequently issued upon
transfer, exchange or substitution of an original
Note regardless of their dates of authentication.
Maturities: Each Note will mature on a date selected by the
purchaser and agreed to by the Company which is
not less than 9 months nor more than 30 years from
its Original Issue Date.
Registration: Notes will be issued only in fully registered
form.
Calculation of Interest: In the case of Fixed Rate Notes, interest
(including payments for partial periods) will be
calculated and paid on the basis of a 360-day year
of twelve 30-day months. In the case of Floating
Rate Notes, interest will be calculated and paid
on the basis of the actual number of days in the
interest period divided by 360 for Certificate of
Deposit, Commercial Paper, Federal Funds Rate,
Prime Rate and LIBOR Notes, and on the basis of
the actual number of days in the interest period
divided by the actual number of days in the year
for Treasury Rate Notes and CMT Rate Notes.
Acceptance and
Rejection of Offers: The Company shall have the sole right to accept
offers to purchase Notes from the Company and may
reject any such offer in whole or
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in part. Each Agent shall communicate to the
Company, orally or in writing, each reasonable
offer to purchase Notes from the Company received
by it. Each Agent shall have the right, in its
discretion reasonably exercised, without notice to
the Company, to reject any offer to purchase Notes
through it in whole or in part.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company, with the approval of the
Agent which presented such offer (the "Presenting
Agent"), will prepare a Pricing Supplement
reflecting the terms of such Note and file Pricing
Supplements relating to the Notes and the plan of
distribution thereof (the "Supplemented
Prospectus") with the Commission in accordance
with Rule 424 under the Act. The Company should
send to the Presenting Agent by facsimile
transmission or by prepaid overnight courier the
Pricing Supplement at the same time as it files
such Pricing Supplement with the Commission at the
following address:
If the Presenting Agent is Banc of America
Securities LLC, then to:
Banc of America Securities LLC
NC1-007-07-01
100 North Tryon Street
Charlotte, North Carolina 28255
Attention: MTN Department
Telephone: (704) 388-4809
Fax: (704) 388-9939
If the Presenting Agent is Banc One Capital
Markets, Inc., then to:
Banc One Capital Markets, Inc.
1 Bank One Plaza
Suite 1L1-0595
Chicago, Illinois 60670
Attention: Investment Grade Securities
Telephone: (312) 732-7259
Fax: (312) 732-4773
If the Presenting Agent is Bear, Stearns & Co.
Inc., then to:
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: Medium-Term Note Program
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If the Presenting Agent is BNP Paribas Securities
Corp., then to:
BNP Paribas Securities Corp.,
787 7th Avenue, 8th Floor
New York, New York 10019
Attention: Fixed Income Syndicate
Telephone: (212) 841-3435
Fax: (212) 841-3930
If the Presenting Agent is Deutsche Banc Alex.
Brown Inc., then to:
Deutsche Banc Alex. Brown Inc.
31 West 52nd Street, 3rd Floor
New York, New York 10019
Attention: Daniel Benton
Telephone: (212) 469-6801
Fax: (212) 469-7875; and
Deutsche Banc Alex. Brown Inc.
1290 6th Avenue, 6th Floor
New York, New York 10104-0051
Attention: Brian Guerra
Telephone: (212) 469-3370
Fax: (212) 469-2246; and
Deutsche Banc Alex. Brown Inc.
Legal Division
1301 Avenue of Americas, 8th Floor
New York, New York 10019-6022
Attention: Joseph Kopec
Telephone: (212) 469-8793
Fax: (212) 469-7024
If the Presenting Agent is J.P. Morgan Securities
Inc., then to:
J.P. Morgan Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017
Attention: Medium-Term Note Desk
Telephone: (212) 834-4421
Fax: (212) 834-6081
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If the Presenting Agent is Merrill Lynch, Pierce,
Fenner & Smith Incorporated:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
4 World Financial Center, North Tower,
15th Floor
New York, New York 10080
Attention: MTN Product Management
If the Presenting Agent is Mizuho International
plc, then to:
Mizuho International plc
Bracken House
One Friday Street
London EC4M 9JA
Attention: MTN Trading Desk
Telephone: 011-44-20-7236-1090
Fax: 011-44-20-7236-0484
If the Presenting Agent is Salomon Smith Barney
Inc., then to:
Salomon Smith Barney Inc.
TPOD-Balancing Operations
One New York Plaza, 36th Floor
New York, New York 10004
If the Presenting Agent is Utendahl Capital
Partners, L. P., then to:
Utendahl Capital Partners, L.P.
30 Broad Street, 42nd Floor
New York, New York 10004
Attention: Carlos Sanchez and Richard
Gordon
Telephone: (212) 797-2665 and
(212) 797-2660
Fax: (212) 425-1873
If the Presenting Agent is Wells Fargo Brokerage
Services, LLC, then to:
Wells Fargo Brokerage Services, LLC
608 2nd Avenue So.
Minneapolis, Minnesota 55479
Attention: Michael A. Schaefer
Telephone: (612) 667-0173
Fax: (612) 667-7517
The Presenting Agent will cause a stickered
Supplemented Prospectus to be delivered to the
purchaser of the Note.
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In each instance that a Pricing Supplement is
prepared, the Agents will affix the Pricing
Supplement to the Supplemented Prospectuses prior
to their use. Outdated Pricing Supplements, and
the Supplemented Prospectuses to which they are
attached (other than those retained for files)
will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the
authentication and delivery of such Note shall,
with respect to such Note, constitute
"settlement." Offers accepted by the Company will
be settled not less than the third, nor later than
the fifth Business Day succeeding the date of
acceptance, or at such time as the purchaser and
the Company shall agree, pursuant to the timetable
for settlement set forth in Parts II and III
hereof under "Settlement Procedures" with respect
to Book-Entry Notes and Certificated Notes,
respectively.
In the event of a purchase of Notes by any Agent
as principal, appropriate settlement details will
be as agreed between the Agent and the Company
pursuant to the applicable Terms Agreement (as
defined in section 3(b) of the Distribution
Agreement).
Procedure for
Changing Rates or Other
Variable Terms: When a decision has been reached to change the
interest rate or any other variable term on any
Note being sold by the Company, the Company will
promptly advise the Agents and the Agents will
forthwith suspend solicitation of offers to
purchase such Notes. The Agents will telephone the
Company with recommendations as to the changed
interest rates or other variable terms. At such
time as the Company advises the Agents of the new
interest rates or other variable terms, the Agents
may resume solicitation of offers to purchase such
Notes. Until such time only "indications of
interest" may be recorded. Immediately after
acceptance by the Company of an offer to purchase
a Note at a new interest rate or new variable
term, the Company, the Presenting Agent and the
applicable Trustee shall follow the procedures set
forth under the applicable "Settlement
Procedures".
Suspension of Solicitation;
Amendment or Supplement: The Company may instruct the Agents to suspend
solicitation of purchases at any time. Upon
receipt of such instructions the Agents will
forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as
the Company has advised them that solicitation of
offers to purchase may be resumed. If the Company
decides to amend the Registration Statement
(including incorporating any documents by
reference therein) or supplement any of such
documents (other than to change rates or other
variable terms), it will promptly advise the
Agents and the Trustees and will furnish the
Agents and their counsel with copies of the
proposed amendment (including any document
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proposed to be incorporated by reference therein)
or supplement. One copy of such filed document,
along with a copy of the cover letter sent to the
Commission, will be delivered or mailed to the
Agents and the Trustees at the following
respective addresses: Agents: Banc of America
Securities LLC, Banc of America Corporate Center,
NC1-007-07-01, 100 North Tryon Street, Charlotte,
North Carolina 28255, Attention: MTN Department;
Banc One Capital Markets, Inc., 1 Banc One Plaza,
Suite 1L1-0595, Chicago, Illinois 60670-0084,
Attention: Investment Grade Securities; Bear,
Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167; BNP Paribas Securities Corp., 787 7th
Avenue, 8th Floor New York, New York 10019,
Attention: Fixed Income Syndicate; Deutsche Banc
Alex. Brown Inc., 31 West 52nd Street, 3rd Floor,
New York, New York 10019, Attention: Daniel
Benton; J.P. Morgan Securities Inc., 270 Park
Avenue, 9th Floor, New York, New York 10017,
Attention: Transaction Execution Group; Merrill
Lynch, Pierce, Fenner & Smith Incorporated,
Merrill Lynch World Headquarters, 4 World
Financial Center, North Tower, 15th Floor, New
York, New York 10080; Mizuho International plc,
Bracken House, One Friday Street, London EC4M 9JA;
Salomon Smith Barney Inc., 390 Greenwich Street,
4th Floor, New York, New York 10013, Attention:
Medium-Term Note Group; Utendahl Capital Partners,
L. P., 30 Broad Street, 42nd Floor, New York, New
York 10004, Attention: Carlos Sanchez and Richard
Gordon; Wells Fargo Brokerage Services, LLC, 608
2nd Avenue So., Minneapolis, Minnesota, 55479,
Attention: Michael A. Schaefer; Senior Trustee:
Senior Trustee: Bank One Trust Company, National
Association, 1 Bank One Plaza, Suite IL1-4030,
Chicago, Illinois, 60670-0430, Attention: Global
Corporate Trust Services; and BNY Midwest Trust
Company, 2 N. LaSalle Street, Suite 1020, Chicago,
Illinois 60602.
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
(other than to change interest rates or other
variable terms) there shall be any orders
outstanding which have not been settled, the
Company will promptly advise the Agents and the
Trustees whether such orders may be settled and
whether copies of the Prospectus as theretofore
amended and/or supplemented as in effect at the
time of the suspension may be delivered in
connection with the settlement of such orders. The
Company will have the sole responsibility for such
decision and for any arrangements which may be
made in the event that the Company determines that
such orders may not be settled or that copies of
such Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the most recent Prospectus, Prospectus
Supplement and Pricing Supplement must accompany
or precede the earlier of (a) the written
confirmation of a sale sent to a customer or his
agent and (b) the delivery of Notes to a customer
or his agent.
Authenticity of Signatures: The Agents will have no obligations or liability
to the Company or any Trustee in respect to the
authenticity of the signature of any
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officer, employee or agent of the Company or the
Trustee on any Note.
Documents Incorporated
by Reference: The Company shall supply the Agents with an
adequate supply of all documents incorporated by
reference in the Registration Statement.
Business Day: With respect to the Senior Indenture, "Business
Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday that meets each of the
following applicable requirements: the day is (a)
not a day on which banking institutions are
authorized or required by law or regulation to be
closed in the Borough of Manhattan, The City of
New York, and (b) with respect to LIBOR Notes, a
London Banking Day. With respect to the Senior
Subordinated Indenture, "Business Day" means each
Monday, Tuesday, Wednesday, Thursday and Friday
that meets each of the following applicable
requirements: the day is (a) not a day on which
banking institutions are authorized or required by
law or regulation to be closed in the Borough of
Manhattan, The City of New York or the City of
Chicago, Illinois, and (b) with respect to LIBOR
Notes, a London Banking Day.
London Banking Day: "London Banking Day" means any day on which
dealings in deposits in U.S. dollars are
transacted in the London interbank market.
Periodic Statements
from the Trustee: Periodically, the applicable Trustee will send to
the Company a statement setting forth the
principal amount of Notes Outstanding as of that
date and setting forth a brief description of any
sales of Notes which the Company has advised the
applicable Trustee but which have not yet been
settled.
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form for
eligibility in the book-entry system maintained by DTC, each Trustee will
perform the custodial, document control and administrative functions
described below (with respect to Notes issued under the Indenture under which
it is the trustee), each in accordance with its respective obligations under
Letters of Representations from the Company and each Trustee to DTC, each
dated January 18, 2002, and Medium-Term Note Certificate Agreements, dated
March 10, 1989, between the Senior Trustee and DTC and dated August 17, 1989
between the Senior Subordinated Trustee's designee, the Bank of New York, and
DTC (together, as amended, the "Certificate Agreements"), and its obligations
as a participant in DTC, including DTC's Same-Day Funds Settlement System
("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form
having the same rank (senior or senior
subordinated), Original Issue Date, interest rate,
redemption provisions, repayment provisions,
Interest Payment Dates, Interest Payment Period,
Original Issue Discount provisions, and Stated
Maturity (collectively, the "Fixed Rate Terms")
will be
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represented initially by a single Book-Entry Note
in fully registered form without coupons; and all
Floating Rate Notes issued in book-entry form
having the same Original Issue Date, base rate
upon which interest may be determined (each, a
"Base Rate"), which may be the Commercial Paper
Rate, the Treasury Rate, LIBOR, the CD Rate, the
Federal Funds Rate, the Prime Rate, the CMT Rate
and any other rate set forth by the Company,
Initial Interest Rate, Index Maturity, Interest
Reset Period, Spread or Spread Multiplier, if any,
minimum interest rate, if any, maximum interest
rate, if any, redemption provisions, repayment
provisions, Interest Payment Dates, Interest
Payment Period, Original Issue Discount
provisions, and Stated Maturity (collectively,
"Floating Rate Terms") will be represented
initially by a single Book-Entry Note.
Each Book-Entry Note will be dated and issued as
of the date of its authentication by the
applicable Trustee. Each Book-Entry Note will bear
an "Interest Accrual Date," which will be (a) with
respect to an original Book-Entry Note (or any
portion thereof), its Original Issue Date and (b)
with respect to any Book-Entry Note (or portion
thereof) issued subsequently upon exchange of a
Book-Entry Note or in lieu of a destroyed, lost or
stolen Book-Entry Note, the most recent Interest
Payment Date to which interest has been paid or
duly provided for on the predecessor Book-Entry
Note or Notes (or if no such payment or provision
has been made, the Original Issue Date of the
predecessor Book-Entry Note or Notes), regardless
of the date of authentication of such subsequently
issued Book-Entry Note. No Book-Entry Note shall
represent (i) both Fixed Rate and Floating Rate
Book-Entry Notes or (ii) any Note issued in
certificated form.
Identification: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the
"CUSIP Service Bureau") for the reservation of two
series of CUSIP numbers (including tranche
numbers), each of which series consists of
approximately 900 CUSIP numbers and relates to
Book-Entry Notes representing one or two ranks of
book-entry notes. The Company has obtained from
the CUSIP Service Bureau a written list of each
such series of reserved CUSIP numbers and has
delivered to the Trustees and DTC such list of
such CUSIP numbers. The Company will assign CUSIP
numbers to Book-Entry Notes as described below
under Settlement Procedure B. DTC will notify the
CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to
Book-Entry Notes. Each Trustee will notify the
Company at any time when fewer than 100 of its
reserved CUSIP numbers remain unassigned to
Book-Entry Notes that may be authenticated by such
Trustee, and, if it deems necessary, the Company
will reserve additional CUSIP numbers for
assignment to Book-Entry Notes. Upon obtaining
such additional CUSIP numbers, the Company will
deliver a list of such additional numbers to such
Trustee and DTC. Book-Entry Notes having an
aggregate principal amount in excess of
$500,000,000 and otherwise
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required to be represented by the same Book-Entry
Note will instead be represented by two or more
Book-Entry Notes which shall all be assigned the
same CUSIP number.
Registration: Each Book-Entry Note will be registered in the
name of Cede & Co., as nominee for DTC, on the
register maintained by the applicable Trustee
under the Indenture under which the Book-Entry
Note was issued. The beneficial owner of a Note
issued in book-entry form (I.E., an owner of a
beneficial interest in a Book-Entry Note) (or one
or more indirect participants in DTC designated by
such owner) will designate one or more
participants in DTC (with respect to such Note
issued in book-entry form, the "Participants") to
act as agent for such beneficial owner in
connection with the book-entry system maintained
by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such
Participants, a credit balance with respect to
such Note issued in book-entry form in the account
of such Participants. The ownership interest of
such beneficial owner in such Note issued in
book-entry form will be recorded through the
records of such Participants or through the
separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one
or more direct participants in DTC) acting on
behalf of beneficial transferors and transferees
of such Book-Entry Note.
Exchanges: Each Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or more
Book-Entry Notes Outstanding on such date that
represent Book-Entry Notes having the same Fixed
Rate Terms or Floating Rate Terms, as the case may
be, (other than Original Issue Dates) and for
which interest has been paid to the same date; (b)
a date, occurring at least 20 days after such
written notice is delivered and at least 20 days
before the next Interest Payment Date for the
related Notes issued in book-entry form, on which
such Book-Entry Notes shall be exchanged for a
single replacement Book-Entry Note, and (c) a new
CUSIP number, obtained from the Company, to be
assigned to such replacement Book-Entry Note. Upon
receipt of such a notice, DTC will send to its
participants (including the applicable Trustee) a
written reorganization notice to the effect that
such exchange will occur on such date. Prior to
the specified exchange date, such Trustee will
deliver to the CUSIP Service Bureau written notice
setting forth such exchange date and the new CUSIP
number and stating that, as of such exchange date,
the CUSIP numbers of the Book-Entry Notes to be
exchanged will no longer be valid. On the
specified exchange date, the applicable Trustee
will exchange such Book-Entry Notes for a single
Book-Entry Note bearing the new CUSIP number and
the CUSIP numbers of the exchanged Book-
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Entry Notes will, in accordance with CUSIP Service
Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the
foregoing, if the Book-Entry Notes to be exchanged
exceed $500,000,000 in aggregate principal amount,
one replacement Book-Entry Note will be
authenticated and issued to represent each
$500,000,000 of principal amount of the exchanged
Book-Entry Notes and an additional Book-Entry Note
or Notes will be authenticated and issued to
represent any remaining principal amount of such
Book-Entry Notes (See "Denominations" below).
Denominations: All Notes issued in book-entry form will be
denominated in U.S. dollars. Notes issued in
book-entry form will be issued in denominations of
$1,000 or any larger denomination which is an
integral multiple of $1,000. Book-Entry Notes will
be denominated in principal amounts not in excess
of $500,000,000. If one or more Notes issued in
book-entry form having an aggregate principal
amount in excess of $500,000,000 would, but for
the preceding sentence, be represented by a single
Book-Entry Note, then one Book-Entry Note will be
issued to represent $500,000,000 principal amount
of such Note or Notes issued in book-entry form
and an additional Book-Entry Note or Notes will be
issued to represent any remaining principal amount
of such Note or Notes issued in book-entry form.
In such a case, each of the Book-Entry Notes
representing such Note or Notes issued in
book-entry form shall be assigned the same CUSIP
number.
Interest: GENERAL. Each Note will bear interest, if any, in
accordance with its terms. Interest, if any, on
each Note issued in book-entry form will accrue
from the Interest Accrual Date of the Book-Entry
Note representing such Note. Generally, each
payment of interest on a Note issued in book-entry
form will include interest accrued to, but
excluding, the Interest Payment Date, or Maturity.
Interest payable at Maturity of a Note issued in
book-entry form will be payable to the Person to
whom the principal of such Note is payable. DTC
will arrange for each pending deposit message
described under Settlement Procedure C below to be
transmitted to the Standard & Poor's Corporation,
which will use the information in the message to
include certain terms of the related Book-Entry
Note in the appropriate daily bond report
published by the Standard & Poor's Corporation.
RECORD DATE. The "Record Date" with respect to any
Interest Payment Date for (a) a Fixed Rate Note
shall be the first day of the calendar month if
such Interest Payment Date is the fifteenth day of
such calendar month, and shall mean the fifteenth
day of the calendar month preceding such Interest
Payment Date if such Interest Payment Date is the
first day of the calendar month, in each case
whether or not such date shall be a Business Day
or (b) a Floating Rate Note shall be the date
fifteen calendar days preceding such Interest
Payment Date, whether or not such date shall be a
Business Day.
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INTEREST PAYMENT DATES. Interest payments will be
made on each Interest Payment Date commencing with
the first Interest Payment Date following the
Original Issue Date; provided, however, the first
payment of interest on any Book-Entry Note
originally issued between a Record Date and an
Interest Payment Date will occur on the Interest
Payment Date following the next Record Date.
If an Interest Payment Date with respect to any
Floating Rate Note issued in book-entry form would
otherwise fall on a day that is not a Business Day
with respect to such Note, such Interest Payment
Date will be the following day that is a Business
Day with respect to such Note, except that in the
case of a LIBOR Note, if such day falls in the
next calendar month, such Interest Payment Date
will be the next preceding day that is a London
Banking Day.
FIXED RATE NOTES. Unless otherwise specified in
the Fixed Rate Note, interest payments on Fixed
Rate Notes issued in book-entry form will be
payable semi-annually for Senior Securities on
each April 1 and October 1 and for Senior
Subordinated Securities on each April 15 and
October 15, and at Maturity or upon earlier
redemption or repayment.
FLOATING RATE NOTES. Interest payments on Floating
Rate Notes issued in book-entry form will be made
as specified in the Floating Rate Note.
NOTICE OF INTEREST PAYMENTS AND RECORD DATES. On
the first Business Day of January, April, July and
October of each year, each Trustee will deliver to
the Company and DTC a written list of Record Dates
and Interest Payment Dates that will occur during
the six-month period beginning on such first
Business Day with respect to Floating Rate Notes
issued in book-entry form. Promptly after each
Calculation Date for Floating Rate Notes issued in
book-entry form, the Calculation Agent will notify
DTC and the Standard & Poor's Corporation of the
interest rates determined on the related Interest
Determination Date.
Payments of Principal
and Interest: PAYMENTS OF INTEREST ONLY. Promptly after each
Record Date, each Trustee will deliver to the
Company and DTC a written notice specifying by
CUSIP number the amount of interest to be paid on
each Outstanding Book-Entry Note authenticated by
it on the following Interest Payment Date (other
than an Interest Payment Date coinciding with
Maturity) and the total of such amounts. DTC will
confirm the amount payable on each Book-Entry Note
on such Interest Payment Date by reference to the
daily bond reports published by the Standard &
Poor's Corporation. On such Interest Payment Date,
the Company will pay to the applicable Trustee as
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Paying Agent, and such Trustee in turn will pay to
DTC, such total amount of interest due (other than
at Maturity), at the times and in the manner set
forth below under "Manner of Payment." Generally,
if any Interest Payment Date of a Book-Entry Note
is not a Business Day, the payment due on such day
shall be made on the next succeeding Business Day
with the same force and effect as if made on such
Interest Payment Date, and no interest shall
accrue on such payment from and after the Interest
Payment Date.
PAYMENTS AT MATURITY. On or about the first
Business Day of each month, each Trustee will
deliver to the Company and DTC a written list of
principal, interest and premium, if any, to be
paid on each Outstanding Book-Entry Note
authenticated by it and maturing either at Stated
Maturity or on a Redemption Date in the following
month. The applicable Trustee, the Company and DTC
will confirm the amounts of such principal and
interest payments with respect to a Book-Entry
Note on or about the fifth Business Day preceding
the Maturity of such Book-Entry Note. At such
Maturity, the Company will pay to the applicable
Trustee as Paying Agent, and such Trustee in turn
will pay to DTC, the principal amount of such
Note, together with interest and premium, if any,
due at such Maturity, at the times and in the
manner set forth below under "Manner of Payment".
If any Maturity of a Book-Entry Note is not a
Business Day, the payment due on such day shall be
made on the next succeeding Business Day with the
same force and effect as if made on such Maturity
and no interest shall accrue on such payment from
and after such Maturity. Promptly after payment to
DTC of the principal, interest and premium, if
any, due at the Maturity of such Book-Entry Note,
the applicable Trustee will cancel such Book-Entry
Note and deliver it to the Company with an
appropriate debit advice. On the first Business
Day of each month, each Trustee will deliver to
the Company a written statement indicating the
total principal amount of Outstanding Book-Entry
Notes (which have been authenticated by such
Trustee) as of the immediately preceding Business
Day.
MANNER OF PAYMENT. The total amount of any
principal, premium, if any, and interest due on
Book-Entry Notes on any Interest Payment Date or
at Maturity shall be paid by the Company to the
Trustee which authenticated the same in funds
available for use by the applicable Trustee as of
10:30 a.m., New York City time, on such date. The
Company will make such payment on such Book-Entry
Notes by instructing the applicable Trustee to
withdraw funds from an account maintained by the
Company at such Trustee. The Company will confirm
such instructions in writing to such Trustee.
Prior to 11:00 a.m., New York City time, on such
date or as soon as possible thereafter, such
Trustee will pay by separate wire transfer (using
Fedwire message entry instructions in a form
previously specified by DTC) to an account at the
Federal Reserve Bank of New York previously
specified by DTC in funds available for immediate
1.2-13
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use by DTC, or in accordance with other existing
arrangements between such Trustee and DTC, each
payment of interest, principal and premium, if
any, due on a Book-Entry Note on such date.
Thereafter on such date, DTC will pay, in
accordance with its SDFS operating procedures then
in effect, such amounts in funds available for
immediate use to the respective Participants in
whose names such Notes are recorded in the
book-entry system maintained by DTC. Neither the
Company nor the Trustees shall have any
responsibility or liability for the payment by DTC
of the principal of, or interest on, the
Book-Entry Notes to such Participants.
WITHHOLDING TAXES. The amount of any taxes
required under applicable law to be withheld from
any interest payment on a Note will be determined
and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the
beneficial owner of such Note.
Settlement
Procedures: Settlement Procedures with regard to each Note in
book-entry form sold by each Agent, as agent of
the Company, will be as follows:
A. The Presenting Agent will advise the Company by
telephone of the following Settlement
information with regard to each Note:
1. Name of registered owner.
2. Exact address of registered owner.
3. Taxpayer identification number of the
registered owner.
4. Principal amount of the Note.
5. Fixed Rate Notes:
a) interest rate
b) interest payment date and record date.
6. Floating Rate Notes:
a) interest rate basis;
b) initial interest rate;
c) spread or spread multiplier, if any;
d) interest rate reset dates;
e) interest rate reset period;
f) interest payment dates;
g) interest payment period;
h) index maturity;
i) calculation agent;
j) maximum interest rate, if any;
k) minimum interest rate, if any;
l) calculation date;
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m) interest determination dates;
n) number of days to first interest
payment;
o) amount of first interest payment; and
p) interest per $1,000 of principal amount.
7. Any redemption or repayment provisions.
8. Price to public of the Note.
9. Trade date.
10. Settlement Date (Original Issue Date).
11. Maturity.
12. Net proceeds to the Company.
13. Exact name and address of Presenting Agent.
14. Presenting Agent's commission.
15. Denominations.
16. Place of delivery of the Note by the
applicable Trustee.
17. Whether the Note is senior indebtedness or
senior subordinated indebtedness of the
Company.
B. The Company will assign a CUSIP number to
the Book-Entry Note representing such Note and
then advise the Trustee authenticating the same
by telephone (confirmed in writing at any time
on the same date) or by electronic transmission
of the above settlement information received
from the Presenting Agent, such CUSIP number
and the name of the Agent. The Company shall
also notify the Presenting Agent of such CUSIP
number as soon as practicable. Such Presenting
Agent will advise the Company of the foregoing
information for each sale made by it in time
for the applicable Trustee to prepare such
Note. Each such communication by the Company
shall constitute a representation and warranty
by the Company to the applicable Trustee and
the Presenting Agent that (i) such Note, and
the Book-Entry Note representing such Note, are
then, and at the time of issuance and sale
thereof will be, duly authorized for issuance
and sale by the Company, (ii) such Note, and
the Book-Entry Note representing such Note,
will conform with the terms of the Senior
Indenture or the Senior Subordinated Indenture,
(iii) after giving effect to the issuance of
such Note and any other Debt Securities (as
defined in the Registration Statement) to be
issued on or prior to the settlement date for
the
1.2-15
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sale of such Note, the aggregate amount of Debt
Securities which have been issued and sold by
the Company will not exceed the amount of Debt
Securities registered under the Registration
Statement, and (iv) upon authentication and
delivery of such Book-Entry Note the aggregate
initial offering price of all Notes issued
under the Senior Indenture and Senior
Subordinated Indenture will not exceed U.S.
$1,300,000,000 (except for Notes authenticated
and delivered upon registration of, transfer
of, in exchange for, or in lieu of Notes
pursuant to Sections 3.05 and 3.06 of the
Senior Indenture and Sections 3.05 and 3.06 of
the Senior Subordinated Indenture).
C. The applicable Trustee will communicate to
DTC, the Standard & Poor's Corporation, the
Calculation Agent (if other than the Trustee)
and the Presenting Agent through DTC's
Participant Terminal System, a pending deposit
message specifying the following settlement
information:
1. The information set forth in Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of
such Trustee and the Agent.
3. Identification as a Fixed Rate Book-Entry
Note or Floating Rate Book-Entry Note.
4. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related record date for DTC
purposes (or, in the case of Floating Rate
Notes which reset daily or weekly, the date
five calendar days preceding the applicable
Interest Payment Date) and, if then
calculable, the amount of interest
payable on such Interest Payment Date
(which amount shall have been confirmed by
such Trustee).
5. CUSIP number of the Book-Entry Note
representing such Note.
6. Whether such Book-Entry Note represents any
other Notes issued or to be issued in
book-entry form.
7. Interest Payment Period.
D. To the extent the Company has not already
done so, the Company will execute and deliver
to the applicable Trustee a Book-Entry Note
representing such Note in a form that has been
approved by the Company, the Agents and such
Trustee.
1.2-16
<Page>
E. The applicable Trustee will authenticate the
Book-Entry Note representing such Note.
F. DTC will credit such Note to the participant
account of the applicable Trustee maintained by
DTC.
G. The applicable Trustee will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Note to such Trustee's participant account
and credit such Note to the participant account
of the Presenting Agent maintained by DTC and
(ii) to debit the settlement account of the
Presenting Agent and credit the settlement
account of such Trustee maintained by DTC, in
an amount equal to the price of such Note less
such Agent's commission. Any entry of such a
deliver order shall be deemed to constitute a
representation and warranty by such Trustee to
DTC that (i) the Book-Entry Note representing
such Note has been issued and authenticated and
(ii) such Trustee is holding such Book-Entry
Note pursuant to the Medium-Term Note
Certificate Agreement between such Trustee and
DTC.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Note to the Presenting Agent's participant
account and credit such Note to the participant
account of the Participants maintained by DTC
and (ii) to debit the settlement accounts of
such Participants and credit the settlement
account of the Presenting Agent maintained by
DTC, in an amount equal to the initial public
offering price of such Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures G and H will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date.
J. The applicable Trustee will credit to an
account of the Company maintained with such
Trustee funds available for immediate use in
the amount transferred to such Trustee in
accordance with Settlement Procedure G.
K. The Trustee authenticating the same will
send a copy of the Book-Entry Note by first
class mail to the Company.
L. The Presenting Agent will confirm the
purchase of such Note to the purchaser either
by transmitting to the Participant with respect
to such Note a confirmation order through DTC's
Participant Terminal System or by mailing a
written confirmation to such purchaser.
1.2-17
<Page>
Settlement Procedures
Timetable: For orders of Notes accepted by the Company,
Settlement Procedures "A" through "L" set forth
above shall be completed as soon as possible but
not later than the respective times (New York City
time) set forth below:
SETTLEMENT PROCEDURE TIME
A-B 11:00 a.m. on the trade date
C 2:00 p.m. on the second
Business Day before the
Settlement Date
D 3:00 p.m. on the Business
Day before Settlement
Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement
Date
G-H 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedures A,
B, and C may, if necessary, be completed at any
time prior to the specified times on the first
Business Day after such sale date. In connection
with a sale which is to be settled more than one
Business Day after the trade date, if the initial
interest rate for a Floating Rate Note is not
known at the time that Settlement Procedure A is
completed, Settlement Procedures B and C shall be
completed as soon as such rates have been
determined, but no later than 11:00 a.m. and 2:00
p.m., New York City time, respectively, on the
second Business Day before the Settlement Date.
Settlement Procedure I is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Note issued in book-entry form
is rescheduled or cancelled, the Trustee
authenticating the Note will deliver to DTC,
through DTC's Participant Terminal System, a
cancellation message to such effect by no later
than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled
Settlement Date.
Failure to Settle: If the applicable Trustee fails to enter an SDFS
deliver order with respect to a Book-Entry Note
issued in book-entry form pursuant to Settlement
Procedure G, such Trustee may deliver to DTC,
through DTC's Participant Terminal System, as soon
as practicable a withdrawal message instructing
DTC to debit such Note to the participant account
of the Trustee maintained at DTC. DTC will process
the withdrawal message, provided that such
participant account contains a principal amount of
the Book-Entry Note representing such Note that is
at least equal to the principal amount to
1.2-18
<Page>
be debited. If withdrawal messages are processed
with respect to all the Notes represented by a
Book-Entry Note, such Trustee will mark such
Book-Entry Note "cancelled", make appropriate
entries in its records and send such cancelled
Book-Entry Note to the Company. The CUSIP number
assigned to such Book-Entry Note shall, in
accordance with CUSIP Service Bureau procedures,
be cancelled and not immediately reassigned. If
withdrawal messages are processed with respect to
one or more, but not all of the Notes represented
by a Book-Entry Note, such Trustee will exchange
such Book-Entry Note for two Book-Entry Notes, one
of which shall represent the Book-Entry Notes for
which withdrawal messages are processed and shall
be cancelled immediately after issuance, and the
other of which shall represent the other Notes
previously represented by the surrendered
Book-Entry Note and shall bear the CUSIP number of
the surrendered Book-Entry Note.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants with respect
to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in
DTC, acting on behalf of such purchaser), such
Participants and, in turn, the related Agent may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures G and H,
respectively. Thereafter, the applicable Trustee
will deliver the withdrawal message and take the
related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than default by the applicable
Agent to perform its obligations hereunder or
under the Distribution Agreement, the Company will
reimburse such Agent or such Trustee as applicable
on an equitable basis for its loss of the use of
funds during the period when the funds were
credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with respect to a Note that
was to have been represented by a Book-Entry
Security also representing other Notes, the
applicable Trustee will provide, in accordance
with Settlement Procedures D and E, for the
authentication and issuance of a Book-Entry Note
representing such remaining Notes and will make
appropriate entries in its records.
Trustee Not to
Risk Funds: Nothing herein shall be deemed to require the
applicable Trustee to risk or expend its own funds
in connection with any payment to the Company,
DTC, the Agents or the purchaser, it being
understood by all parties that payments made by
the applicable Trustee to the Company, DTC, the
Agents or the purchaser shall be made only to
1.2-19
<Page>
the extent that funds are provided to the
applicable Trustee for such purpose.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Notes will be issued in minimum denominations
of U.S. $1,000 and integral multiples of U.S.
$1,000 in excess thereof, or other specified
denominations for foreign currencies.
Interest: Each Note will bear interest, if any, in
accordance with its terms. Interest, if any, on
each Note issued in certificated form will accrue
from the Original Issue Date of a Note. Generally,
each payment of interest on each Note issued in
certificated form will include interest accrued
to, but excluding, the Interest Payment Date
(provided that in the case of Floating Rate Notes
which reset daily or weekly, interest payments
will include interest accrued to, but excluding,
the Record Date immediately preceding the
applicable Interest Payment Date), or Maturity.
Interest payable at Maturity will be payable to
the Person to whom the principal is payable.
Payments of Principal
and Interest: Upon presentment and delivery of the Note, the
Trustee authenticating the same will pay the
principal amount of each Note at Maturity and the
final installment of interest in immediately
available funds. All interest payments on a Note,
other than interest due at Maturity, will be made
by check drawn on such Trustee and mailed by such
Trustee to the person entitled thereto as provided
in the Note. However, the Company may, at its
option, make such payments by wire transfer of
immediately available funds if appropriate wire
transfer instructions have been received in
writing by such Trustee not less than 15 days
prior to the applicable Interest Payment Date.
Generally, the Company will make such payments of
interest by wire transfer of immediately available
funds only to Holders of Notes owning an aggregate
principal amount of Notes in excess of $5,000,000.
Any payment of principal or interest required to
be made on an Interest Payment Date or at Maturity
of a Note which is not a Business Day need not be
made on such day, but may be made on the next
succeeding Business Day with the same force and
effect as if made on the Interest Payment Date or
at Maturity, as the case may be, and no interest
shall accrue from and after such Interest Payment
Date or Maturity.
Each Trustee will be responsible for withholding
taxes on interest or principal paid by it as
required by applicable law, but shall be relieved
from any such responsibility if it acts in good
faith and in reliance upon an opinion of counsel.
1.2-20
<Page>
Notes presented to the applicable Trustee at
Maturity for payment will be cancelled by such
Trustee. All cancelled Notes held by a Trustee
shall be destroyed, and such Trustee shall furnish
to the Company a certificate with respect to such
destruction.
Settlement Procedures: Settlement Procedures with regard to each Note
purchased through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the Company by
telephone of the following Settlement
information with regard to each Note:
1. Name of registered owner.
2. Exact address of registered owner.
3. Taxpayer identification number of
registered owner.
4. Principal amount of the Note.
5. Fixed Rate Notes:
a) interest rate
b) interest payment date and record date
6. Floating Rate Notes:
a) interest rate basis;
b) initial interest rate;
c) spread or spread multiplier, if any;
d) interest rate reset dates;
e) interest rate reset period;
f) interest payment dates;
g) interest payment period;
h) index maturity;
i) calculation agent;
j) maximum interest rate, if any;
k) minimum interest rate, if any;
l) calculation date;
m) interest determination dates;
n) number of days to first interest
payment;
o) amount of first interest payment; and
p) interest per $1,000 of principal amount.
7. Any redemption or repayment provisions.
8. Price to public of the Note.
9. Trade date.
10. Settlement Date (Original Issue Date).
1.2-21
<Page>
11. Maturity.
12. Net proceeds to the Company.
13. Exact name and address of Presenting
Agent.
14. Presenting Agent's commission.
15. Denominations.
16. Place of delivery of the Note by the
applicable Trustee.
17. Whether the Note is senior indebtedness or
senior subordinated indebtedness of the
Company.
B. The Company shall provide to the Calculation
Agent and applicable Trustee by telephone
(confirmed in writing at any time on the same
date) or by electronic transmission the above
Settlement information received from the
Presenting Agent and shall cause the Trustee to
issue, authenticate and deliver the Note or
Notes. The Company also shall provide to such
Trustee and the Presenting Agent a copy of the
applicable Pricing Supplement. The Company will
advise the applicable Trustee by telephone
(confirmed in writing at any time on the same
date) or electronic transmission of the
information set forth in Settlement Procedure
"A" above and the name of the Presenting Agent.
Each such communication by the Company shall
constitute a representation and warranty by the
Company to the applicable Trustee and the
Presenting Agent that (i) such Note is then,
and at the time of issuance and sale thereof
will be, duly authorized for issuance and sale
by the Company, (ii) such Note will conform
with the terms of the Senior Indenture or the
Senior Subordinated Indenture, (iii) after
giving effect to the issuance of such Note and
any other Debt Securities (as defined in the
Registration Statement) to be issued on or
prior to the settlement date for the sale of
such Note, the aggregate amount of Debt
Securities which have been issued and sold by
the Company will not exceed the amount of Debt
Securities registered under the Registration
Statement and (iv) upon authentication and
delivery of such Note, the aggregate initial
offering price of all Notes issued under the
Indenture will not exceed U.S. $1,300,000,000
(except for notes authenticated and delivered
upon registration of transfer of, in exchange
for, or in lieu of Notes pursuant to Sections
3.05 and 3.06 of the Senior Indenture and
Sections 3.05 and 3.06 of the Senior
Subordinated Indenture).
C. The applicable Trustee will complete the
preprinted 5-ply Note packet containing the
following documents in forms approved by the
Company, the Presenting Agent and such Trustee:
1.2-22
<Page>
1. Note with Presenting Agent's customer
confirmation.
2. Stub 1 - for the applicable Trustee.
3. Stub 2 - for the Presenting Agent.
4. Stub 3 - for the Company.
5. Stub 4 - for the Calculation Agent.
D. With respect to each trade, the applicable
Trustee will deliver the Note or Notes and Stub
2 thereof to the Presenting Agent at the
following applicable address: if the Presenting
Agent is Banc of America Securities LLC, then
to Banc of America Securities LLC, Banc of
America Corporate Center, NC1-007-07-01, 100
North Tryon Street, Charlotte, North Carolina
28255, Attention: MTN Program; if the
Presenting Agent is Banc One Capital Markets,
Inc., then to Banc One Capital Markets, Inc.,
Bank One Plaza, Suite 1L1-0595, Chicago, IL
60670, Attention: Investment Grade Securities;
if the Presenting Agent is Bear, Stearns & Co.
Inc., then to Bear, Stearns & Co. Inc., 245
Park Avenue, New York, New York 10167,
Attention: Medium Term Note Program; if the
Presenting Agent is BNP Paribas Securities
Corp., then to BNP Paribas Securities Corp.,
787 7th Avenue, 8th Floor, New York, New York
10019, Attention: Fixed Income Syndicate; if
the Presenting Agent is Deutsche Banc Alex.
Brown Inc., then to Deutsche Banc Alex. Brown
Inc., 31 West 52nd Street, 3rd Floor, New York,
New York 10019, Attention: Daniel Benton; if
the Presenting Agent is J.P. Morgan Securities
Inc., then to J.P. Morgan Securities Inc., 4
New York Plaza, Ground Floor Receiving Window,
New York, New York 10041, Attention: Bob
Schaefer; if the Presenting Agent is Merrill
Lynch, Pierce, Fenner & Smith Incorporated,
then to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Merrill Lynch World Headquarters,
4 World Financial Center, North Tower, 15th
floor, New York, New York 10080, Attention: MTN
Product Management; if the Presenting Agent is
Mizuho International plc, then to Mizuho
International plc, Bracken House, One Friday
Street, London EC4M 9JA, Attention: MTN Trading
Desk; if the Presenting Agent is Salomon Smith
Barney Inc., then to Bank of New York, Dealer
Clearance, One Wall Street - 4th Floor, New
York, New York 10005; if the Presenting Agent
is Utendahl Capital Partners, L.P., then to
Utendahl Capital Partners, L.P., 30 Broad
Street, 42nd Floor, New York, New York 10004,
Attention: Carlos Sanchez and Richard Gordon;
or if the Presenting Agent is Wells Fargo
Brokerage Services, LLC, then to Wells Fargo
Brokerage Services, LLC, 608 2nd Avenue So.,
Minneapolis, Minnesota 55479, Attention:
Michael A. Schaefer. The Trustee will keep
1.2-23
<Page>
Stub 1. The Presenting Agent will acknowledge
receipt of the Note or Notes through a broker's
receipt and will keep Stub 2. Delivery of the
Note or Notes will be made only against such
acknowledgment of receipt. Upon determination
that the Note or Notes has or have been
authorized, delivered and completed as
aforementioned, the Presenting Agent will wire
the net proceeds of the Note or Notes after
deduction of its applicable commission to the
Company pursuant to standard wire instructions
given by the Company.
E. The Presenting Agent will deliver the Note
or Notes (with confirmations), as well as a
copy of the Prospectus and any applicable
Prospectus Supplement or Supplements received
from the applicable Trustee and/or Company to
the purchaser against payment in immediately
available funds.
F. Such Trustee will send Stub 3 to the
Company.
Settlement Procedures
Timetable: For offers accepted by the Company, Settlement
Procedures "A" through "F" set forth above
shall be completed on or before the respective
times set forth below:
SETTLEMENT PROCEDURE TIME
A-B 2:00 p.m. on Business Day
prior to settlement
C-D 2:15 p.m. on day of
settlement
E 3:00 p.m. on day of
settlement
F 5:00 p.m. on day of
settlement
Failure to Settle: In the event that a purchaser of a Note from
the Company shall either fail to accept
delivery of or make payment for a Note on the
date fixed for settlement, the Presenting Agent
will forthwith notify the applicable Trustee
and the Company by telephone, confirmed in
writing, and return the Note to such Trustee.
The applicable Trustee, upon receipt of the
Note from the Presenting Agent, will
immediately advise the Company and the Company
will promptly arrange to credit the account of
the Presenting Agent in an amount of
immediately available funds equal to the amount
previously paid by such Agent in settlement for
the Note. Such credits will be made on the
settlement date if possible, and in any event
not later than the Business Day following the
settlement date; provided that the Company has
received notice on the same day. If such
failure shall have occurred for any reason
other than failure by such Agent to perform its
obligations hereunder or under the Distribution
Agreement, the Company will reimburse such
Agent on an equitable basis for its loss of the
use of funds during the period when the funds
were credited to the account of the Company.
1.2-24
<Page>
Immediately upon receipt of the Note in respect
of which the failure occurred, the Trustee will
cancel and destroy the Note, make appropriate
entries in its records to reflect the fact that
the Note was never issued, and accordingly
notify the Company in writing.
Trustee Not to
Risk Funds: Nothing herein shall be deemed to require the
applicable Trustee to risk or expend its own
funds in connection with any payment to the
Company, the Agents or the purchaser, it being
understood by all parties that payments made by
the applicable Trustee to the Company, the
Agents or the purchaser shall be made only to
the extent that funds are provided to the
applicable Trustee for such purpose.
1.2-25