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EXHIBIT 10.22
ADMINISTRATIVE PROCEDURES
FOR FIXED RATE AND FLOATING RATE BANK NOTES
With maturities of 7 days to 15 years
(Dated as of May 12, 2000)
The Short-Term Bank Notes ("Short-Term Notes"), Medium-Term Bank Notes
("Medium-Term Notes," and together with the Short-Term Senior Notes, the
"Notes") are to be offered on a continuous basis for sale by Banco Popular de
Puerto Rico (the "Bank") through each of Popular Securities, Inc., Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co.
Inc. and CS First Boston Corporation who, as agents (each, an "Agent" and
collectively, the "Agents"), will purchase the Notes, as principal from the Bank
for resale to investors and other purchasers at varying prices relating to
prevailing market prices at the time of resale as determined by the applicable
Agent or, if so specified in the applicable Pricing Supplement, for resale at a
fixed public offering price. If agreed to by the Bank and the applicable Agent,
such Agent may utilize its reasonable efforts on an agency basis to solicit
offers to purchase the Notes at 100% of the principal amount thereof. Only those
provisions in these Administrative procedures that are applicable to the
particular role that an Agent will perform shall apply.
The Notes are being sold pursuant to a Distribution Agreement dated
September 24, 1996, as amended as of May 12, 2000 (the "Distribution
Agreement"), between the Bank and the Agents. The Distribution Agreement
provides both for the sale of Notes by the Bank to the Agents as principal for
resale to investors and other purchasers and for the sale of Notes by the Bank
through the Agents as agents and not as principal in which case the Agents will
act as agents of the Bank in soliciting Note purchases. The Notes will be issued
pursuant to an issuing and paying agency agreement dated as of September 24,
1996, as amended as of May 12, 2000 (the "Issuing and Paying Agency Agreement"),
between the Bank and The Chase Manhattan Bank, as issuing and paying agent (the
"Issuing and Paying Agent"). As used herein, the term "Offering Circular" refers
to the most recent offering circular, as such document may be amended or
supplemented, which has been prepared by the Bank for use by the Agents in
connection with the offering of the Notes.
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The Notes will be issued in book-entry form (each beneficial interest
in a global Note, a "Book-Entry Note" and collectively, the "Book-Entry Notes")
and represented by one or more fully registered global Notes (each, a "Global
Note" and collectively, the "Global Notes") delivered to the Issuing and Paying
Agent, as agent for The Depository Trust Company, as depositary ("DTC," which
term includes any successor thereof), and recorded in the book-entry system
maintained by DTC. Book-Entry Notes represented by a Global Note are
exchangeable for definitive Notes in registered form, of like tenor and of an
equal aggregate principal amount, by the owners of such Book-Entry Notes only
upon certain limited circumstances described in the Offering Circular and the
applicable Global Note.
In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Issuing and Paying
Agent will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under the
Short-Term and Medium-Term Letters of Representations from the Bank and the
Issuing and Paying Agent to DTC, dated September 23, 1996, the Short-Term and
Medium-Term Bring-Down Letters of Representations from the Bank and the Issuing
and Paying Agent to DTC, dated May 12, 2000, and a Certificate Agreement, dated
December 2, 1988, as amended September 24, 1996, between the Issuing and Paying
Agent and DTC (the "Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Notes.
Date of Issuance/ Each Note will be dated as of the date of
Authentication: its authentication by the Issuing and Paying
Agent. Each Note shall also bear an original
issue date (the "Original Issue Date") which
shall be the settlement date for such Note.
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 Short-Term Note will mature on a date
(the "Maturity Date") selected by
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the purchaser and agreed to by the Bank
which is not less than seven days and not
more than one year from its Original Issue
Date, as selected by the initial purchaser
and agreed to by the Bank; and each
Medium-Term Note will have a Maturity Date
selected by the purchaser and agreed to by
the Bank which is from more than one year to
not more than 15 years from its Original
Issue Date; provided, however, that Floating
Rate Notes will mature on an Interest
Payment Date.
Registration: Notes will be issued only in fully
registered form.
Calculation of Unless otherwise specified therein and in
Interest: the applicable Pricing Supplement, interest
(including payments for partial periods) on
Fixed Rate Notes having maturities of more
than one year will be computed and paid on
the basis of a 360-day year of twelve 30-day
months. Unless otherwise specified therein
and in the applicable Pricing Supplement,
interest on Fixed Rate Notes having
maturities of one year or less will be
computed on the basis of the actual number
of days of the year divided by 360 and will
be payable only at maturity. Unless
otherwise specified therein and in the
applicable Pricing Supplement, interest on
Floating Rate Notes will be calculated and
paid on the basis of the actual number of
days in the year divided by 360 in the case
of Commercial Paper Rate Notes, LIBOR Notes,
Federal Funds Rate Notes, Prime Rate Notes
and Eleventh District Cost of Funds Rate
Notes, and by the actual number of days in
the year divided by 365 or 366, as the case
may be, in the case of Treasury Rate Notes.
Redemption/Repayment The Notes will be subject to
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redemption by the Bank on and after their
respective Initial Redemption Dates, if any,
Initial Redemption Dates, if any, will be
fixed at the time of sale and set forth in
the applicable Pricing Supplement and in the
applicable Note. If no Initial Redemption
Dates are indicated with respect to a Note,
such Note will not be redeemable prior to
its Maturity Date.
The Notes will be subject to repayment at
the option of the holders thereof in
accordance with the terms of the Notes on
their respective Holder's Optional Repayment
Dates, if any, Holder's Optional Repayment
Dates, if any, will be fixed at the time of
sale and set forth in the applicable Pricing
Supplement and in the applicable Note. If no
Holder's Optional Repayment Dates are
indicated with respect to a Note, such Note
will not be repayable at the option of the
holder prior to its Maturity Date.
Acceptance and When the Agent is soliciting offers to
Rejection of Offers: purchase the Notes, the Bank shall have the
sole right to accept offers to purchase
Notes and may reject any such offer, in
whole or in part. Each Agent shall promptly
communicate to the Bank, orally, each offer
to purchase Notes solicited by such Agent on
an agency basis, other than those offers
rejected by the Agent. Each Agent shall have
the right, without notice to the Bank, to
reject any proposed purchase of Notes
through it, in whole or in part.
Preparation of If any offer to purchase a Note is accepted
Pricing Supplement: by the Bank, the Bank, with the approval
by the Bank, the (the "Presenting Agent"),
will prepare a Pricing
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Supplement reflecting the terms of such
Note.
Procedure for Changing When the Agents are soliciting offers to
Rates or Other purchase the Notes from the Bank and a
Variable Terms: decision has been reached to change the
interest rate or any other variable term on
any Notes being sold by the Bank, the Bank
will promptly advise the Agents and the
Agents will forthwith suspend solicitation
of offers to purchase such Notes. The Agents
will telephone the Bank with recommendations
as to the changed interest rates or other
variable terms. At such time as the Bank
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 Bank of
an offer to purchase at a new interest rate
or new variable term, the Bank and the
Presenting Agent shall follow the procedures
set forth under the applicable "Settlement
Procedures."
Suspension of While the Agents are soliciting offers to
Solicitation; Amendment purchase Notes from the Bank, the Bank may
or Supplement: instruct the Agents to suspend solicitation
of offers to purchase Notes at any time.
Upon receipt of such instructions, the
Agents will forthwith suspend solicitation
of offers to purchase Notes from the Bank
until such time as the Bank has advised them
that solicitation of offers to purchase may
be resumed. If the Bank decides to amend the
Offering Circular (including incorporating
any documents by reference therein) or
supplement any of such documents (other than
to change rates or other variable terms),
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it will immediately notify, with
confirmation in writing to follow, the
Agents and will furnish the Agents and their
counsel with copies of the proposed
amendment (including any document proposed
to be incorporated by reference therein) or
supplement; provided, however, that the Bank
shall be required to provide such notice and
copies only to the extent that it is
required to do so pursuant to the terms of
the Distribution Agreement. One copy of such
proposed amendment or supplement will be
delivered or mailed to the Agents at the
following respective addresses: Popular
Securities, Inc., 209 Munoz Rivera Avenue,
Suite 1020, Hato Rey, Puerto Rico 00918,
(787)766-4200, telecopier: (787)766-3485,
Attention: Ken McGrath; Merrill Lynch & Co.,
World Financial Center, North Tower, 10th
Floor, New York, New York 10281-1310,
(212)449-0393, telecopier: (212)449-2234,
Attention: Product Management-- Medium-Term
Notes; Bear, Stearns & Co. Inc., 245 Park
Avenue, New York, New York 10167,
(212)272-6227, telecopier: (212)272-5371,
Attention: Medium-Term Notes Department; and
CS First Boston Corporation, 55 East 52nd
Street, New York, New York 10038,
(212)909-7198, telecopier: (212)318-1498,
Attention: Short-Medium Term Finance Group.
In the event that at the time the
solicitation of offers to purchase from the
Bank is suspended (other than to change
interest rates, 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 Bank
which have not been settled, the Bank will
promptly advise the Agents whether such
offers may be settled and whether copies of
the Offering Circular, as
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theretofore amended and/or supplemented may
be delivered in connection with the
settlement of such orders. The Bank will
have the sole responsibility for such
decision and for any arrangements which may
be made in the event that the Bank
determines that such orders may not be
settled or that copies of such Offering
Circular may not be so delivered.
Delivery of A copy of the most recent Offering Circular
Offering Circular: 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 The Agents will have no obligations or
Signatures: liability to the Bank or the Issuing and
Paying Agent in respect of the authenticity
of the signature of any officer, employee or
agent of the Bank or the Issuing and Paying
Agent on any Note.
Documents Incorporated The Bank shall supply the Agents with an
by Reference: adequate supply of all documents
incorporated by reference in the Offering
Circular.
Business Day: "Business Day" means for any Bank Note, a
day that meets all the following applicable
requirements: (A) for all Bank Notes, is a
Monday, Tuesday, Wednesday, Thursday or
Friday that is not a bank holiday in Puerto
Rico or a day on which banking institutions
in New York City or in the city in which the
Bank is headquartered generally are
authorized or obligated by law, regulation
or executive order to close; (B) if the Bank
Note is a LIBOR Note (as defined in the
Offering Circular), is also a London
Business Day; and (C) if the
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Bank Note has a specified currency other
than U.S. dollars, is also a day on which
banking institutions are not authorized or
obligated by law, regulation or executive
order to close in the principal financial
center of the country issuing the specified
currency; and "London Business Day" means
any day on which dealings in the relevant
index currency are transacted in the London
interbank market.
Issuance: All Fixed Rate Notes of the Bank issued in
book-entry form having the same Original
Issue Date, Interest Rate, Interest Payment
Dates, Regular Record Dates, Default Rate,
Maturity Date, redemption and/or repayment
terms, if any, original issue discount
terms, if any, and otherwise having
identical terms and provisions
(collectively, the "Fixed Rate Terms") will
be represented initially by a single Global
Note in fully registered form; and all
Floating Rate Notes of the Bank issued in
book-entry form having the same Original
Issue Date, interest rate basis upon which
interest may be determined (each, an
"Interest Rate Basis"), which may be the
Commercial Paper Rate, LIBOR, the Treasury
Rate, the Federal Funds Rate, the Prime
Rate, the Eleventh District Cost of Funds
Rate and any other rate set forth by the
Bank in a Floating Rate Note, Initial
Interest Rate, Index Maturity, Spread and/or
Spread Multiplier, if any, Regular Record
Dates, Maximum Interest Rate, if any,
Minimum Interest Rate, if any, Interest
Payment Dates, Interest Payment Period,
Interest Reset Dates, Interest Reset Period,
Alternate Rate Event Spread, LIBOR Screen,
if any, Calculation Agent, Default Rate,
Maturity Date, redemption or repayment
terms, if any, original issue discount
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terms, if any, and otherwise having
identical terms and provisions
(collectively, the "Floating Rate Terms"),
will be represented initially by a single
Global Note.
Identification: The Bank has arranged with the CUSIP Service
Bureau of Standard & Poor's Ratings Group
(the "CUSIP Service Bureau") for the
reservation of one series of CUSIP numbers
assignable to Notes with maturities more
than one year and one series of CUSIP
numbers assignable to Notes with maturities
of 7 days or more up to and including one
year, each of which series consists of
approximately 900 CUSIP numbers which have
been reserved for and relating to Global
Notes, and the Bank has delivered to DTC
such list of such CUSIP numbers. The Issuing
and Paying Agent will assign CUSIP numbers
to Global Notes as described below under
Settlement Procedure C. DTC will notify the
CUSIP Service Bureau periodically of the
CUSIP numbers that the Issuing and Paying
Agent has assigned to the Global Notes. The
Issuing and Paying Agent will notify the
Bank at any time when fewer than 100 of the
reserved CUSIP numbers of any series remain
unassigned to Global Notes and, if it deems
it necessary, the Bank will reserve
additional CUSIP numbers of such series for
assignment to Global Notes. Upon obtaining
such additional CUSIP numbers, the Bank will
deliver a list of such additional numbers to
the Issuing and Paying Agent and DTC.
Book-Entry Notes having an aggregate
principal amount in excess of $200,000,000
and otherwise required to be represented by
the same Global Note will instead be
represented by two or more Global Notes
which shall all be assigned the same CUSIP
number.
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 Issuing and
Paying Agent. The owner of a Book-Entry Note
(i.e., an owner of a beneficial interest in
a Global Note) (or one or more indirect
participant&in DTC designated by such owner)
will designate one or more participants in
DTC (with respect to such Book-Entry Note,
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 Book-Entry Notes in the
account of such Participants. The ownership
interest of such beneficial owner in such
Global Note will be recorded through the
records of such Participants or through the
separate records of such Participants and
one or more indirect participants in DTC.
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Transfers: Transfers of a beneficial interest 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 Issuing and Paying Agent 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
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on such date that represent 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 Book-Entry
Notes, on which such Global Notes shall be
exchanged for one or more replacement Global
Notes; and (c) a new CUSIP number, obtained
from the Issuing and Paying Agent, to be
assigned to such replacement Global Note.
Upon receipt of such notice, DTC will send
to its Participants a written reorganization
notice to the effect that such exchange will
occur on such date. Prior to the specified
exchange date, the Issuing and Paying Agent
will deliver to the CUSIP Service Bureau
written notice setting forth such exchange
date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP
numbers of the Global Notes to be exchanged
will no longer be valid. On the specified
exchange date, the Issuing and Paying Agent
will exchange such Global Notes for a single
Global Note bearing the new CUSIP number,
and the CUSIP numbers of the exchanged
Global Notes will, in accordance with CUSIP
Service Bureau procedures, be cancelled and
not immediately reassigned. Notwithstanding
the foregoing, if the Global Notes to be
exchanged exceed $200,000,000 in aggregate
principal amount, one replacement Global
Note will be authenticated and issued to
represent each $200,000,000 of principal
amount of the exchanged Global Notes and an
additional Global Note or Global Notes will
be authenticated and issued in
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exchange for any remaining principal amount
of such exchanged Global Notes representing
such Book-Entry Notes (see "Denominations"
below).
Denominations: All Book-Entry Notes will be denominated in
U.S. dollars. Book-Entry Notes will be
issued in minimum denominations of $100,000
and integral multiples of $1,000 in excess
thereof. Global Notes representing
Book-Entry Notes will be denominated in
principal amounts not in excess of
$200,000,000. If one or more Book-Entry
Notes having an aggregate principal amount
in excess of $200,000,000 would, but for the
preceding sentence, be represented by a
single Global Note, then one Global Note
will be issued to represent each
$200,000,000 principal amount of such
Book-Entry Note or Notes and an additional
Global Note or Global Notes will be issued
to represent any remaining principal amount
of such Book-Entry Notes. In such case, each
of the Global Notes representing such
Book-Entry Notes shall be assigned the same
CUSIP number. Each owner of a beneficial
interest in one or more Book-Entry Notes is
required to hold that beneficial interest in
denominations of $100,000 principal amount
or any integral multiple of $1,000 in excess
thereof of each such Book-Entry Note at all
times.
Interest: General. Interest on each Book-Entry Note
will accrue from the Original Issue Date or
the most recent Interest Payment Date for
which interest has been paid. Each payment
of interest on a Book-Entry Note shall
include interest accrued through the day
preceding, as the case may be, the Interest
Payment Date, Maturity Date or date of
earlier redemption or
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repayment. Interest payable on the Maturity
Date or date of earlier redemption or
repayment of a Book-Entry Note will be
payable to the holder to whom the principal
of such Book-Entry Note is payable. DTC will
arrange for each pending deposit message
described under Settlement Procedure D below
to be transmitted to Standard & Poor's
Ratings Group, 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 Standard & Poor's Ratings
Group.
Regular Record Dates. Unless otherwise
specified in the applicable Pricing
Supplement, the Regular Record Date with
respect to any Interest Payment Date for a
Fixed Rate Book-Entry Note with a maturity
of more than one year shall be the June 1 or
December 1 next preceding the applicable
Interest Payment Date. The Regular Record
Date with respect to any Interest Payment
Date for a Floating Rate Book-Entry Note
shall be the date 15 calendar days (whether
or not a Business Day) prior to such
Interest Payment Date. Unless otherwise
specified in the applicable Pricing
Supplement, interest on a Fixed Rate
Book-Entry Note with a maturity of one year
or less will be payable only at maturity to
the person to whom principal shall be
payable.
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, that the first payment of
interest on any Note originally issued
between a Regular Record Date and an
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Interest Payment Date will be made on the
second Interest Payment Date following the
Original Issue Date. If any Interest Payment
Date of a Fixed Rate Book-Entry Note falls
on a day which is not a Business Day, the
related payment of interest on such Fixed
Rate Book-Entry Note shall be made on the
next succeeding Business Day with the same
force and effect as if made on the date such
payment was due, and no interest shall
accrue on the amount so payable for the
period from and after such Interest Payment
Date. If any Interest Payment Date with
respect to any Floating Rate Book-Entry Note
would otherwise be a day that is not a
Business Day, such Interest Payment Date
will be the next succeeding Business Day,
except that in the case of a LIBOR
Book-Entry Note, if such Business Day is in
the next succeeding calendar month, such
Interest Payment Date will be the
immediately preceding Business Day.
Fixed Rate Book-Entry Notes. Unless
otherwise specified in the applicable
Pricing Supplement, interest payments on
Fixed Rate Book-Entry Notes having
maturities of more than one year will be
payable semi-annually on June 15 and
December 15 of each year and on the Maturity
Date. Unless otherwise specified in the
applicable Pricing Supplement, interest on
Fixed Rate Book-Entry Notes having
maturities of one year or less will be
payable only at maturity.
Floating Rate Notes. Unless otherwise
specified in the applicable Pricing
Supplement, interest payments on Floating
Rate Book-Entry Notes will be made as
specified in the Floating Rate Book-Entry
Note.
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Notice of Interest Payments and Regular
Record Dates. On the first Business Day
after any Regular Record Date, the Issuing
and Paying Agent will deliver to DTC a
written list of Regular 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 Book-Entry Notes. Promptly
after each Interest Determination Date for
Floating Rate Book-Entry Notes, the Issuing
and Paying Agent will notify Standard &
Poor's Ratings Group of the interest rates
determined on such Interest Determination
Date.
Payments of Principal Payments of Interest Only. Promptly after
and Interest: each Regular Record Date, the Issuing and
Paying Agent will deliver to the Bank and
DTC a written notice specifying by CUSIP
number the amount of interest to be paid on
each Book-Entry Note on the 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 Book-Entry Note on such Interest
Payment Date by reference to the daily bond
reports published by Standard & Poor's
Ratings Group. On such Interest Payment
Date, the Bank will pay to the Issuing and
Paying Agent, and the Issuing and Paying
Agent in turn will pay to DTC, an amount
sufficient to pay the total amount of
interest then due and owing (other than on
the Maturity Date), at the times and in the
manner set forth below under "Manner of
Payment."
Payments on the Maturity Date. On or about
the first Business Day of each month, the
Issuing and Paying Agent will deliver to DTC
a written list of
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principal of, premium, if any, and interest
on, each Book-Entry Note maturing on any
Maturity Date, date of earlier redemption or
Holder's Optional Repayment Date in the
following month. The Issuing and Paying
Agent and DTC will confirm the amounts of
such principal of, premium, if any, and
interest on, a Book-Entry Note on or about
the fifth Business Day preceding the
Maturity Date of such Book-Entry Note. On
such Maturity Date, the Bank will pay to the
Issuing and Paying Agent, and the Issuing
and Paying Agent in turn will pay to DTC,
the principal amount of such Book-Entry
Note, together with interest and premium, if
any, due on such Maturity Date, at the times
and in the manner set forth below under
"Manner of Payment." If any Maturity Date or
date of earlier redemption or repayment of a
Fixed Rate Book-Entry Note falls on a day
which is not a Business Day, the related
payment of principal of, premium, if any, or
interest on, such Fixed Rate Book-Entry Note
shall be made on the next succeeding
Business Day with the same force and effect
as if made on the date such payment were
due, and no interest shall accrue on the
amount so payable for the period from and
after such Maturity Date or date of earlier
redemption or repayment, as the case may be.
Floating Rate Book-Entry Notes will mature
on an Interest Payment Date. If any Interest
Payment Date or date of earlier redemption
or repayment with respect to any Floating
Rate Book-Entry Note would otherwise be a
day that is not a Business Day, such
Interest Payment Date or date of earlier
redemption or repayment will be the next
succeeding Business Day, except that in the
case of a LIBOR Note, if such Business Day
is in the
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next succeeding calendar month, such
Interest Payment Date or date of earlier
redemption or repayment will be the
immediately preceding Business Day. Promptly
after payment to DTC of the principal of,
premium, if any, and interest due on, the
Maturity Date or Interest Payment Date of
all Book-Entry Notes represented by a Global
Note, the Issuing and Paying Agent will
cancel such Global Note and deliver such
Global Note to the Bank with an appropriate
debit advice. On the first Business Day of
each month, the Issuing and Paying Agent
will deliver to the Bank 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 of, premium, if any, and interest
on, Book-Entry Notes due on any Interest
Payment Date or Maturity Date shall be paid
by the Bank to the Issuing and Paying Agent
in immediately available funds available for
use by the Issuing and Paying Agent no later
than 10:00 A.M., New York City time, on such
date. The Bank will make such payment on
such Book-Entry Notes by instructing the
Issuing and Paying Agent to withdraw funds
from an account maintained by the Bank at
the Issuing and Paying Agent. The Bank will
confirm such instructions in writing to the
Issuing and Paying Agent. Upon receipt of
such funds, the Issuing and Paying Agent
will pay by separate wire transfer (using
message entry instructions in a form
previously specified by DTC) to an account
previously specified by DTC, in funds
available for immediate use by DTC,
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each payment of principal of, premium, if
any, and interest 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
Book-Entry Notes are recorded in the
book-entry system maintained by DTC. Neither
the Bank nor the Issuing and Paying Agent
will have any responsibility or liability
for the payment by DTC of the principal of,
premium, if any, 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 Book-Entry
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 Book-Entry Note.
Settlement Procedures: Settlement procedures with regard to
Book-Entry Notes purchased by each Agent as
principal or sold by each Agent, as agent of
the Bank, will be as follows:
A. The Presenting Agent will advise the
Bank by telephone, confirmed by
facsimile, of the following settlement
information:
1. Taxpayer identification number of
the purchaser.
2. Principal amount of such Book-Entry
Notes.
3. (a) Fixed Rate Book-Entry Notes:
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(i) Interest Rate;
(ii) Interest Payment Dates for
Fixed Rate Book-Entry
Notes; and
(iii) Regular Record Dates for
Fixed Rate Book-Entry
Notes with maturities
of more than one year (if
other than the June 1 or
December 1 prior to each
Interest Payment Date).
(b) Floating Rate Book-Entry
Notes:
(i) Initial Interest Rate;
(ii) Interest Rate Basis;
(iii) Index Maturity;
(iv) Spread and/or Spread
Multiplier, if any;
(v) Regular Record Dates (if
other than the 15th day
prior to each Interest
Payment Date);
(vi) Maximum Interest Rate, if
any;
(vii) Minimum Interest Rate, if
any;
(viii) Interest Payment Dates;
(ix) Interest Payment Period;
(x) Interest Reset Dates;
(xi) Calculation Agent;
(xii) Interest Reset Period;
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(xiii) Alternate Rate Event
Spread;
(xiv) LIBOR Screen, if any;
4. Price to public, if any, of such
Book-Entry Notes (if such
Book-Entry Notes are not being
offered "at the market").
5. Trade Date.
6. Settlement Date (Original Issue
Date).
7. Maturity Date.
8. Redemption provisions, if any,
including: Initial Redemption Date,
Initial Redemption Percentage and
Annual Redemption Percentage
Reduction.
Repayment provisions, if any,
including: Holder's Optional
Repayment Date(s).
9. Net proceeds to the Bank.
10. Whether such Book-Entry Notes are
being sold to the Presenting Agent
as principal or to an investor or
other purchaser through the
Presenting Agent acting as agent
for the Bank.
11. The presenting Agent's commission
or discount, as applicable.
12. Whether such Book-Entry Notes are
being issued with Original Issue
Discount and the terms thereof.
13. Default Rate.
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14. Such other information specified
with respect to such Book-Entry
Notes.
B. If any offer to purchase a Note is
accepted by the Bank, the Bank, with the
approval of the Presenting Agent, will
prepare a Pricing Supplement reflecting
the information set forth in Settlement
Procedure A above, and will transmit the
Pricing Supplement to the Presenting
Agent by electronic or facsimile
transmission.
C. The Bank will advise the Issuing and
Paying Agent by electronic means,
telephone (confirmed in writing at any
time on the same date), facsimile
transmission or by other acceptable
means of the information set forth in
Settlement Procedure A above, and the
name of the Presenting Agent. The
Issuing and Paying Agent, on behalf of
the Bank, will assign a CUSIP number of
the appropriate series to the Global
Note representing such Book-Entry Notes
and will notify the Bank by facsimile
transmission or other electronic
transmission of such CUSIP number as
soon as practicable, and as soon
thereafter as practicable, the Bank will
notify the Presenting Agent by telephone
of such CUSIP number. Each such
instruction given by the Bank to the
Issuing and Paying Agent will constitute
a representation and warranty by the
Bank to the Issuing and Paying Agent and
the Agents that (i) the issuance and
delivery of such Global Note has been
duly and validly authorized by the Bank
and
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(ii) that such Global Note, when
completed, authenticated and delivered
pursuant to the Issuing and Paying
Agency Agreement, will constitute the
valid and legally binding obligation of
the Bank. D. The Issuing and Paying
Agent will communicate to DTC 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. The identification numbers of the
participant accounts maintained by
DTC on behalf of the Issuing and
Paying Agent and the Presenting
Agent.
3. Identification as a Fixed Rate
Book-Entry Note or Floating Rate
Book-Entry Note.
4. The initial Interest Payment Date
for each Global Note representing
such Book-Entry Notes, the number of
days by which such date succeeds the
related Regular Record Date for DTC
purposes and, if then calculable,
the amount of interest payable on
such Interest Payment Date (which
amount shall have been confirmed by
the Issuing and Paying Agent).
5. The CUSIP number of each Global Note
representing such Book-Entry Notes.
6. Whether such Global Note represents
any other Notes is-
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sued or to be issued in book-entry
form.
E. The Issuing and Paying Agent will
complete, authenticate and deliver to
DTC by retention as custodian for DTC
the Global Note representing such
Book-Entry Notes in a form that has been
approved by the Bank, the Issuing and
Paying Agent and the Agents.
F. DTC will credit the Book-Entry Notes
represented by such Global Note to the
participant account of the Issuing and
Paying Agent maintained by DTC except as
provided in Settlement Procedure H
below.
G. The Issuing and Paying Agent will enter
an SDFS deliver order through DTC's
Participant Terminal System instructing
DTC (i) to debit such Book-Entry Notes
to the Issuing and Paying Agent's
participant account and credit such
Book-Entry Notes 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 the Issuing and Paying Agent
maintained by DTC, in an amount equal to
the price of such Book-Entry Notes less
such Agent's commission. Any entry of
such deliver order shall be deemed to
constitute a representation and warranty
by the Issuing and Paying Agent to DTC
that (i) the Global Note representing
such Book-Entry Notes has been issued
and authenticated and (ii) the Issuing
and Paying Agent is holding such Global
Note pursuant to the Certificate
Agreement.
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H. In the case of Book-Entry Notes sold
through an Agent acting as agent, the
Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Book-Entry Notes to the
Presenting Agent's participant account
and credit such Book-Entry Notes 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 Book-Entry Notes.
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 Issuing and Paying Agent will credit
to an account of the Bank maintained at
the Issuing and Paying Agent funds
available for immediate use in the
amount transferred to the Issuing and
Paying Agent in accordance with
Settlement Procedure G.
K. In the case of Book-Entry Notes sold
through an Agent acting as agent, the
Presenting Agent will confirm the
purchase of such Book-Entry Notes to the
purchaser either by transmitting to the
Participant with respect to such
Book-Entry Notes a confirmation order
through DTC's Participant Terminal
System or by mailing a
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written confirmation to such
purchaser.
Settlement Procedures For offers to purchase Book-Entry Notes
Timetable: accepted by the Bank, Settlement Procedures
A through K set forth above shall be
completed as soon as possible. However, all
information on sales settling one day or
more after the Trade Date will be
transmitted to DTC no later than 10:00 a.m.
on the Settlement Date.
If a sale is to be settled on the same
Business Day as the Trade Date, Settlement
Procedure A shall be completed no later than
11:00 a.m. on such Business Day, Settlement
Procedure C shall be completed no later than
12:00 p.m. on such Business Day, and
Settlement Procedure D shall be completed no
later than 1:00 p.m. on such Business Day.
If a sale is to be settled more than one
Business Day after the Trade Date,
Settlement Procedures A and B must be
completed no later than 4:00 p.m. on the
Trade Date and Settlement Procedures C and D
may, if necessary, be completed at any time
on the first Business Day after such Trade
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 Book-Entry Note is
rescheduled or cancelled, the Issuing and
Paying Agent 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
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Settlement Date.
Failure to Settle: If the Issuing and Paying Agent fails to
enter an SDFS deliver order with respect to
a Book-Entry Note pursuant to Settlement
Procedure G, then the Issuing and Paying
Agent may deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable a withdrawal message instructing
DTC to debit such Book-Entry Note to the
participant account of the Issuing and
Paying Agent maintained at DTC. DTC will
process the withdrawal message, provided
that such participant account contains a
principal amount of the Global Note
representing such Book-Entry Note that is at
least equal to the principal amount to be
debited. If withdrawal messages are
processed with respect to all Book-Entry
Notes represented by a Global Note, the
Issuing and Paying Agent will mark such
Global Note "cancelled," make appropriate
entries in its records and return such
Global Note to the Bank. The CUSIP number
assigned to such Global Note shall, in
accordance with CUSIP Service Bureau
procedures, be cancelled and not immediately
reassigned. If withdrawal messages are
processed with respect to some of the
Book-Entry Notes represented by a Global
Note, the Issuing and Paying Agent will
exchange such Global Note for two Global
Notes, one of which shall represent the
Book-Entry Notes for which such withdrawal
messages are processed and shall be
cancelled immediately after issuance, and
the other of which shall represent the other
Book-Entry Notes previously represented by
the surrendered Global Note and shall bear
the CUSIP number of the surrendered Global
Note.
In the case of any Book-Entry Note
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sold through an Agent, acting as agent, if
the purchase price for any Book-Entry Note
is not timely paid to the Participants with
respect to such Book-Entry 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 applicable
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 Issuing and Paying Agent
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 Bank 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 Bank.
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
Book-Entry Note that was to have been
represented by a Global Note also
representing other Book-Entry Notes, the
Issuing and Paying Agent will provide, in
accordance with Settlement Procedure E, for
the authentication and issuance of a Global
Note representing such remaining Book-Entry
Notes and will make appropriate entries in
its records.
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