POPULAR, INC.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(Dated as of June 30, 2004)
Medium-Term Notes, Series 5 (collectively, the "Notes") in the
aggregate principal amount of up to $2,500,000,000, less the aggregate initial
offering price of Securities (as defined in the Prospectus, dated December 29,
2003, 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 UBS Securities LLC, Banc of America Securities LLC, Keefe, Bruyette &
Woods, Inc. and Popular Securities, Inc., 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 as of June 30, 2004 (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 J.P. Morgan Trust
Company, National Association (successor in interest to Bank One, N.A.), as
Trustee (the "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 December 29, 2003, 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 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 UBS Securities LLC:
UBS Securities LLC
677 Washington Boulevard
Stamford, Connecticut 06901
Attention: Fixed Income Syndicate
Telephone: (203) 719-1088
Telecopy: (203) 719-0495
To Banc of America Securities LLC:
Banc of America Securities LLC
9 West 57th Street
NY1-301-2M-01
New York, New York 10019
Attention: High Grade Debt Capital Markets
Transaction Management
Telecopy: (212) 847-5184
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To Keefe, Bruyette & Woods, Inc.:
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
Telecopy: (212) 582-5419
To Popular Securities, Inc.:
Popular Securities, Inc.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: Ken McGrath
Telecopy: (787) 766-3485
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 UBS Securities LLC:
UBS Securities LLC
677 Washington Boulevard
Stamford, Connecticut 06901
Attention: Fixed Income Syndicate
Telephone: (203) 719-1088
Telecopy: (203) 719-0495
To Banc of America Securities LLC:
Banc of America Securities LLC
9 West 57th Street
NY1-103-2M-01
New York, New York 10019
Attention: High Grade Debt Capital Markets
Transaction Management
Telecopy: (212) 847-5184
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To Keefe, Bruyette & Woods, Inc.:
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
Telecopy: (212) 582-5419
To Popular Securities, Inc.:
Popular Securities, Inc.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: Ken McGrath
Telecopy: (787) 766-3485
To the Trustee:
J.P. Morgan Trust Company, National Association
227 W. Monroe Street, Suite 2600
Chicago, IL 60606
Attention: Institutional Trust Services/Georges
N. Reaves
Telephone: (312) 267-5121
Telecopy: (312) 267-5209
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 time set forth under
the applicable "Settlement Procedures Timetable,"
such offer shall not be settled until the
Business Day following the completion of
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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 UBS Securities LLC:
UBS Securities LLC
677 Washington Boulevard
Stamford, Connecticut 06901
Attention: Fixed Income Syndicate
Telephone: (203) 719-1088
Telecopy: (203) 719-0495
To Banc of America Securities LLC:
Banc of America Securities LLC
9 West 57th Street
NY1-301-2M-01
New York, New York 10019
Attention: High Grade Debt Capital Markets
Transaction Management
Telecopy: (212) 847-5184
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To Keefe, Bruyette & Woods, Inc.:
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
Telecopy: (212) 582-5419
To Popular Securities, Inc.:
Popular Securities, Inc.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: Ken McGrath
Telecopy: (787) 766-3485
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.
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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 June 30, 2004, 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
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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
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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.
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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
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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
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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.
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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
-26-
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.
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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.
-28-
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
-29-
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:
UBS Securities LLC
677 Washington Boulevard
Stamford, Connecticut 06901
Attention: Fixed Income Syndicate
Telephone: (203) 719-1088
Telecopy: (203) 719-0495
Banc of America Securities LLC
9 West 57th Street
NY1-301-2M-01
New York, New York 10019
Attention: High Grade Debt Capital Markets
Transaction Management
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Telecopy: (212) 847-5184
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
Telecopy: (212) 582-5419
Popular Securities, Inc.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: Ken McGrath
Telecopy: (787) 766-3485
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.
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:
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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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