EXHIBIT 10(a)
POPULAR, INC.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(Dated as of March 21, 2003)
Medium-Term Notes, Series 4 (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, less the aggregate initial offering price of
"Securities" (as defined in the Prospectus, dated November 19, 2001, relating to
debt securities and preferred stock of the Company, Popular International Bank,
Inc. and Popular North America, 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, 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 principal for resale.
The Notes are being sold pursuant to a Distribution Agreement among the
Company and the Agents, dated March 21, 2003 (the "Distribution Agreement"). The
Notes will be issued pursuant to the Indenture, dated as of February 15, 1995,
as supplemented by the First Supplemental Indenture, dated as of May 8, 1997 and
the Second Supplemental Indenture, dated as of August 5, 1999 (together, the
"Indenture"), each between the Company and Bank One, NA (formerly known as The
First National Bank of Chicago), as 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.
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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 special provisions relating to Multi-Currency
Notes or Indexed Notes, see the related
Multi-Currency or Indexed Note Prospectus 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
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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
Company 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 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
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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;
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%);
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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
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
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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
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.
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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
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
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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.
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
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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.
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."
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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:
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
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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
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
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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.
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.
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
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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
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
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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.
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
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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, 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
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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 Payments of Interest Only. Promptly after each
and Interest: 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 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
-19-
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., 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.
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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
(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.
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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,
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.
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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.
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
-23-
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 account 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 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.
-24-
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
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
-25-
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
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
-26-
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 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.
-27-
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 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
-28-
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
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.
-29-
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:
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.
-30-
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;
(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
-31-
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
or Indexed Note Prospectus Supplement, if
applicable.
C. The Trustee or its duly appointed
agent will complete and
authenticate the Certificated Notes
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
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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
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 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.
-33-
E. The applicable Agent will deliver
the Certificated Note, 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.
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
-34-
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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