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EXHIBIT 1.2
ENRON CORP.
ADMINISTRATIVE PROCEDURES
FOR FIXED RATE AND FLOATING RATE MEDIUM-TERM NOTES
(Dated as of _____, ____)
Medium-Term Notes Due Nine Months or More From Date of Issue (the
"Notes") are to be offered on a continuous basis by Enron Corp., an Oregon
corporation (the "Company"), to or through __________ ( the "Agent") pursuant
to a Distribution Agreement, dated ________, ____ (the "Distribution
Agreement"), by and among the Company and the Agent. The Distribution Agreement
provides both for the sale of Notes by the Company to the Agent as principal
for resale to investors and other purchasers and for the sale of Notes by the
Company directly to investors (as may from time to time be agreed to by the
Company and the Agent), in which case the Agent will act as an agent of the
Company in soliciting purchases of Notes.
Unless otherwise agreed by the Agent and the Company, Notes will be
purchased by the related Agent as principal. Such purchases will be made in
accordance with terms agreed upon by the related Agent and the Company (which
terms shall be agreed upon orally, with written confirmation prepared by the
related Agent and mailed to the Company). If agreed upon by any Agent and the
Company, the Agent, acting solely as agent for the Company and not as
principal, will use reasonable efforts to solicit offers to purchase the Notes.
Only those provisions in these Administrative Procedures that are applicable to
the particular role to be performed by the related Agent shall apply to the
offer and sale of the relevant Notes.
The Notes will be issued as a series of debt securities under an
Indenture, dated as of November 1, 1985, as amended, supplemented or modified
from time to time (the "Indenture"), between the Company and Bank of New York,
as trustee (together with any successor in such capacity, the "Trustee"). The
Company has filed a Registration Statement with the Securities and Exchange
Commission (the "Commission") registering, among other securities, debt
securities (which includes the Notes) (the "Registration Statement", which term
shall include any additional registration statements filed in connection with
the Notes). The most recent base prospectus deemed part of the Registration
Statement, as supplemented with respect to the Notes, is herein referred to as
the "Prospectus". The most recent supplement to the Prospectus setting forth
the purchase price, interest rate or formula, maturity date and other terms of
the Notes (as applicable) is herein referred to as the "Pricing Supplement".
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes without coupons (each, a "Global Note")
delivered to the Trustee, as agent for The Depository Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated
form (each, a "Certificated Note") delivered to the investor or other purchaser
thereof or a person designated by such investor or other purchaser.
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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 Certificated
Notes will be issued in accordance with the procedures set forth in Part III
hereof. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture or the Notes, as the case may be.
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 (each, an
"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
nine months or more from its
Original Issue Date (the "Stated
Maturity Date") selected by the
investor or other purchaser and
agreed to by the Company.
Registration: Unless otherwise provided in the
applicable Pricing Supplement,
Notes will be issued only in fully
registered form.
Denominations: Unless otherwise provided in the
applicable Pricing Supplement, the
Notes will be issued in
denominations of U.S.$1,000 and
integral multiples of U.S.$1,000.
Interest Rate Bases applicable
to Floating Rate Notes: Unless otherwise provided in the
applicable Pricing Supplement,
Floating Rate Notes will bear
interest at a rate or rates
determined by reference to the CD
Rate, the CMT Rate, the Commercial
Paper Rate, the Eleventh District
Cost of Funds Rate, the Federal
Funds Rate, LIBOR, the Prime Rate,
the Treasury Rate, or such other
interest rate basis or formula as
may be set forth in applicable
Pricing Supplement, or by reference
to two or more such rates, as
adjusted by the Spread and/or
Spread Multiplier, if any,
applicable to such Floating Rate
Notes.
Redemption/Repayment: The Notes will be subject to
redemption by the Company in
accordance with the terms of the
Notes, which will be fixed at the
time of sale and set forth in the
applicable Pricing Supplement. If
no Initial Redemption Date is
indicated
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with respect to a Note, such Note
will not be redeemable prior to its
Stated Maturity Date.
The Notes will be subject to
repayment at the option of the
Holders thereof in accordance with
the terms of the Notes, which will
be fixed at the time of sale and
set forth in the applicable Pricing
Supplement. If no Optional
Repayment Date is indicated with
respect to a Note, such Note will
not be repayable at the option of
the Holder prior to its Stated
Maturity Date.
Calculation of Interest: In 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.
The interest rate on each Floating
Rate Note will be calculated by
reference to the specified Interest
Rate Basis or Bases plus or minus
the applicable Spread, if any,
and/or multiplied by the applicable
Spread Multiplier, if any.
Unless otherwise provided in the
applicable Pricing Supplement,
interest on each Floating Rate Note
will be calculated by multiplying
its principal amount by an accrued
interest factor. Such accrued
interest factor is computed by
adding the interest factor
calculated for each day in the
period for which accrued interest
is being calculated. Unless
otherwise provided in the
applicable Pricing Supplement, the
interest factor for each such day
is computed by dividing the
interest rate applicable to such
day by 360 if the CD Rate,
Commercial Paper Rate, Eleventh
District Cost of Funds Rate,
Federal Funds Rate, LIBOR or Prime
Rate is an applicable Interest Rate
Basis, or by the actual number of
days in the year if the CMT Rate or
Treasury Rate is an applicable
Interest Rate Basis. As provided in
the applicable Pricing Supplement,
the interest factor for Notes for
which the interest rate is
calculated with reference to two or
more Interest Rate Bases will be
calculated in each period in the
same manner as if only one of the
applicable Interest Rate Bases
applied.
Interest: General. Each Note will bear
interest in accordance with its
terms. Unless otherwise provided in
the applicable Pricing Supplement,
interest on each Note will accrue
from and including the Original
Issue Date of such Note for the
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first interest period or from the
most recent Interest Payment FFFF
Date (as defined below) to which
interest has been paid or duly
provided for all subsequent interest
periods to but excluding applicable
Interest Payment Date or the Stated
Maturity Date or date of earlier
redemption or repayment , as the
case may be (the Stated Maturity
Date or date of earlier redemption
or repayment is referred to herein
as the "Maturity Date" with respect
to the principal repayable on such
date).
If an Interest Payment Date or the
Maturity Date with respect to any
Fixed Rate Note falls on a day that
is not a Business Day (as defined
below), the required payment of
principal, premium, if any, or
interest to be made on such 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 such day,
and no interest shall accrue on
such payment for the period from
and after such day to the next
succeeding Business Day. If an
Interest Payment Date other than
the Maturity Date with respect to
any Floating Rate Note would
otherwise fall on a day that is not
a Business Day, such Interest
Payment Date will be postponed to
the next succeeding Business Day,
except that in the case of a Note
for which LIBOR is an applicable
Interest Rate Basis, if such
Business Day falls in the next
succeeding calendar month, such
Interest Payment Date will be the
immediately preceding Business Day.
If the Maturity Date with respect
to any Floating Rate Note falls on
a day that is not a Business Day,
the required payment of principal,
premium, if any, or interest to be
made on such 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 such day, and no interest
shall accrue on such payment for
the period from and after the
Maturity Date to the next
succeeding Business Day. Unless
otherwise provided in the
applicable Pricing Supplement,
"Business Day" has the meaning
specified in the Prospectus.
Regular Record Dates. Unless
otherwise provided in the
applicable Pricing Supplement, the
"Regular Record Date" for a Note
shall be the date 15 calendar days
(whether or not a Business Day)
preceding the applicable Interest
Payment Date.
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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 Note
originally issued between a Regular
Record Date and an Interest Payment
Date will occur on the Interest
Payment Date immediately following
the next succeeding Regular Record
Date.
Unless otherwise provided in the
applicable Pricing Supplement,
interest payments on Fixed Rate
Notes will be made semiannually in
arrears on May 15 and November 15
of each year and on the Maturity
Date, while interest payments on
Floating Rate Notes will be made as
specified in the applicable Pricing
Supplement.
Acceptance and Rejection of Offers
from Solicitation as Agent: If agreed upon by the Agent and the
Company, then the Agent acting
solely as agent for the Company and
not as principal will solicit
purchases of the Notes. The Agent
will communicate to the Company,
orally or in writing, each
reasonable offer to purchase Notes
solicited by the Agent on an agency
basis, other than those offers
rejected by the Agent. The Agent
has the right, in its discretion
reasonably exercised, to reject any
proposed purchase of Notes, as a
whole or in part, and any such
rejection shall not be a breach of
the Agent's agreement contained in
the Distribution Agreement. The
Company has the sole right to
accept or reject any proposed
purchase of Notes, in whole or in
part, and any such rejection shall
not be a breach of the Company's
agreement contained in the
Distribution Agreement. The Agent
has agreed to make reasonable
efforts to assist the Company in
obtaining performance by each
purchaser whose offer to purchase
Notes has been solicited by the
Agent and accepted by the Company.
Preparation of Pricing Supplement: If any offer to purchase a Note is
accepted by the Company, the
Company will promptly prepare a
Pricing Supplement reflecting the
terms of such Note and file such
Pricing Supplement with the
Commission in accordance with the
Securities Act of 1933, as amended.
Information to be included in the
Pricing Supplement shall include:
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1. the name of the Company;
2. the title of the Notes
including series designation,
if any;
3. the date of the Pricing
Supplement and the date of
the Prospectus and Prospectus
Supplement to which the
Pricing Supplement relates:
4. the name of the Agent;
5. whether such Notes are being
sold to the Agent as
principal or to an investor
to other purchaser through
the Agent acting as agent
for the Company;
6. with respect to Notes sold
to the Agent as principal,
whether such Notes will be
resold by the Agent to
investors and other
purchasers at (i) a fixed
public offering price of a
specified percentage of
their principal amount or
(ii) at varying prices
related to prevailing market
prices at the time of resale
to be determined by the
Agent;
7. with respect to Notes sold
to an investor or other
purchaser through the Agent
acting as agent for the
Company, whether such Notes
will be sold at (i) 100% of
their principal amount or
(ii) a specified percentage
of their principal amount;
8. the Agent's discount or
commission;
9. Net proceeds to the Company;
10. the Principal Amount,
Specified Currency, Original
Issue Date, Stated Maturity
Date, Interest Payment
Date(s), Authorized
Denomination, Initial
Redemption Date, if any,
Initial Redemption
Percentage, if any, Annual
Redemption Percentage
Reduction, if any, Optional
Repayment Date(s), if any,
Exchange Rate Agent, if any,
and, in the case of Fixed
Rate Notes, the Interest
Rate, and whether such Fixed
Rate Note is an Original
Issue Discount Note (and, if
so, the Issue Price), and,
in the case of
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Floating Rate Notes, the
Interest Category, the
Interest Rate Basis or
Bases, the Day Count
Convention, Index Maturity
(if applicable), Initial
Interest Rate, if any,
Maximum Interest Rate, if
any, Minimum Interest Rate,
if any, Initial Interest
Reset Date, Interest Reset
Dates, Spread and/or Spread
Multiplier, if any, and
Calculation Agent; and
11. any other additional
provisions of the Notes
material to investors or
other purchasers of the
Notes not otherwise
specified in the Prospectus.
The Company shall use its
reasonable best efforts to send
such Pricing Supplement by telecopy
or overnight express (for delivery
by the close of business on the
applicable trade date, but in no
event later than 11:00 a.m. New
York City time, on the Business Day
following the applicable trade
date) to the Agent who made or
presented the offer to purchase the
applicable Note and the Trustee at
the following applicable address:
if to the Agent to the address set
forth in the notice provisions of
the Distribution Agreement or an
address otherwise designated by the
Agent; and if to the Trustee, to:
Bank of New York, 2 North LaSalle
Street, 10th Floor, Chicago,
Illinois 60602, Attention: Frank A.
Pierson, (312) 827-8525,
telecopier: (312) 827-8522. For
record keeping purposes, one copy
of such Pricing Supplement shall
also be mailed or telecopied to
Bracewell & Patterson, L.L.P.,
South Tower Pennzoil Place, Suite
2900, 711 Louisiana Street,
Houston, Texas 77002-2781,
Attention: Gary W. Orloff,
telecopier: (713) 221-2166.
In each instance that a Pricing
Supplement is prepared, the Agent
will provide a copy of such Pricing
Supplement to each investor or
purchaser of the relevant Notes or
the Agent. Pursuant to Rule 434
("Rule 434") of the Securities Act
of 1933, as amended, the Pricing
Supplement may be delivered
separately from the Prospectus.
Outdated Pricing Supplements (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,
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constitute "settlement". Offers
accepted by the Company will be
settled in three Business Days, or
at such time as the purchaser, the
Agent and the Company shall agree,
pursuant to the timetable for
settlement set forth in Parts II
and III hereof under "Settlement
Procedure Timetable" with respect
to Global Notes and Certificated
Notes, respectively (each such date
fixed for settlement is hereinafter
referred to as a "Settlement
Date"). If procedures A and B of
the applicable Settlement
Procedures with respect to a
particular offer are not completed
on or before the time set forth
under the applicable "Settlement
Procedures Timetable", such offer
shall not be settled until the
Business Day following the
completion of settlement procedures
A and B or such later date as the
purchaser and the Company shall
agree.
The foregoing settlement procedures
may be modified with respect to any
purchase of Notes by the Agent as
principal if so agreed by the
Company and the Agent.
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 Notes
being sold by the Company, the
Company will promptly advise the
Agent and the Trustee by facsimile
transmission and the Agent will
forthwith suspend solicitation of
offers to purchase such Notes. The
Agent will telephone the Company
with recommendations as to the
changed interest rates or other
variable terms. At such time as the
Company notifies the Agent and the
Trustee of the new interest rates
or other variable terms, the Agent
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
Notes at a new interest rate or new
variable term, the Company, the
Agent and the Trustee shall follow
the procedures set forth under the
applicable "Settlement Procedures".
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Suspension of Solicitation;
Amendment or Supplement: The Company may instruct the Agent
to suspend solicitation of offers
to purchase Notes at any time. Upon
receipt of such instructions, the
Agent will forthwith suspend
solicitation of offers to purchase
from the Company until such time as
the Company has advised the Agent
that solicitation of offers to
purchase may be resumed. If the
Company decides to amend or
supplement the Registration
Statement or the Prospectus (other
than to establish or change
interest rates or formulas,
maturities, prices or other similar
variable terms with respect to the
Notes), it will promptly advise the
Agent and will furnish the Agent
and its counsel with copies of the
proposed amendment or supplement.
Copies of such amendment or
supplement will be delivered or
mailed to the Agent, its counsel
and the Trustee in quantities which
such parties may reasonably request
at the address set forth in the
notice provisions of the
Distribution Agreement; the
Trustee, to: Bank of New York, 2
North LaSalle Street, 10th Floor,
Chicago, Illinois 60602, Attention:
Frank A. Pierson, (312) 827-8525,
telecopier: (312) 827-8522. For
record keeping purposes, one copy
of each such amendment or
supplement shall also be mailed or
telecopied to Bracewell &
Patterson, L.L.P., South Tower
Pennzoil Place, Suite 2900, 711
Louisiana Street, Houston, Texas
77002-2781, Attention: Gary W.
Orloff, (713) 221-1306, telecopier:
(713) 221-2166.
In the event that at the time the
solicitation of offers to purchase
from the Company is suspended
(other than to establish or change
interest rates or formulas,
maturities, prices or other similar
variable terms with respect to the
Notes) there shall be any offers to
purchase Notes that have been
accepted by the Company which have
not been settled, the Company will
promptly advise the Agent and the
Trustee whether such offers 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 offers. 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 offers
may not be settled or that copies
of such Prospectus may not be so
delivered.
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Delivery of Prospectus and
applicable Pricing Supplement: A copy of the most recent
Prospectus and the applicable
Pricing Supplement, which pursuant
to Rule 434 may be delivered
separately from the Prospectus,
must accompany or precede the
earlier of (a) the written
confirmation of a sale sent to an
investor or other purchaser or its
agent and (b) the delivery of Notes
to an investor or other purchaser
or its agent.
Authenticity of Signatures: The Agent will have no obligation
or liability to the Company or the
Trustee in respect of the
authenticity of the signature of
any officer, employee or agent of
the Company or the Trustee on any
Note.
Documents Incorporated by
Reference: The Company shall supply the Agent
with an adequate supply of all
documents incorporated by reference
in the Registration Statement and
the Prospectus.
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, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter
of Representations from the Company and the Trustee to DTC, dated May 17, 2000,
and a Certificate Agreement, dated August 17, 1989, between the Trustee and
DTC, as amended (the "Certificate Agreement"), 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
Original Issue Date, Specified
Currency, Interest Rate, Default
Rate, redemption and/or repayment
terms, if any, and Stated Maturity
Date (collectively, the "Fixed Rate
Terms") will be represented
initially by a single Global Note;
and all Floating Rate Notes issued
in book-entry form having the same
Original Issue Date, Specified
Currency, Interest Rate Basis,
which may be the CD Rate, the CMT
Rate, the Commercial Paper Rate,
the Eleventh District Cost of Funds
Rate, the Federal Funds Rate,
LIBOR, the Prime Rate or the
Treasury Rate or any other interest
rate basis or formula, and Spread
and/or Spread Multiplier, if any),
Day Count Convention, Initial
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Interest Rate, Index Maturity (if
applicable), Minimum Interest Rate,
if any, Maximum Interest Rate, if
any, redemption and/or repayment
terms, if any, Interest Payment
Dates, Initial Interest Reset Date,
Interest Reset Dates and Stated
Maturity Date (collectively, the
"Floating Rate Terms") will be
represented initially by a single
Global Note.
For other variable terms with
respect to the Fixed Rate Notes and
Floating Rate Notes, see the
Prospectus and the applicable
Pricing Supplement.
Owners of beneficial interests in
Global Notes will be entitled to
physical delivery of Certificated
Notes equal in principal amount to
their respective beneficial
interests only upon certain limited
circumstances described in the
Prospectus.
Identification: The Company has arranged with the
CUSIP Service Bureau of Standard &
Poor's (the "CUSIP Service Bureau")
for the reservation of one series
of CUSIP numbers, which series
consists of approximately 900 CUSIP
numbers which have been reserved
for and relating to Global Notes
and the Company has delivered to
each of the Trustee and DTC such
list of such CUSIP numbers. The
Company will assign CUSIP numbers
to Global 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 Global Notes. The
Trustee will notify the Company at
any time when fewer than 100 of the
reserved CUSIP numbers remain
unassigned to Global Notes, and, if
it deems necessary, the Company
will reserve and obtain additional
CUSIP numbers for assignment to
Global Notes. Upon obtaining such
additional CUSIP numbers, the
Company will deliver a list of such
additional numbers to the Trustee
and DTC. Notes issued in book-entry
form in excess of $400,000,000 (or
the equivalent thereof in one or
more foreign currencies) and
otherwise required to be
represented by the same Global
Certificate will instead be
represented by two or more Global
Certificates which shall all be
assigned the same CUSIP number.
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Registration: Unless otherwise specified by DTC,
each Global Note will be registered
in the name of Cede & Co., as
nominee for DTC, on the register
maintained by the Trustee under the
Indenture. The beneficial owner of
a Note issued in book-entry form
(i.e., an owner of a beneficial
interest in a Global 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 beneficial ownership
interests in a Global Note will be
accomplished by book entries made
by DTC and, in turn, by
Participants (and in certain cases,
one or more indirect participants
in DTC) acting on behalf of
beneficial transferors and
transferees of such Global Note.
Exchanges: The 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 Global Notes outstanding on
such date that represent Global
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 30 days after such written
notice is delivered and at least 30
days before the next Interest
Payment Date for the related Notes
issued in book-entry form, on which
such Global Notes shall be
exchanged for a single replacement
Global Note; and (c) a new CUSIP
number, obtained from the Company,
to be assigned to such replacement
Global Note. Upon receipt of such a
notice, DTC will send to its
Participants (including the
Trustee) a written reorganization
notice to the effect that such
exchange will occur on such date.
Prior to the specified exchange
date, the Trustee will deliver to
the CUSIP Service Bureau written
notice setting
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forth such exchange date and the
new CUSIP number and stating that,
as of such exchange date, the CUSIP
numbers of the Global Notes to be
exchanged will no longer be valid.
On the specified exchange date, the
Trustee will exchange such Global
Notes for a single Global Note
bearing the new CUSIP number and
the CUSIP numbers of the exchanged
Notes will, in accordance with
CUSIP Service Bureau procedures, be
canceled and not immediately
reassigned. Notwithstanding the
foregoing, if the Global Notes to
be exchanged exceed $400,000,000
(or the equivalent thereof in one
or more foreign currencies) in
aggregate principal amount, one
replacement Note will be
authenticated and issued to
represent each $400,000,000 (or the
equivalent thereof in one or more
foreign currencies) in aggregate
principal amount of the exchanged
Notes and an additional Global Note
or Notes will be authenticated and
issued to represent any remaining
principal amount of such Global
Notes (See "Denominations" below).
Denominations: Unless otherwise provided in the
applicable Pricing Supplement,
Notes issued in book-entry form
will be issued in denominations of
U.S.$1,000 and integral multiples
of U.S.$1,000. Global Notes will
not be denominated in excess of
$400,000,000 (or the equivalent
thereof in one or more foreign
currencies). If one or more Notes
are issued in book-entry form
having an aggregate principal
amount of $400,000,000 (or the
equivalent thereof in one or more
foreign currencies) and would, but
for the preceding sentence, be
represented by a single Note, then
one Note will be issued to
represent each $400,000,000 (or the
equivalent thereof in one or more
foreign currencies) of principal
amount of such Notes issued in
book-entry form and an additional
Global Note or Notes will be issued
to represent any remaining
aggregate principal amount of such
Note or Notes issued in book-entry
form. In such a case, each of the
Global Notes representing Notes
issued in book-entry form shall be
assigned the same CUSIP number.
Payments of Principal
and Interest: Payments of Interest Only. Promptly
after each Regular Record Date, the
Trustee will deliver to the Company
and DTC a written notice specifying
by CUSIP number the amount of
interest to be paid on each Global
Note on the
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following Interest Payment Date
(other than an Interest Payment
Date coinciding with the Maturity
Date) and the total of such
amounts. DTC will confirm the
amount payable on each Global Note
on such Interest Payment Date by
reference to the daily bond reports
published by Standard & Poor's. On
such Interest Payment Date, the
Company will pay to the Trustee in
immediately available funds an
amount sufficient to pay the
interest then due and owing on the
Global Notes, and upon receipt of
such funds from the Company, the
Trustee in turn will pay to DTC
such total amount of interest due
on such Global Notes (other than on
the Maturity Date) which is payable
in U.S. dollars, at the times and
in the manner set forth below under
"Manner of Payment". The Trustee
shall make payment of that amount
of interest due and owing on any
Global Notes that Participants have
elected to receive in foreign
currency directly to such
Participants.
Notice of Interest Payments and
Regular Record Dates. Promptly
after each Interest Determination
Date for Floating Rate Notes issued
in book-entry form, the Trustee
will notify each of Moody's
Investors Service and Standard &
Poor's of the interest rates
determined as of such Interest
Determination Date.
Payments at Maturity. On or about
the first Business Day of each
month, the Trustee will deliver to
the Company and DTC a written list
of principal, premium, if any, and
interest to be paid on each Global
Note maturing or otherwise becoming
due in the following month. The
Trustee, the Company and DTC will
confirm the amounts of such
principal, premium, if any, and
interest payments with respect to
each such Global Note on or about
the fifth Business Day preceding
the Maturity Date of such Global
Note. On the Maturity Date, the
Company will pay to the Trustee in
immediately available funds an
amount sufficient to make the
required payments, and upon receipt
of such funds the Trustee in turn
will pay to DTC the principal
amount of Global Notes, together
with premium, if any, and interest
due on the Maturity Date, which are
payable in U.S. dollars, at the
times and in the manner set forth
below under "Manner of Payment".
The Trustee shall make payment of
the principal, premium, if any, and
interest to be paid on the Maturity
Date of each Global
15
Note that Participants have elected
to receive in foreign or composite
currencies directly to such
Participants. Promptly after (i)
payment to DTC of the principal,
premium, if any, and interest due
on the Maturity Date of such Global
Note which are payable in U.S.
dollars and (ii) payment of the
principal, premium, if any, and
interest due on the Maturity Date
of such Global Note to those
Participants who have elected to
receive such payments in foreign or
composite currencies, the Trustee
will cancel such Global Note and
deliver it to the Company with an
appropriate debit advice. On the
first Business Day of each month,
the Trustee will deliver to the
Company a written statement
indicating the total principal
amount of outstanding Global Notes
as of the close of business on the
immediately preceding Business Day.
Manner of Payment. The total amount
of any principal, premium, if any,
and interest due on Global Notes on
any Interest Payment Date or the
Maturity Date, as the case may be,
which is payable in U.S. dollars
shall be paid by the Company to the
Trustee in funds available for use
by the Trustee no later than 10:00
a.m., New York City time, on such
date. The Company will make such
payment on such Global Notes to an
account specified by the Trustee.
Upon receipt of such funds, the
Trustee will pay by separate wire
transfer (using Fedwire message
entry instructions in a form
previously specified by DTC) to an
account at the Federal Reserve Bank
of New York previously specified by
DTC, in funds available for
immediate use by DTC, each payment
in U.S. dollars of principal,
premium, if any, and interest due
on Global Notes 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 the beneficial interests in
such Global Notes are recorded in
the book-entry system maintained by
DTC. Neither the Company nor the
Trustee shall have any
responsibility or liability for the
payment in U.S. dollars by DTC of
the principal of, or premium, if
any, or interest on, the Global
Notes. The Trustee shall make all
payments of principal, premium, if
any, and interest on each Global
Note that Participants have elected
to receive in foreign or composite
currencies directly to such
Participants.
16
Withholding Taxes. The amount of
any taxes required under applicable
law to be withheld from any
interest payment on a Global 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 Global
Note.
Settlement Procedures: Settlement Procedures with regard
to each Note in book-entry form
sold by the Agent, as agent of the
Company, or purchased by the Agent,
as principal, will be as follows:
A. The Agent will advise the Company by telephone, confirmed by
facsimile, of the following settlement information:
1. Principal amount, Authorized Denomination, and Specified
Currency.
2. Exchange Rate Agent, if any.
3. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(b) Floating Rate Notes:
(i) Interest Rate Basis or Bases.
(ii) Initial Interest Rate.
(iv) Spread and/or Spread Multiplier, if any.
(v) Interest Reset Dates.
(vi) Interest Rate Reset Period.
(vii) Interest Payment Dates.
(viii) Interest Payment Period.
17
(ix) Record Dates.
(x) Index Maturity, if any.
(xi) Maximum and/or Minimum Interest Rates, if
any.
(xii) Day Count Convention.
(xiii) Calculation Agent.
4. Price to public, if
any, of such Note (or
whether such Note is
being offered at
varying prices
relating to
prevailing market
prices at time of
resale as determined
by the Agent).
5. Trade Date.
6. Settlement Date
(Original Issue Date).
7. Stated Maturity Date.
8. Redemption provisions,
if any, including:
Redemption Date,
Initial Redemption
Percentage and
Annual Redemption
Percentage Reduction.
9. Optional Repayment
Dates, if any.
10. Net proceeds to the
Company.
11. The Agent's discount
or commission.
12. Whether such Note is
being sold to the
Agent as principal or
to an investor or
other purchaser
through the Agent
acting as agent for
the Company.
13. Whether such Note is
being issued with
Original Issue
Discount and the terms
thereof.
14. Such other information
specified with respect
to such Note
(whether by Addendum
or otherwise).
18
B. The Company will assign a
CUSIP number to the Global
Note representing such Note
and then advise the Trustee
by facsimile transmission or
other electronic
transmission of the above
settlement information
received from the Agent,
such CUSIP number and the
name of the Agent. The
Company will also advise the
Agent of the CUSIP number
assigned to the Global Note.
C. The Trustee will communicate
to DTC and the Agent through
DTC's Participant Terminal
System a pending deposit
message specifying the
following settlement
information:
1. The information set forth in the Settlement Procedure A.
2. Identification numbers of the participant accounts
maintained by DTC on behalf of the Trustee and the Agent.
3. Identification of the Global Note as a Fixed Rate Global
Note or Floating Rate Global 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 Interest Payment Date) and, if then
calculable, the amount of interest payable on such
Interest Payment Date (which amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Note representing such Note.
6. Whether such Global Note represents any other Notes
issued or to be issued in book-entry form.
DTC will arrange for each
pending deposit message
described above to be
transmitted to Standard &
Poor's Corporation, which
will use the information in
19
the message to include
certain terms of the related
Global Note in the
appropriate daily bond
report published by Standard
& Poor's Corporation.
D. The Trustee will complete
and authenticate the Global
Note representing such Note.
E. DTC will credit such Note to
the participant account of
the Trustee maintained by
DTC.
F. The Trustee will enter an
SDFS deliver order through
DTC's Participant Terminal
System instructing DTC (i)
to debit such Note to the
Trustee's participant
account and credit such Note
to the participant account
of the Agent maintained by
DTC and (ii) to debit the
settlement account of the
Agent and credit the
settlement account of the
Trustee maintained by DTC,
in an amount equal to the
price of such Note less such
Agent's discount or
underwriting commission, as
applicable. Any entry of
such a deliver order shall
be deemed to constitute a
representation and warranty
by the Trustee to DTC that
(i) the Global Note
representing such Note has
been issued and
authenticated and (ii) the
Trustee is holding such
Global Note pursuant to the
Certificate Agreement.
G. In the case of Notes in
book-entry form sold through
the Agent, as agent, the
Agent will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit
such Note to the 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
Agent maintained by DTC in
an amount equal to the
initial public offering
price of such Note.
H. Transfers of funds in
accordance with SDFS deliver
orders described in
Settlement Procedures F and
G will be settled in
accordance with SDFS
operating procedures in
effect on the Settlement
Date.
20
I. Upon receipt, the Trustee
will pay the Company, by
wire transfer of immediately
available funds to an
account specified by the
Company to the Trustee from
time to time, the amount
transferred to the Trustee
in accordance with
Settlement Procedure F.
J. The Trustee will send a copy
of the Global Note by first
class mail to the Company
together with a statement
setting forth the principal
amount of Notes Outstanding
as of the related Settlement
Date after giving effect to
such transaction and all
other offers to purchase
Notes of which the Company
has advised the Trustee but
which have not yet been
settled.
K. If such Note was sold
through the Agent, as agent,
the Agent will confirm the
purchase of such Note to the
investor or other 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
investor or other purchaser.
Settlement Procedures Timetable: For offers to purchase Notes
accepted by the Company, Settlement
Procedures A through K set forth
above shall be completed as soon as
possible following the trade but not
later than the respective times (New
York City time) set forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade date or within one
hour following the trade
B As soon as practicable following the trade,
but in no event later than 12:00 noon on the
Business Day following the trade date
C No later than the close of business on the
trade date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on Settlement Date
H 4:00 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
21
Settlement Procedure H is subject
to extension in accordance with any
extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the
Settlement Date.
If settlement of a Note issued in
book-entry form is rescheduled or
canceled, the Trustee will deliver
to DTC, through DTC's Participant
Terminal System, a cancellation
message to such effect by no later
than 5:00 p.m., New York City time,
on the Business Day immediately
preceding the scheduled Settlement
Date.
Failure to Settle: If the Trustee fails to enter an
SDFS deliver order with respect to
a Note issued in book-entry form
pursuant to Settlement Procedure F,
the Trustee may deliver to DTC,
through DTC's Participant Terminal
System, as soon as practicable a
withdrawal message instructing DTC
to debit such Note to the
participant account of the Trustee
maintained at DTC. DTC will process
the withdrawal message, provided
that such participant account
contains a principal amount of the
Global Note representing such Note
that is at least equal to the
principal amount to be debited. If
withdrawal messages are processed
with respect to all the Notes
represented by a Global Note, the
Trustee will mark such Global Note
"canceled", make appropriate
entries in its records and send
certification of destruction of
such canceled Global Note to the
Company. The CUSIP number assigned
to such Global Note shall, in
accordance with CUSIP Service
Bureau procedures, be canceled and
not immediately reassigned. If
withdrawal messages are processed
with respect to a portion of the
Notes represented by a Global Note,
the Trustee will exchange such
Global Note for two Global Notes,
one of which shall represent the
Global Notes for which withdrawal
messages are processed and shall be
canceled immediately after issuance
and the other of which shall
represent the other Notes
previously represented by the
surrendered Global Note and shall
bear the CUSIP number of the
surrendered Global Note.
In the case of any Note in
book-entry form sold through the
Agent, as agent, if the purchase
price for any such Note is not
timely paid to the Participants
with respect thereto by the
beneficial investor or other
purchaser thereof (or a person,
including an indirect participant
in DTC, acting on
22
behalf of such investor or other
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 F
and G, respectively. Thereafter,
the Trustee will deliver the
withdrawal message and take the
related actions described in the
preceding paragraph. If such
failure shall have occurred for any
reason other than default by the
Agent to perform its obligations
hereunder or under the Distribution
Agreement, the Company will
reimburse the Agent on an equitable
basis for its reasonable 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 Note in book-entry form, 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 Global Note also
representing other Notes, the
Trustee will provide, in accordance
with Settlement Procedure D, for
the authentication and issuance of
a Global Note representing such
remaining Notes and will make
appropriate entries in its records.
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the
applicable Pricing Supplement, the
Certificated Notes will be issued
in denominations of U.S.$1,000 and
integral multiples of U.S.$1,000.
Payments of Principal,
Premium, if any, and Interest: Upon presentment and delivery of
the Certificated Note, the Trustee
upon receipt of immediately
available funds from the Company
will pay the principal of, premium,
if any, and interest on, each
Certificated Note on the Maturity
Date in immediately available
funds. All interest payments on a
Certificated Note, other than
interest due on the Maturity Date,
will be made by check mailed to the
address of the person entitled
thereto as such address shall
appear in the Security Register;
provided, however, that Holders of
$10,000,000 or more in aggregate
principal amount of Certificated
Notes (whether having identical or
different terms and provisions)
shall be entitled to receive such
23
interest payments by wire transfer
of immediately available funds if
appropriate wire transfer
instructions have been received in
writing by the Trustee not less
than 15 calendar days prior to the
applicable Interest Payment Date.
The Trustee will provide monthly to
the Company a list of the
principal, premium, if any, and
interest to be paid on Certificated
Notes maturing in the next
succeeding month. The Trustee will
be responsible for withholding
taxes on interest paid as required
by applicable law.
Certificated Notes presented to the
Trustee on the Maturity Date for
payment will be canceled by the
Trustee. All canceled Certificated
Notes held by the Trustee shall be
destroyed, and the Trustee shall
furnish to the Company a
certificate with respect to such
destruction.
Settlement Procedures: Settlement Procedures with regard
to each Certificated Note purchased
by the Agent, as principal, or
through the Agent, as agent, shall
be as follows:
A. The Agent will advise the Company by telephone of the
following Settlement information with regard to each
Certificated Note:
1. Exact name in which the Certificated Note(s) is to be
registered (the "Registered Owner").
2. Exact address or addresses of the Registered Owner for
delivery, notices and payments of principal, premium, if
any, and interest.
3. Taxpayer identification number of the Registered Owner.
4. Principal amount, Authorized Denomination and Specified
Currency.
5. Exchange Rate Agent, if any.
6. (a) Fixed Rate Notes:
(i) Interest Rate.
24
(ii) Interest Payment Dates.
(b) Floating Rate Notes:
(i) Interest Rate Basis or Bases.
(ii) Initial Interest Rate.
(iv) Spread and/or Spread Multiplier, if any.
(v) Interest Reset Dates.
(vi) Interest Rate Reset Period.
(vii) Interest Payment Dates.
(viii) Interest Payment Period.
(ix) Record Dates.
(x) Index Maturity, if any.
(xi) Maximum and/or Minimum Interest Rates, if
any.
(xii) Calculation Agent.
7. Price to public of
such Certificated
Note (or whether such
Note is being offered
at varying prices
relating to
prevailing market
prices at time of
resale as determined
by the Agent).
8. Trade Date.
9. Settlement Date
(Original Issue Date).
10. Stated Maturity Date.
11. Redemption provisions,
if any, including:
Initial Redemption
Date, Initial
Redemption Percentage
and Annual Redemption
Percentage Reduction.
25
12. Optional Repayment
provisions, if any.
13. Net proceeds to the
Company.
14. The Agent's discount
or commission.
15. Whether such Note is
being sold to the
Agent as principal or
to an investor or
other purchaser
through the Agent
acting as agent for
the Company.
16. Whether such Note is
being issued with
Original Issue
Discount and the terms
thereof.
17. Such other information
specified with respect
to such Note (whether
by Addendum or
otherwise).
B. After receiving such
settlement information from
the Agent, the Company will
advise the Trustee of the
above settlement information
by facsimile transmission
confirmed by telephone. The
Company will prepare a
Pricing Supplement to the
Prospectus and deliver
copies to the Agent and the
Trustee and will cause the
Trustee to issue,
authenticate and deliver the
Certificated Note.
C. The Trustee will complete
the Certificated Note in the
form approved by the Company
and the Agent, and will make
three copies thereof (herein
called "Stub 1", "Stub 2"
and "Stub 3"):
1. Certificated Note with
the Agent's
confirmation, if traded
on a principal basis, or
the Agent's customer
confirmation, if traded
on an agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Agent.
4. Stub 3 for the Company.
26
D. With respect to each trade,
the Trustee will deliver the
Certificated Note and Stub 2
thereof to the Agent at the
address set forth in the
notice provisions of the
Distribution Agreement or to
an address otherwise
designated by the Agent to
the Trustee; and the Trustee
will keep Stub 1. The Agent
will acknowledge receipt of
the Certificated Note
through a broker's receipt
and will keep Stub 2.
Delivery of the Certificated
Note will be made only
against such acknowledgment
of receipt. Upon
determination that the
Certificated Note has been
authorized, delivered and
completed as aforementioned,
the Agent will wire the net
proceeds of the Certificated
Note after deduction of its
applicable commission to the
Company pursuant to standard
wire instructions given by
the Company.
E. In the case of a
Certificated Note sold
through the Agent, as agent,
the Agent will deliver such
Certificated Note as well as
a copy of the Prospectus and
any applicable Pricing
Supplement received from the
Company (with the
confirmation) to the
purchaser against payment in
immediately available funds.
F. The Trustee will send Stub 3
to the Company.
Settlement Procedures
Timetable: For offers to purchase Certificated
Notes accepted by the Company,
Settlement Procedures A through F
set forth above shall be completed
as soon as possible following the
trade but not later than the
respective times (New York City
time) set forth below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A 11:00 a.m. on the trade date
B 3:00 p.m. on the trade date
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
Failure to Settle: In the case of Certificated Notes
sold through the Agent, as agent,
if an investor or other purchaser
of a Certificated
27
Note from the Company shall either
fail to accept delivery of or make
payment for such Certificated Note
on the date fixed for settlement,
the Agent will forthwith notify the
Trustee and the Company by
telephone, confirmed in writing,
and return such Certificated Note
to the Trustee.
The Trustee, upon receipt of such
Certificated Note from the Agent,
will immediately advise the Company
and the Company will promptly
arrange to credit the account of
the Agent in an amount of
immediately available funds equal
to the amount previously paid to
the Company by such Agent in
settlement for such Certificated
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 reasonable
loss of the use of funds during the
period when the funds were credited
to the account of the Company.
Immediately upon receipt of the
Certificated Note in respect of
which the failure occurred, the
Trustee will cancel and destroy
such Certificated Note, make
appropriate entries in its records
to reflect the fact that such
Certificated Note was never issued,
and accordingly notify in writing
the Company.