EXHIBIT 10(b)
POPULAR NORTH AMERICA, INC.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(Dated as of March 21, 2003)
Medium-Term Notes, Series E (collectively, the "Notes") in the
aggregate principal amount of up to an additional $2,000,000,000 so as to be
limited to $3,500,000,000 (of which $1,452,000,000 aggregate initial offering
price of Notes has been issued prior to the date hereof), less the aggregate
initial public offering price of the Securities (as defined in the Prospectus,
dated November 19, 2001, relating to debt securities and preferred stock of the
Company, Popular, Inc. (the "Guarantor") and Popular International Bank, Inc.)
authenticated and delivered upon original issuance other than the Notes prior to
or after the date hereof, are to be offered on a continuous basis by Popular
North America, Inc. (the "Company"), through Credit Suisse First Boston LLC
("Credit Suisse First Boston"), J.P. Morgan Securities Inc. ("JPMorgan"), Keefe,
Bruyette & Woods, Inc. ("KBW"), Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), Popular Securities, Inc.
("Popular Securities") and UBS Warburg LLC ("UBS"), who, as agents (each an
"Agent"), have agreed to use their reasonable efforts to solicit offers to
purchase the Notes from the Company. The Agents also may purchase Notes as
principals for resale.
The Notes are being sold pursuant to a Distribution Agreement among the
Company, the Agents and the Guarantor, dated March 21, 2003 (the "Distribution
Agreement"). The Notes will be issued pursuant to the Indenture, dated as of
October 1, 1991, as supplemented by the First Supplemental Indenture, dated as
of February 28, 1995, the Second Supplemental Indenture, dated as of May 8,
1997, and the Third Supplemental Indenture, dated as of August 5, 1999
(together, the "Indenture"), each between the Company and Bank One, NA,
successor as Trustee (the "Trustee") to The First National Bank of Chicago,
which was successor as Trustee to Citibank, N.A. (the "Original Trustee"). A
Registration Statement (the "Registration Statement," which term shall include
any additional registration statements filed in connection with the Notes as
provided in the Distribution Agreement) with respect to the Notes has been filed
with the Securities and Exchange Commission (the "Commission"). The Prospectus
dated November 19, 2001, as supplemented with respect to the Notes, is herein
referred to as the "Prospectus." The most recent supplement to the Prospectus
with respect to the specific terms of the Notes is herein referred to as the
"Pricing Supplement."
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC, or (b) in certificated form (each, a
"Certificated Note") delivered to the purchaser thereof or a person designated
by such purchaser. Owners of beneficial interests in Book-Entry 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.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes 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 or its duly appointed authenticating agent. Each Note shall
also bear an original issue date (the "Original Issue Date"). The
Original Issue Date shall remain the same for all Notes subsequently
issued upon transfer, exchange or substitution of an original Note
regardless of their dates of authentication.
Maturities:
Each Note will mature on a date selected by the purchaser and agreed to
by the Company which is not less than nine months from its Original
Issue Date; provided, however, that Notes bearing interest at rates
determined by reference to selected indices ("Floating Rate Notes")
will mature on an Interest Payment Date.
Currencies:
Each Note shall be denominated in one of the currencies or currency
units, as specified in the relevant Pricing Supplement, or in such
other currency or currency unit as may be agreed from time to time
between the Company and the applicable Agent(s) and as specified in the
relevant Pricing Supplement, or, if no currency or currency unit is
specified therein, in U.S. dollars. Notes denominated in one or more
currencies or currency units other than in U.S. dollars are herein
referred to as "Multi-Currency Notes." Notes that have the amount of
principal payments determined by reference to an index are herein
referred to as "Indexed Notes."
Denominations:
The Notes will be issued in denominations of a minimum of $1,000 and
integral multiples of $1,000. Any Notes denominated other than in U.S.
dollars will be issuable in denominations as set forth in the relevant
Multi-Currency Note Prospectus Supplement. For
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special provisions relating to Multi-Currency Notes or Indexed Notes,
see the related Multi-Currency or Indexed Prospectus Note Supplement.
Registration:
Notes will be issued only in fully registered form.
Redemption/Repayment:
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
Repayment Dates, if any. 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 Repayment Dates are indicated with respect
to a Note, such Note will not be repayable at the option of the Holder
prior to Maturity.
The Notes will be subject to redemption by the Company on and after
their respective Redemption Commencement Dates, if any. Redemption
Commencement 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 Redemption Commencement Dates are indicated with respect to a
Note, such Note will not be redeemable prior to Maturity, except as set
forth in the Prospectus in the event that the Guarantor is obligated to
pay Additional Amounts in respect of the Notes.
Calculation of Interest:
In the case of Fixed Rate Notes, interest (including payments for
partial periods) will be calculated and paid on the basis of a 360-day
year of twelve 30-day months. In the case of Floating Rate Notes,
interest will be calculated and paid on the basis of the actual number
of days in the interest period divided by 360, with the exception of
Treasury Rate Notes and CMT Rate Notes, for which interest will be
calculated on the basis of the actual number of days in the interest
period divided by the actual number of days in the year. If an Interest
Payment Date with respect to any Fixed Rate Note falls on a day that is
not a Business Day (as hereinafter defined), the payment of interest
required to be made on such Interest Payment Date need not be made on
such day, but may be made on the next succeeding Business Day with the
same force and
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effect as if made on such Interest Payment Date and no interest shall
accrue on such payment for the period from and after such Interest
Payment Date. If an Interest Payment 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 the following day that is a Business
Day, except that in the case of a LIBOR Note, if such day falls in the
next calendar month, such Interest Payment Date will be the preceding
day that is a Business Day. If the Stated Maturity, or date of earlier
redemption or repayment, as the case may be, of a Note is not a
Business Day, the payment of principal and interest due on such day
shall be made on the next succeeding Business Day and no interest shall
accrue on such payment for the period from and after such Stated
Maturity, or date of earlier redemption or repayment. For special
provisions relating to Multi-Currency Notes or Indexed Notes, see the
related Multi-Currency or Indexed Note Prospectus Supplement.
Acceptance and Rejection of Offers:
The Company shall have the sole right to accept offers to purchase
Notes from the Company and may reject any such offer in whole or in
part. Each Agent shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Notes from the Company
received by it. Each Agent shall have the right, in its discretion
reasonably exercised, without notice to the Company, to reject any
offer to purchase Notes through it in whole or in part.
Preparation of Pricing Supplement:
If any offer to purchase a Note is accepted by the Company, the
Company, with the approval of the Agent which presented the order, will
prepare a Pricing Supplement reflecting the terms of such Note and file
the Pricing Supplement relating to the Notes with the Commission in
accordance with Rule 424 under the Securities Act of 1933, as amended.
Information to be included in the Pricing Supplement shall include:
1. the name of the Company;
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2. the title of the securities, including series
designation, if any;
3. the date of the Pricing Supplement and the date of
the Prospectus Supplement to which the Pricing Supplement relates;
4. the price to public (but only if (a) the trade is
being made on an agency basis and (b) such price to public is other
than 100%);
5. net proceeds to the Company (but only if (a) the
trade is being made on a principal basis and (b) the net proceeds to
the Company is other than 100%), less what would have been the
applicable agency commission;
6. the information with respect to the terms of the
Notes set forth below (whether or not the applicable Note is a
Book-Entry Note) under "Procedures for Notes Issued in Book-Entry Form
-- Settlement Procedures", items A.2, A.3, A.4, A.5, A.6, A.7, A.8 and
A.9; and
7. any other terms of the Notes not otherwise specified
in the Prospectus or Prospectus Supplement, including, without
limitation, any other terms required by the Prospectus or Prospectus
Supplement.
One copy of such filed document will be sent by telecopy or
overnight express (for delivery not later than 11:00 A.M. on the
Business Day next following the trade date) to the applicable Agent
at the following addresses:
To Credit Suisse First Boston:
Credit Suisse First Boston LLC
1 Madison Avenue
New York, New York 10010
Attention: Joan Bryan, Transaction Advisory Group
Telephone: (212) 538-7764
Telecopy: (212) 538-6259
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To JPMorgan:
J.P. Morgan Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017
Attention: Medium-Term Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To KBW:
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
Telephone: (212) 887-8936
Telecopy: (212) 582-5419
To Merrill Lynch:
If by overnight, express or special delivery:
Merrill Lynch & Co.
Tritech Services
40 Colonial Drive
Piscataway, New Jersey 08854
Attention: Prospectus Operations/Susan Putnam
If by all other types of deliveries:
Tritech Services
#4 Corporate Place, Corporate Park 287
Piscataway, New Jersey 08854
Attention: Prospectus Operations/
Nachman Kimerling
Telephone: (908) 885-2769
Telecopy: (908) 885-2774/2775/2776
To Popular Securities:
Popular Securities Inc.
209 Munoz Rivera Avenue
Suite 1020
Hato Rey, Puerto Rico 00918
Attention: Ken McGrath
Telephone: (787) 766-4200
Telecopy: (787) 766-3485
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To UBS:
UBS Warburg LLC
677 Washington Blvd
Stamford, Connecticut 06901
Attention: Fixed Income Syndicate
Telephone: (203) 719-1088
Telecopy: (203) 719-0495
The applicable Agent will cause a stickered supplemented Prospectus
with the trade confirmation to be delivered to the purchaser of the
Note.
For record keeping purposes, one copy of each Pricing Supplement shall
also be mailed or telecopied to each Agent and the Trustee at the
following respective addresses:
To Credit Suisse First Boston:
Credit Suisse First Boston LLC
11 Madison Avenue
New York, New York 10010
Attention: Short and Medium-Term Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To JPMorgan:
J.P. Morgan Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017
Attention: Medium-Term Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To KBW:
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
Telephone: (212) 887-8936
Telecopy: (212) 582-5419
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To Merrill Lynch:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center, North Tower, 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To Popular Securities:
Popular Securities Inc.
209 Munoz Rivera Avenue
Suite 1020
Hato Rey, Puerto Rico 00918
Attention: Ken McGrath
Telephone: (787) 766-4200
Telecopy: (787) 766-3485
To UBS:
UBS Warburg LLC
677 Washington Blvd
Stamford, Connecticut 06901
Attention: Fixed Income Syndicate
Telephone: (203) 719-1088
Telecopy: (203) 719-0495
To the Trustee:
Bank One, NA
153 West 51st Street
5th Floor
New York, New York 10019
Attention: Corporate Trust Services
Telephone: (212) 373-1339
Telecopy: (212) 373-1383
In each instance that a Pricing Supplement is prepared, the applicable
Agent will affix the Pricing Supplement to supplemented Prospectuses
prior to its use. Outdated Pricing Supplements and the Prospectuses to
which they are attached (other than those retained for files) will be
destroyed.
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Settlement:
The receipt of immediately available funds by the Company in payment
for a Note and the authentication and delivery of such Note shall, with
respect to such Note, constitute "settlement." Offers accepted by the
Company will be settled at a time as the purchaser and the Company
shall agree and pursuant to the timetable for settlement set forth in
Parts II and III hereof under "Settlement Procedures" with respect to
Book-Entry Notes and Certificated Notes, respectively (each such date
fixed for settlement, 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.
In the event of a purchase of Notes by an Agent as principal,
appropriate settlement details will be set forth in the applicable
Terms Agreement to be entered into between the applicable Agent and the
Company pursuant to the Distribution Agreement.
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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 offered by the Company, the
Company will promptly advise the Agents and the Agents will forthwith
suspend solicitation of offers to purchase such Notes. Each Agent will
telephone the Company with recommendations as to the changed interest
rates or other variable terms. At such time as the Company advises the
Agents of the new interest rates or other variable terms, the Agents
may resume solicitation of offers to purchase such Notes. Until such
time, only "indications of interest" may be recorded. Immediately after
acceptance by the Company of an offer to purchase at a new interest
rate or new variable term, the Company, the Agents and the Trustee
shall follow the procedures set forth under the applicable "Settlement
Procedures."
Suspension of Solicitation; Amendment or Supplement:
The Company may instruct the Agents to suspend solicitation of
purchases at any time. Upon receipt of such instructions, the Agents
will forthwith suspend solicitation of offers to purchase from the
Company until such time as the Company has advised them that
solicitation of offers to purchase may be resumed. If the Company
decides to amend the Registration Statement (including incorporating
any documents by reference therein) or supplement any of such documents
(other than to change rates or other variable terms), it will promptly
advise the Agents and, except in the case of an amendment by the filing
of a document incorporated by reference in the Registration Statement,
will furnish each Agent and its counsel with copies of the proposed
amendment or supplement. One copy of such filed document, along with a
copy of the cover letter sent to the Commission, will be delivered or
mailed to the Agents at the following addresses:
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To Credit Suisse First Boston:
Credit Suisse First Boston LLC
11 Madison Avenue
New York, New York 10010
Attention: Short and Medium-Term Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To JPMorgan:
J.P. Morgan Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017
Attention: Medium-Term Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To KBW:
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
Telephone: (212) 887-8936
Telecopy: (212) 582-5419
To Merrill Lynch:
Product Management MTNs
Merrill Lynch Money Markets
North Tower, World Financial Center, 10th Floor
New York, New York 10281-1310
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To Popular Securities:
Popular Securities, Inc.
209 Munoz Rivera Avenue
Suite 1020
Hato Rey, Puerto Rico 00918
Attention: Ken McGrath
Telephone: (787) 766-4200
Telecopy: (787) 766-3485
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To UBS:
UBS Warburg LLC
677 Washington Blvd
Stamford, Connecticut 06901
Attention: Fixed Income Syndicate
Telephone: (203) 719-1088
Telecopy: (203) 719-0495
In the event that at the time the solicitation of offers to purchase
from the Company is suspended (other than to change interest rates or
other variable terms) there shall be any offers to purchase Notes that
have been accepted by the Company which have not been settled, the
Company will promptly advise the Agents 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
orders. The Company will have the sole responsibility for such decision
and for any arrangements which may be made in the event that the
Company determines that such orders may not be settled or that copies
of such Prospectus may not be so delivered.
Delivery of Prospectus:
A copy of the most recent Prospectus and Pricing Supplement must
accompany or precede the earlier of (a) the written confirmation of a
sale sent to a customer or his agent and (b) the delivery of Notes to a
customer or his agent.
Authenticity of Signatures:
The Agents will have no 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 or related
Guarantee.
Documents Incorporated by Reference:
The Company shall supply each Agent with an adequate supply of all
documents incorporated by reference in the Registration Statement.
Business Day:
"Business Day" has the meaning set forth in the Prospectus Supplement.
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PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Book-Entry Notes 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 obligations under a Letter of Representations from the
Company and The First National Bank of Chicago to DTC, dated August 6, 1999, as
supplemented by a Bring-Down Letter of Representations from the Company and the
Trustee to DTC, dated March 21, 2003, and a Medium-Term Note Certificate
Agreement between The First National Bank of Chicago and DTC, dated May 26, 1989
(the "Certificate Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance:
All Fixed Rate Book-Entry Notes having the same Original Issue Date,
interest rate, terms of redemption or repayment, if any, and Stated
Maturity (collectively, the "Fixed Rate Terms") will be represented
initially by a single global security in fully registered form without
coupons; and all Floating Rate Book-Entry Notes having the same
Original Issue Date, interest rate basis or bases upon which interest
may be determined (each, an "Interest Rate Basis"), which may be one or
more of the Commercial Paper Rate, the Treasury Rate, LIBOR, the CD
Rate, the CMT Rate, the Federal Funds Rate, the Prime Rate, the 11th
District Rate, and any other rate set forth by the Company, Initial
Interest Rate, Index Maturity, Spread and/or Spread Multiplier, if any,
Minimum Interest Rate, if any, Maximum Interest Rate, if any, terms of
redemption or repayment, if any, and Stated Maturity (collectively,
"Floating Rate Terms") will be represented initially by a single
Book-Entry Note.
Each Book-Entry Note will be dated and issued as of the date of its
authentication by the Trustee or its duly appointed authenticating
agent. Each Book-Entry Note will bear interest from a date (the
"Interest Accrual Date") which will be (a) with respect to an original
Book-Entry Note (or any portion thereof), its Original Issue Date and
(b) with respect to any Book-Entry Note (or portion thereof) issued
subsequently upon exchange or transfer of a Book-Entry Note or in lieu
of a destroyed, lost or
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stolen Book-Entry Note, the most recent Interest Payment Date to which
interest has been paid or duly provided for on the predecessor
Book-Entry Note or Notes or if no such payment or provision has been
made, the Original Issue Date of the predecessor Book-Entry Note or
Notes, regardless of the date of authentication of such subsequently
issued Book-Entry Note. No Book-Entry Note shall represent any
Certificated Note.
Identification:
The Agents have arranged with the CUSIP Service Bureau (the "CUSIP
Service Bureau") of Standard & Poor's Ratings Service, a division of
the McGraw-Hill Companies ("S&P"), for the reservation of approximately
900 CUSIP numbers for each rank of Notes which have been reserved for
future assignment to Book-Entry Notes representing Notes issued in
book-entry form and have delivered to the Company, the Trustee and DTC
an initial written list of such CUSIP numbers. The Trustee will assign
CUSIP numbers to Book-Entry Notes as described below under Settlement
Procedure B. DTC will notify the CUSIP Service Bureau periodically of
the CUSIP numbers that the Trustee has assigned to Book-Entry Notes.
The Trustee will notify the Company at any time when fewer than 100 of
the respective reserved CUSIP numbers remain unassigned to Book-Entry
Notes, and, if it deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Book-Entry Notes representing Notes
issued in book-entry form. Upon obtaining such additional CUSIP
numbers, the Company will deliver a list of such additional numbers to
the Trustee and DTC. Book-Entry Notes having an aggregate principal
amount in excess of $500,000,000 and otherwise required to be
represented by the same Global Certificate will instead be represented
by two or more Global Certificates which shall be assigned the same
CUSIP number.
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Registration:
Each Book-Entry 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 Book-Entry Note (i.e., an owner of
a beneficial interest in a Book-Entry Note), or one or more indirect
participants in DTC designated by such owner, will designate one or
more participants in DTC (with respect to such 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 Note in
the account of such Participants. The ownership interest of such
beneficial owner in such Book-Entry 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.
Transfers:
Transfers of beneficial interests in a Book-Entry Note will be
accomplished by book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect participants in DTC) acting
on behalf of beneficial transferors and transferees of such Book-Entry
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
Book-Entry Notes Outstanding on such date that represent Book-Entry
Notes having the same Fixed Rate Terms or Floating Rate Terms, as the
case may be, other than Original Issue Dates, and for which interest
has been paid to the same date; (b) a date, occurring at least 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 Book-Entry Notes shall be exchanged for a single replacement
Book-Entry Note; and (c) a new CUSIP number to be assigned to such
replacement Book-Entry Note. Upon receipt of such a notice, DTC will
send to its
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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 forth such exchange date and the new
CUSIP number and stating that, as of such exchange date, the CUSIP
numbers of the Book-Entry Notes to be exchanged will no longer be
valid. On the specified exchange date, the Trustee will exchange such
Book-Entry Notes for a single Book-Entry Note bearing the new CUSIP
number and the CUSIP numbers of the exchanged Book-Entry Notes will, in
accordance with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing, if the
Book-Entry Notes to be exchanged exceed $500,000,000 in aggregate
principal amount, one replacement Book-Entry Note will be authenticated
and issued to represent each $500,000,000 of principal amount of the
exchanged Book-Entry Notes and an additional Book-Entry Note will be
authenticated and issued to represent any remaining principal amount of
such Book-Entry Notes (see "Denominations" below).
Denominations:
All Book-Entry Notes will be denominated in U.S. dollars and will be
issued in denominations of a minimum of $1,000 and integral multiples
of $1,000. Book-Entry Notes will be denominated in principal amounts
not in excess of $500,000,000. If one or more Book-Entry Notes having
an aggregate principal amount in excess of $500,000,000 would, but for
the preceding sentence, be represented by a single Book-Entry Note,
then one Book-Entry Note will be issued to represent each $500,000,000
principal amount of such Note or Notes issued in book-entry form and an
additional Book-Entry Note will be issued to represent any remaining
principal amount of such Note or Notes issued in book-entry form. In
such a case, each of the Book-Entry Notes shall be assigned the same
CUSIP number.
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Interest:
General. Interest on each Note issued in book-entry form will accrue
from the Interest Accrual Date of the Book-Entry Note representing such
Note. Each payment of interest on a Book-Entry Note will include
interest accrued through the day preceding, as the case may be, the
Interest Payment Date, Stated Maturity Date, Redemption Date or
Repayment Date. Interest payable at Maturity of a Book-Entry Note will
be payable to the Person to whom the principal of such Note is payable.
DTC will arrange for each pending deposit message described under
Settlement Procedure C below to be transmitted to S&P, 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 S&P.
Interest Payment Dates. Interest payments will be made on each Interest
Payment Date commencing with the first Interest Payment Date following
the Original Issue Date; provided, however, the first payment of
interest on any Book-Entry Note originally issued between a Regular
Record Date and an Interest Payment Date will occur on the Interest
Payment Date following the next Regular Record Date.
Fixed Rate Notes. Unless otherwise specified in the applicable Pricing
Supplement, interest payments on Fixed Rate Book-Entry Notes will be
made semiannually on June 15 and December 15 of each year and at
Maturity.
Floating Rate Notes. Except as provided in Part I under "Calculation of
Interest" and unless otherwise specified in the applicable Pricing
Supplement, the Interest Payment Date for a Floating Rate Note will be,
in the case of Floating Rate Notes which reset daily, weekly or
monthly, on the third Wednesday of each month or on the third Wednesday
of March, June, September and December of each year as specified in the
applicable Pricing Supplement; in the case of Floating Rate Notes which
reset quarterly, on the third Wednesday of March, June,
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September and December of each year; in the case of Floating Rate Notes
which reset semiannually, on the third Wednesday of the two months of
each year specified in the applicable Pricing Supplement; and in the
case of Floating Rate Notes which reset annually, on the third
Wednesday of the month specified in the applicable Pricing Supplement;
and, in each case, at Maturity. For additional special provisions
relating to Floating Rate Notes, see the Prospectus Supplement.
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 Note shall be the June 1 or
December 1 (whether or not a Business Day) preceding such Interest
Payment Date. Unless otherwise specified in the applicable Pricing
Supplement, the Regular Record Date with respect to any Interest
Payment Date for any Floating Rate Note shall be the date 15 calendar
days (whether or not a Business Day) preceding such Interest Payment
Date.
Notice of Interest Payments and Regular Record Dates. On the first
Business Day of January, April, July and October of each year, the
Trustee will deliver to the Company and 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 Company will
notify S&P of the interest rates determined on such Interest
Determination Date.
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 Book-Entry
Note issued under the Indenture on the following Interest Payment Date
(other than
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an Interest Payment Date coinciding with Maturity) and the total of
such amounts. DTC will confirm the amount payable on each Book-Entry
Note on such Interest Payment Date by reference to the daily bond
reports published by Standard & Poor's. On such Interest Payment Date,
the Company will pay to the Trustee, and the Trustee in turn will pay
to DTC, such total amount of interest due (other than at Maturity), at
the times and in the manner set forth below under "Manner of Payment."
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, interest and premium, if any, to be paid on each Book-Entry
Note issued under the Indenture having a Maturity in the following
month. The Trustee and DTC will confirm the amounts of such principal,
premium and interest payments with respect to a Book-Entry Note on or
about the fifth Business Day preceding the Maturity of such Book-Entry
Note. At such maturity, the Company will pay to the Trustee, and the
Trustee in turn will pay to DTC, the principal amount of such Note,
together with interest and premium, if any, due at such Maturity, at
the times and in the manner set forth below under "Manner of Payment."
Promptly after payment to DTC of the principal, interest and premium,
if any, due at the Maturity of such Book-Entry Note, the Trustee will
cancel and destroy such Book-Entry Note and deliver to the Company a
certificate of destruction therefor.
Manner of Payment. The total amount of any principal, premium, if any,
and interest due on Book-Entry Notes on any Interest Payment Date or at
Maturity shall be paid by the Company to the Trustee in funds available
for use as of 9:30 a.m., New York City time, on such date. The Company
will make such payment on such Book-Entry Notes by instructing the
Trustee to withdraw funds from an account maintained by the Company
with the Trustee. The Company will confirm such instructions in writing
to the Trustee. Prior to 10:00 a.m.,
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New York City time, on such date or as soon as possible thereafter, 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 of principal,
premium, if any, and interest due on a Book-Entry Note on such date.
Thereafter on such payment date, DTC will pay, in accordance with its
SDFS operating procedures then in effect, such amounts in funds
available for immediate use to the respective Participants in whose
names such Notes are recorded in the book-entry system maintained by
DTC. Neither the Company nor the Trustee shall have any responsibility
or liability for the payment by DTC of the principal, premium, if any,
or interest due on the Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any taxes required under applicable
law to be withheld from any interest payment on a Note will be
determined and withheld by the Participant, indirect participant in DTC
or other Person responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
Settlement Procedures:
Settlement Procedures with regard to each Book-Entry Note sold by the
Agents, as agents of the Company, will be as follows:
A. The applicable Agent will advise the Company by telephone of
the following Settlement information:
1. Taxpayer identification number of the purchaser.
2. Principal amount of the Note.
3. Fixed Rate Notes:
(a) interest rate;
(b) Regular Record Dates; and
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(c) Interest Payment Dates.
Floating Rate Notes:
(a) interest rate basis;
(b) index maturity;
(c) spread and/or spread multiplier, if any;
(d) initial interest rate;
(e) maximum interest rate, if any;
(f) minimum interest rate, if any;
(g) interest reset dates;
(h) interest determination dates;
(i) interest payment dates; and
(j) calculation agent.
4. Price to public of the Note.
5. Trade date.
6. Settlement Date (Original Issue Date).
7. Stated Maturity.
8. Redemption provisions, if any:
(a) Redemption Commencement Date
(b) initial redemption percentage
(c) annual redemption percentage reduction
9. Repayment Date(s), if any.
10. Net proceeds to the Company.
11. Agent's commission.
B. The Company will advise the Trustee by telecopy or other
method acceptable to the Trustee of the above settlement
information received with respect to each Note from the
applicable Agent and shall confirm to the Trustee that the
principal amount of Notes,
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including such Note, issued as of the relevant Settlement Date
shall not exceed the limit with respect to the principal
amount of Notes specified in the most recent Company Order
delivered to the Trustee pursuant to Section 303 of the
Indenture.
C. The Trustee will assign a CUSIP Number to the Book-Entry Note
and will telephone and advise the Company and the applicable
Agent of such CUSIP Number. The Trustee will communicate to
DTC and the applicable Agent through DTC's Participant
Terminal System a pending deposit message specifying the
following settlement information:
1. The information set forth in Settlement Procedure A.
2. Identification numbers of the participant accounts
maintained by DTC on behalf of the Trustee and the
applicable Agent.
3. Identification as a Fixed Rate Book-Entry Note or
Floating Rate Book-Entry Note.
4. Initial Interest Payment Date for such Note, number
of days by which such date succeeds the related
record date for DTC purposes (which in the case of
Floating Rate Notes that reset daily or weekly will
be the date five calendar days immediately preceding
the applicable Interest Payment Date and in the case
of all other Book-Entry Notes will be the Regular
Record Date, as defined in the Notes) and, if then
calculable, the amount of interest payment on such
Interest Payment Date (which amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Book-Entry Note representing such
Note.
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6. Whether such Book-Entry Note represents any other
Notes issued or to be issued in book-entry form.
D. The Company will deliver to the Trustee a Book-Entry Note
representing such Note in a form that has been approved by the
Company, the applicable Agent and the Trustee.
E. The Trustee will complete and authenticate the Book-Entry
Note.
F. DTC will credit such Note to the participant account of the
Trustee maintained by DTC.
G. 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 applicable Agent maintained
by DTC and (ii) to debit the settlement account of the
applicable Agent and credit the settlement account of the
Trustee maintained by DTC, in an amount equal to the price of
such Note less the applicable Agent's commission. Any entry of
such a deliver order shall be deemed to constitute a
representation and warranty by the Trustee to DTC that (i) the
Book-Entry Note has been issued and authenticated and (ii) the
Trustee is holding such Book-Entry Note pursuant to the
Certificate Agreement between the Trustee and DTC.
H. The applicable Agent will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC (i) to debit
such Note to the applicable Agent's participant account and
credit such Note to the participant accounts of the
appropriate Participants maintained by DTC and (ii) to debit
the settlement accounts of such Participants and credit the
settlement account of the applicable Agent maintained by DTC,
in an amount equal
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to the initial public offering price of such Note.
I. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures G and H will be settled in
accordance with SDFS operating procedures in effect on the
Settlement Date.
J. The Trustee will credit to an account of the Company
maintained by the Trustee funds available for immediate use in
the amount transferred to the Trustee in accordance with
Settlement Procedure G.
K. The Trustee will send a copy of the Book-Entry Note stamped
"SPECIMEN" on each page 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 been settled.
L. The applicable Agent will confirm the purchase of such Note to
the purchaser either by transmitting to the Participant with
respect to such Note a confirmation order through DTC's
Participant Terminal System or by mailing a written
confirmation to such purchaser.
Settlement Procedures Timetable:
For offers to purchase Notes accepted by the Company, Settlement
Procedures "A" through "L" set forth above shall be completed as soon
as possible but not later than the respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the trade date
B 12:00 noon on the trade date
C 2:00 p.m. on the trade date
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D 3:00 p.m. on the Business Day before
Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H No later than 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business Day after the trade
date, Settlement Procedures A, B, and C may, if necessary, be completed
at any time prior to the specified times on the first Business Day
after such trade date. In connection with a sale which is to be settled
more than one Business Day after the trade date, if the initial
interest rate for a Floating Rate Note is not known at the time that
Settlement Procedure A is completed, Settlement Procedures B and C
shall be completed as soon as such rate has been determined, but no
later than 11:00 a.m. and 2:00 p.m., New York City time, respectively,
on the second Business Day before the Settlement Date. Settlement
Procedure I is subject to extension in accordance with any extension of
Fedwire closing deadlines and in the other events specified in the SDFS
operating procedures in effect on the Settlement Date.
If settlement of a Book-Entry Note is rescheduled or cancelled, the
Company shall notify the Trustee and the Trustee will deliver to DTC,
through DTC's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled Settlement Date.
Failure to Settle:
If the Trustee has not entered an SDFS deliver order with respect to a
Book-Entry Note pursuant to Settlement Procedure G, then upon written
request (which may be evidenced by facsimile transmission) of the
Company, the Trustee shall deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a withdrawal message
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instructing DTC to debit such Note to the participant account of the
Trustee maintained at DTC. DTC will process the withdrawal message,
provided that such participant account contains a principal amount of
the Book-Entry Note representing such Note that is at least equal to
the principal amount to be debited. If withdrawal messages are
processed with respect to all the Notes represented by a Book-Entry
Note, the Trustee will mark such Book-Entry Note "cancelled," make
appropriate entries in its records and send such cancelled Book-Entry
Note to the Company. The CUSIP number assigned to such Book-Entry Note
shall, in accordance with CUSIP Service Bureau procedures, be cancelled
and not immediately reassigned. If withdrawal messages are processed
with respect to a portion of the Notes represented by a Book-Entry
Note, the Trustee will exchange such Book-Entry Note for two Book-Entry
Notes, one of which shall represent the Book-Entry Notes for which
withdrawal messages are processed and shall be cancelled immediately
after issuance, and the other of which shall represent the other Notes
previously represented by the surrendered Book-Entry Note and shall
bear the CUSIP number of the surrendered Book-Entry Note.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial purchaser
thereof (or a person, including an indirect participant in DTC, acting
on behalf of such purchaser), such Participants and, in turn, the
applicable Agent may enter SDFS deliver orders through DTC's
Participant Terminal System reversing Settlement Procedures G and H,
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 applicable Agent to perform its obligations
hereunder or under the Distribution Agreement, the Company will
reimburse the applicable Agent on an equitable basis for its loss of
the use of funds during the
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period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Note, DTC may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to
settle with respect to a Note that was to have been represented by a
Book-Entry Note also representing other Notes, the Trustee will
provide, in accordance with Settlement Procedures D and E, for the
authentication and issuance of a Book-Entry Note representing such
remaining Notes and will make appropriate entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations:
The Certificated Notes, other than Indexed Notes and Multi-Currency
Notes, will be issued in denominations of a minimum of $1,000 and
integral multiples of $1,000. Indexed Notes or Multi-Currency Notes
will be issued in the denominations specified in the related
Multi-Currency or Indexed Note Prospectus Supplement and Pricing
Supplement.
Interest:
Each Certificated Note will bear interest in accordance with its terms.
Interest will begin to accrue on the Original Issue Date of a
Certificated Note for the first Interest Payment Period and on the most
recent Interest Payment Date to which interest has been paid for all
subsequent Interest Payment Periods. Each payment of interest shall
include interest accrued to, but excluding, the date of such payment.
Unless otherwise specified in the applicable Pricing Supplement,
interest payments in respect of Fixed Rate Certificated Notes will be
made semiannually on June 15 and December 15 of each year and at
Maturity. However, the first payment of interest on any Certificated
Note issued between a Regular Record Date and an Interest
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Payment Date will be made on the Interest Payment Date following the
next succeeding Regular Record Date. Unless otherwise specified in the
applicable Pricing Supplement, the Regular Record Date with respect to
any Interest Payment Date for a Fixed Rate Certificated Note shall be
the June 1 or December 1 (whether or not a Business Day) preceding such
Interest Payment Date. Interest at Maturity will be payable to the
person to whom the principal is payable.
Except as provided in Part I under "Calculation of Interest" and unless
otherwise specified in the applicable Pricing Supplement, the Interest
Payment Date for a Floating Rate Certificated Note will be, in the case
of Floating Rate Notes which reset daily, weekly or monthly, on the
third Wednesday of each month or on the third Wednesday of March, June,
September and December of each year as specified in the applicable
Pricing Supplement; in the case of Floating Rate Notes which reset
quarterly, on the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes which reset
semiannually, on the third Wednesday of the two months of each year
specified in the applicable Pricing Supplement; and in the case of
Floating Rate Notes which reset annually, on the third Wednesday of the
month specified in the applicable Pricing Supplement; and, in each
case, at Maturity. Unless otherwise specified in the applicable Pricing
Supplement, the Regular Record Date with respect to a Floating Rate
Note shall be the date 15 calendar days (whether or not a Business Day)
preceding an Interest Payment Date.
Payments of Principal and Interest:
Upon presentment and delivery of the Certificated Note, the Trustee or
the Company's duly authorized agent will pay the principal amount of
each Certificated Note at Maturity and the final installment of
interest in next day funds. All interest payments in U.S. dollars on a
Certificated
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Note, other than interest due at Maturity, will be made by check drawn
on the Trustee or the Company's duly authorized agent and mailed by
such Trustee or agent to the person entitled thereto as provided in the
Certificated Note. However, the Registered Owners (as hereinafter
defined) of ten million dollars or more in aggregate principal amount
of the same series of Certificated Notes (whether having identical or
different terms and provisions) shall be entitled to receive payments
of interest, other than at Maturity, by wire transfer of immediately
available funds if appropriate wire transfer instructions have been
received in writing by the Trustee or such agent not less than 16 days
prior to the applicable Interest Payment Date.
For special provisions relating to Multi-Currency Notes or Indexed
Notes, see the related Multi-Currency or Indexed Note Prospectus
Supplement.
The Trustee will provide monthly to the Company a list of the principal
and interest in each currency to be paid on Certificated Notes maturing
in the next succeeding month. Such Trustee or agent will be responsible
for withholding taxes on interest paid as required by applicable law,
but shall be relieved from any such responsibility if it acts in good
faith and in reliance upon an opinion of counsel.
Certificated Notes presented to the Trustee or the Company's duly
authorized agent at Maturity for payment will be cancelled by such
Trustee or agent. All cancelled Certificated Notes held by such Trustee
or agent shall be destroyed, and the Trustee or agent shall furnish to
the Company a certificate with respect to such destruction.
Settlement Procedures:
Settlement Procedures with regard to each Certificated Note purchased
through the Agents, as agents, shall be as follows:
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A. Each 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 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 of the Certificated Note.
5. Denomination of the Certificated Note.
6. Fixed Rate Notes:
(a) interest rate;
(b) Regular Record Dates; and
(c) Interest Payment Dates.
Floating Rate Notes:
(a) interest rate basis or bases;
(b) index maturity;
(c) spread or spread multiplier, if any;
(d) initial interest rate;
(e) maximum interest rate, if any;
(f) minimum interest rate, if any;
(g) interest reset dates;
(h) interest determination dates;
(i) interest payment dates; and
(j) calculation agent.
Multi-Currency or Indexed Notes:
(a) specified currency;
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(b) index, if any;
(c) base rate of exchange, if any; and
(d) any other applicable terms.
7. Currency or currency unit in which the Certificated
Note is to be denominated.
8. Price to public of the Certificated Note.
9. Settlement Date (Original Issue Date).
10. Stated Maturity.
11. Redemption provisions, if any:
(a) Redemption Commencement Date
(b) initial redemption percentage
(c) annual redemption percentage reduction
12. Repayment Date(s), if any.
13. Net proceeds to the Company.
14. Agent's commission.
B. The Company shall provide to the Trustee by telecopy or other
method acceptable to the Trustee the above Settlement
information with respect to each Certificated Note received
from the Agents and the name of the applicable Agent and shall
confirm to the Trustee that the principal amount of Notes,
including such Certificated Note, issued as of the relevant
Settlement Date shall not exceed the limit with respect to the
principal amount of Notes specified in the most recent Company
Order delivered to the Trustee pursuant to Section 303 of the
Indenture. The Company also shall cause the Trustee or its
duly appointed agent to issue, authenticate and deliver
Certificated Notes in accordance with the Settlement
Procedures Timetable set forth below. The Company also shall
provide to the Trustee and the applicable Agent a copy of the
applicable Pricing Supplement. The Company also shall provide
to the Trustee and the applicable Agent a copy of a
Multi-Currency
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or Indexed Note Prospectus Supplement, if applicable.
C. The Trustee or its duly appointed agent will complete and
authenticate the Certificated Note, including the Guarantee,
in form approved by the Company.
D. With respect to each trade, the Trustee will deliver the
Certificated Note and one photocopy thereof stamped "SPECIMEN"
on each page to the applicable Agent at the following
addresses:
Credit Suisse First Boston LLC
1 Madison Avenue
New York, New York 10010
Attention: Paul Riley
J.P. Morgan Securities Inc.
55 Water Street, Room 226
Windows 17 and 18
New York, New York 10041
Telephone: (212) 638-6787
Telecopy: (212) 638-5618
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
Telephone:(212) 887-8936
Telecopy: (212) 582-5419
Merrill Lynch & Co.
Money Markets Clearance
55 Water Street, 3rd Floor
N.S.C.C. Window
New York, New York 10041
Attention: Al Mitchell
Telephone: (212) 558-2405
Telecopy: (212) 558-2457
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Popular Securities, Inc.
209 Munoz Rivera Avenue
Suite 1020
Hato Rey, Puerto Rico 00918
Attention: Ken McGrath
Telephone: (787) 766-4200
Telecopy: (787) 766-3485
UBS Warburg LLC
677 Washington Blvd
Stamford, Connecticut 06901
Attention: Fixed Income Syndicate
Telephone: (203) 719-1088
Telecopy: (203) 719-0495
The Trustee will keep Stub 1. The applicable Agent will acknowledge
receipt of the Certificated Note through a broker's receipt and will
keep the photocopy. Delivery of the Certificated Note will be made only
against such acknowledgment of receipt.
Upon determination that the Certificated Note, including the related
Guarantee, has been authorized, delivered and completed as
aforementioned, the applicable 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. The applicable Agent will deliver the Certificated Note, the
related Guarantee endorsed thereon, as well as a copy of the
Prospectus and any applicable Pricing Supplement or
Supplements received from the Trustee, to the purchaser
against payment in immediately available funds.
F. The Trustee will send a photocopy of the Certificated Note
stamped "SPECIMEN" on each page to the Company.
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Settlement Procedures Timetable:
For offers to purchase Certificated Notes accepted by the Company,
Settlement Procedures "A" through "F" set forth above shall be
completed on or before the respective times set forth below:
Settlement
Procedure Time
--------- ----
A-B 3:00 PM on Business Day prior to Settlement
C-D 2:15 PM on Settlement Date
E 3:00 PM on Settlement Date
F 5:00 PM on Settlement Date
Failure to Settle:
In the event that a purchaser of a Certificated Note from the Company
shall either fail to accept delivery of or make payment for a
Certificated Note on the date fixed for settlement, the applicable
Agent will forthwith notify the Trustee and the Company by telephone,
confirmed in writing, and return the Certificated Note to the Trustee.
The Trustee or the Company's duly authorized agent, upon receipt of the
Certificated Note from the applicable Agent, will immediately advise
the Company, and the Company will promptly arrange to credit the
account of the applicable Agent in an amount of immediately available
funds equal to the amount previously paid by the applicable Agent in
settlement for the 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 the applicable Agent to
perform its obligations hereunder or under the Distribution Agreement,
the Company will reimburse the applicable Agent on an equitable basis
for its loss of the use of funds during the period when the funds were
credited to the account of the Company. Immediately upon receipt of the
Certificated Note in respect of which the failure occurred, the Trustee
or the Company's duly authorized agent will cancel and destroy the
Certificated Note, make appropriate entries in its records to reflect
the fact that the Certificated Note was never issued, and accordingly
notify the Company in writing.
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