POPULAR NORTH AMERICA, INC.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(Dated as of June 30, 2004)
Medium-Term Notes, Series F (collectively, the "Notes") in the
aggregate principal amount of up to $2,500,000,000, less the aggregate initial
public offering price of Securities (as defined in the Prospectus, dated
December 29, 2003, relating to debt securities and preferred stock of the
Company, Popular, Inc. (the "Guarantor") and Popular International Bank, Inc.)
authenticated and delivered upon original issuance other than the Notes prior to
or after the date hereof, are to be offered on a continuous basis by Popular
North America, Inc. (the "Company"), through 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 principals for resale.
The Notes are being sold pursuant to a Distribution Agreement among the
Company, the Agents and the Guarantor, dated as of June 23, 2004 (the
"Distribution Agreement"). The Notes will be issued pursuant to the Indenture,
dated as of October 1, 1991, as supplemented by the First Supplemental
Indenture, dated as of February 28, 1995, the Second Supplemental Indenture,
dated as of May 8, 1997, and the Third Supplemental Indenture, dated as of
August 5, 1999 (together, the "Indenture"), each between the Company and 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.
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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 Prospectus Note Supplement.
Registration: Notes will be issued only in fully registered form.
Redemption/Repayment: The Notes will be subject to repayment at the option
of
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the Holders thereof in accordance with the terms of
the Notes on their respective Repayment Dates, if
any. Repayment Dates, if any, will be fixed at the
time of sale and set forth in the applicable Pricing
Supplement and in the applicable Note. If no
Repayment Dates are indicated with respect to a Note,
such Note will not be repayable at the option of the
Holder prior to Maturity.
The Notes will be subject to redemption by the
Company on and after their respective Redemption
Commencement Dates, if any. Redemption Commencement
Dates, if any, will be fixed at the time of sale and
set forth in the applicable Pricing Supplement and in
the applicable Note. If no Redemption Commencement
Dates are indicated with respect to a Note, such Note
will not be redeemable prior to Maturity, except as
set forth in the Prospectus in the event that the
Guarantor is obligated to pay Additional Amounts in
respect of the Notes.
Calculation of Interest: In the case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months. In the case of Floating Rate Notes, interest
will be calculated and paid on the basis of the
actual number of days in the interest period divided
by 360, with the exception of Treasury Rate Notes and
CMT Rate Notes, for which interest will be calculated
on the basis of the actual number of days in the
interest period divided by the actual number of days
in the year. If an Interest Payment Date with respect
to any Fixed Rate Note falls on a day that is not a
Business Day (as hereinafter defined), the payment of
interest required to be made on such Interest Payment
Date need not be made on such day, but may be made on
the next succeeding Business Day with the same force
and effect as if made on such Interest Payment Date
and no interest shall accrue on such payment for the
period from and after such Interest Payment Date. If
an Interest Payment Date with respect to any Floating
Rate Note would otherwise fall on a day that is not a
Business Day, such Interest Payment Date will be the
following day that is a Business Day, except that in
the case of a LIBOR Note, if such day falls in the
next calendar month, such Interest Payment Date will
be the
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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
To Keefe, Bruyette & Woods, Inc.:
Keefe, Bruyette & Woods, Inc.
787 Seventh Avenue
New York, New York 10019
Attention: Fixed Income Syndicate
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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
NY1-301-2M-01
New York, New York 10019
Attention: High Grade Debt Capital Markets
Transaction Management
Telecopy: (212) 847-5184
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
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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
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 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
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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."
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend
solicitation of purchases at any time. Upon receipt
of such instructions, the Agents will forthwith
suspend solicitation of offers to purchase from the
Company until such time as the Company has advised
them that solicitation of offers to purchase may be
resumed. If the Company decides to amend the
Registration Statement (including incorporating any
documents by reference therein) or supplement any of
such documents (other than to change rates or other
variable terms), it will promptly advise the Agents
and, except in the case of an amendment by the filing
of a document incorporated by reference in the
Registration Statement, will furnish each Agent and
its counsel with copies of the proposed amendment or
supplement. One copy of such filed document, along
with a copy of the cover letter sent to the
Commission, will be delivered or mailed to the Agents
at the following addresses:
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To 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
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
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copies of such Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the most recent Prospectus and Pricing
Supplement must accompany or precede the earlier of
(a) the written confirmation of a sale sent to a
customer or his agent and (b) the delivery of Notes
to a customer or his agent.
Authenticity of
Signatures: The Agents will have no obligation or liability to
the Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or the Trustee on
any Note or related Guarantee.
Documents Incorporated
by Reference: The Company shall supply each Agent with an adequate
supply of all documents incorporated by reference in
the Registration Statement.
Business Day: "Business Day" has the meaning set forth in the
Prospectus Supplement.
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PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representations from the
Company and The First National Bank of Chicago to DTC, dated August 6, 1999, as
supplemented by a Bring-Down Letter of Representations from the Company and the
Trustee to DTC, dated 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
stolen Book-Entry Note, the most recent Interest
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Payment Date to which interest has been paid or duly
provided for on the predecessor Book-Entry Note or
Notes or if no such payment or provision has been
made, the Original Issue Date of the predecessor
Book-Entry Note or Notes, regardless of the date of
authentication of such subsequently issued Book-Entry
Note. No Book-Entry Note shall represent any
Certificated Note.
Identification: The Agents have arranged with the CUSIP Service
Bureau (the "CUSIP Service Bureau") of Standard &
Poor's Ratings Service, a division of the McGraw-Hill
Companies ("S&P"), for the reservation of
approximately 900 CUSIP numbers for each rank of
Notes which have been reserved for future assignment
to Book-Entry Notes representing Notes issued in
book-entry form and have delivered to the Company,
the Trustee and DTC an initial written list of such
CUSIP numbers. The Trustee will assign CUSIP numbers
to Book-Entry Notes as described below under
Settlement Procedure B. DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that
the Trustee has assigned to Book-Entry Notes. The
Trustee will notify the Company at any time when
fewer than 100 of the respective reserved CUSIP
numbers remain unassigned to Book-Entry Notes, and,
if it deems necessary, the Company will reserve
additional CUSIP numbers for assignment to Book-Entry
Notes representing Notes issued in book-entry form.
Upon obtaining such additional CUSIP numbers, the
Company will deliver a list of such additional
numbers to the Trustee and DTC. Book-Entry Notes
having an aggregate principal amount in excess of
$500,000,000 and otherwise required to be represented
by the same Global Certificate will instead be
represented by two or more Global Certificates which
shall be assigned the same CUSIP number.
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Registration: Each Book-Entry Note will be registered in the name
of CEDE & CO., as nominee for DTC, on the register
maintained by the Trustee under the Indenture. The
beneficial owner of a Book-Entry Note (i.e., an owner
of a beneficial interest in a Book-Entry Note), or
one or more indirect participants in DTC designated
by such owner, will designate one or more
participants in DTC (with respect to such Book-Entry
Note, the "Participants") to act as agent for such
beneficial owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such Book-Entry Note in the account of
such Participants. The ownership interest of such
beneficial owner in such Book-Entry Note will be
recorded through the records of such Participants or
through the separate records of such Participants and
one or more indirect participants in DTC.
Transfers: Transfers of beneficial interests in a Book-Entry
Note will be accomplished by book entries made by DTC
and, in turn, by Participants (and in certain cases,
one or more indirect participants in DTC) acting on
behalf of beneficial transferors and transferees of
such Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice specifying (a)
the CUSIP numbers of two or more Book-Entry Notes
Outstanding on such date that represent Book-Entry
Notes having the same Fixed Rate Terms or Floating
Rate Terms, as the case may be, other than Original
Issue Dates, and for which interest has been paid to
the same date; (b) a date, occurring at least 30 days
after such written notice is delivered and at least
30 days before the next Interest Payment Date for the
related Book-Entry Notes, on which such Book-Entry
Notes shall be exchanged for a single replacement
Book-Entry Note; and (c) a new CUSIP number to be
assigned to such replacement Book-Entry Note. Upon
receipt of such a notice, DTC will send to its
Participants (including the Trustee) a written
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reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau written notice setting forth
such exchange date and the new CUSIP number and
stating that, as of such exchange date, the CUSIP
numbers of the Book-Entry Notes to be exchanged will
no longer be valid. On the specified exchange date,
the Trustee will exchange such Book-Entry Notes for a
single Book-Entry Note bearing the new CUSIP number
and the CUSIP numbers of the exchanged Book-Entry
Notes will, in accordance with CUSIP Service Bureau
procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the
Book-Entry Notes to be exchanged exceed $500,000,000
in aggregate principal amount, one replacement
Book-Entry Note will be authenticated and issued to
represent each $500,000,000 of principal amount of
the exchanged Book-Entry Notes and an additional
Book-Entry Note will be authenticated and issued to
represent any remaining principal amount of such
Book-Entry Notes (see "Denominations" below).
Denominations: All Book-Entry Notes will be denominated in U.S.
dollars and will be issued in denominations of a
minimum of $1,000 and integral multiples of $1,000.
Book-Entry Notes will be denominated in principal
amounts not in excess of $500,000,000. If one or more
Book-Entry Notes having an aggregate principal amount
in excess of $500,000,000 would, but for the
preceding sentence, be represented by a single
Book-Entry Note, then one Book-Entry Note will be
issued to represent each $500,000,000 principal
amount of such Note or Notes issued in book-entry
form and an additional Book-Entry Note will be issued
to represent any remaining principal amount of such
Note or Notes issued in book-entry form. In such a
case, each of the Book-Entry Notes shall be assigned
the same CUSIP number.
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Interest: General. Interest on each Note issued in book-entry
form will accrue from the Interest Accrual Date of
the Book-Entry Note representing such Note. Each
payment of interest on a Book-Entry Note will include
interest accrued through the day preceding, as the
case may be, the Interest Payment Date, Stated
Maturity Date, Redemption Date or Repayment Date.
Interest payable at Maturity of a Book-Entry Note
will be payable to the Person to whom the principal
of such Note is payable. DTC will arrange for each
pending deposit message described under Settlement
Procedure C below to be transmitted to S&P, which
will use the information in the message to include
certain terms of the related Book-Entry Note in the
appropriate daily bond report published by S&P.
Interest Payment Dates. Interest payments will be
made on each Interest Payment Date commencing with
the first Interest Payment Date following the
Original Issue Date; provided, however, the first
payment of interest on any Book-Entry Note
originally issued between a Regular Record Date and
an Interest Payment Date will occur on the Interest
Payment Date following the next Regular Record Date.
Fixed Rate Notes. Unless otherwise specified in the
applicable Pricing Supplement, interest payments on
Fixed Rate Book-Entry Notes will be made
semiannually on June 15 and December 15 of each
year and at Maturity.
Floating Rate Notes. Except as provided in Part I
under "Calculation of Interest" and unless
otherwise specified in the applicable Pricing
Supplement, the Interest Payment Date for a Floating
Rate Note will be, in the case of Floating Rate
Notes which reset daily, weekly or monthly, on the
third Wednesday of each month or on the third
Wednesday of March, June, September and December of
each year as specified in the applicable Pricing
Supplement; in the case of Floating Rate Notes
which reset quarterly, on the third Wednesday of
March, June, September and December of each year;
in the case
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of Floating Rate Notes which reset semiannually, on
the third Wednesday of the two months of each year
specified in the applicable Pricing Supplement; and
in the case of Floating Rate Notes which reset
annually, on the third Wednesday of the month
specified in the applicable Pricing Supplement; and,
in each case, at Maturity. For additional special
provisions relating to Floating Rate Notes, see the
Prospectus Supplement.
Regular Record Dates. Unless otherwise specified in
the applicable Pricing Supplement, the Regular Record
Date with respect to any Interest Payment Date for a
Fixed Rate Note shall be the June 1 or December 1
(whether or not a Business Day) preceding such
Interest Payment Date. Unless otherwise specified in
the applicable Pricing Supplement, the Regular Record
Date with respect to any Interest Payment Date for
any Floating Rate Note shall be the date 15 calendar
days (whether or not a Business Day) preceding such
Interest Payment Date.
Notice of Interest Payments and Regular Record Dates.
On the first Business Day of January, April, July and
October of each year, the Trustee will deliver to the
Company and DTC a written list of Regular Record
Dates and Interest Payment Dates that will occur
during the six-month period beginning on such first
Business Day with respect to Floating Rate Book-Entry
Notes. Promptly after each Interest Determination
Date for Floating Rate Book-Entry Notes, the Company
will notify S&P of the interest rates determined on
such Interest Determination Date.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each
Regular Record Date, the Trustee will deliver to the
Company and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
Book-Entry Note issued under the Indenture on the
following Interest Payment Date (other than an
Interest Payment Date coinciding with Maturity) and
the total of such amounts. DTC will confirm
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the amount payable on each Book-Entry Note on such
Interest Payment Date by reference to the daily bond
reports published by Standard & Poor's. On such
Interest Payment Date, the Company will pay to the
Trustee, and the Trustee in turn will pay to DTC,
such total amount of interest due (other than at
Maturity), at the times and in the manner set forth
below under "Manner of Payment."
Payments at Maturity. On or about the first Business
Day of each month, the Trustee will deliver to the
Company and DTC a written list of principal, interest
and premium, if any, to be paid on each Book-Entry
Note issued under the Indenture having a Maturity in
the following month. The Trustee and DTC will confirm
the amounts of such principal, premium and interest
payments with respect to a Book-Entry Note on or
about the fifth Business Day preceding the Maturity
of such Book-Entry Note. At such maturity, the
Company will pay to the Trustee, and the Trustee in
turn will pay to DTC, the principal amount of such
Note, together with interest and premium, if any, due
at such Maturity, at the times and in the manner set
forth below under "Manner of Payment." Promptly after
payment to DTC of the principal, interest and
premium, if any, due at the Maturity of such
Book-Entry Note, the Trustee will cancel and destroy
such Book-Entry Note and deliver to the Company a
certificate of destruction therefor.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Book-Entry Notes
on any Interest Payment Date or at Maturity shall be
paid by the Company to the Trustee in funds available
for use as of 9:30 a.m., New York City time, on such
date. The Company will make such payment on such
Book-Entry Notes by instructing the Trustee to
withdraw funds from an account maintained by the
Company with the Trustee. The Company will confirm
such instructions in writing to the Trustee. Prior to
10:00 a.m., 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
instruc-
-18-
tions in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for
immediate use by DTC, each payment of principal,
premium, if any, and interest due on a Book-Entry
Note on such date. Thereafter on such payment date,
DTC will pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds
available for immediate use to the respective
Participants in whose names such Notes are recorded
in the book-entry system maintained by DTC. Neither
the Company nor the Trustee shall have any
responsibility or liability for the payment by DTC of
the principal, premium, if any, or interest due on
the Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Note will be determined and withheld by
the Participant, indirect participant in DTC or other
Person responsible for forwarding payments and
materials directly to the beneficial owner of such
Note.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Note sold by the Agents, as agents of the Company,
will be as follows:
A. The applicable Agent will advise the Company
by telephone of the following Settlement
information:
1. Taxpayer identification number of
the purchaser.
2. Principal amount of the Note.
3. Fixed Rate Notes:
(a) interest rate;
(b) Regular Record Dates; and
(c) Interest Payment Dates.
Floating Rate Notes:
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(a) interest rate basis;
(b) index maturity;
(c) spread and/or spread
multiplier, if any;
(d) initial interest rate;
(e) maximum interest rate, if
any;
(f) minimum interest rate, if
any;
(g) interest reset dates;
(h) interest determination
dates;
(i) interest payment dates; and
(j) calculation agent.
4. Price to public of the Note.
5. Trade date.
6. Settlement Date (Original Issue
Date).
7. Stated Maturity.
8. Redemption provisions, if any:
(a) Redemption Commencement
Date
(b) initial redemption
percentage
(c) annual redemption
percentage reduction
9. Repayment Date(s), if any.
10. Net proceeds to the Company.
11. Agent's commission.
B. The Company will advise the Trustee by
telecopy or other method acceptable to the
Trustee of the above settlement information
received with respect to each Note from the
applicable Agent and shall confirm to the
Trustee that the principal amount of Notes,
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
-20-
303 of the Indenture.
C. The Trustee will assign a CUSIP Number to
the Book-Entry Note and will telephone and
advise the Company and the applicable Agent
of such CUSIP Number. The Trustee will
communicate to DTC and the applicable Agent
through DTC's Participant Terminal System a
pending deposit message specifying the
following settlement information:
1. The information set forth in
Settlement Procedure A.
2. Identification numbers of the
participant accounts maintained by
DTC on behalf of the Trustee and
the applicable Agent.
3. Identification as a Fixed Rate
Book-Entry Note or Floating Rate
Book-Entry Note.
4. Initial Interest Payment Date for
such Note, number of days by which
such date succeeds the related
record date for DTC purposes (which
in the case of Floating Rate Notes
that reset daily or weekly will be
the date five calendar days
immediately preceding the
applicable Interest Payment Date
and in the case of all other
Book-Entry Notes will be the
Regular Record Date, as defined in
the Notes) and, if then calculable,
the amount of interest payment
on such Interest Payment Date
(which amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Book-Entry Note
representing such Note.
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.
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E. The Trustee will complete and authenticate
the Book-Entry Note.
F. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to
the Trustee's participant account and credit
such Note to the participant account of the
applicable Agent maintained by DTC and (ii)
to debit the settlement account of the
applicable Agent and credit the settlement
account of the Trustee maintained by DTC, in
an amount equal to the price of such Note
less the applicable Agent's commission. Any
entry of such a deliver order shall be
deemed to constitute a representation and
warranty by the Trustee to DTC that (i) the
Book-Entry Note has been issued and
authenticated and (ii) the Trustee is
holding such Book-Entry Note pursuant to the
Certificate Agreement between the Trustee
and DTC.
H. The applicable Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Note to the applicable Agent's
participant account and credit such Note to
the participant accounts of the appropriate
Participants maintained by DTC and (ii) to
debit the settlement accounts of such
Participants and credit the settlement
account of the applicable Agent maintained
by DTC, in an amount equal 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
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available for immediate use in the amount
transferred to the Trustee in accordance
with Settlement Procedure G.
K. The Trustee will send a copy of the
Book-Entry Note stamped "SPECIMEN" on each
page to the Company together with a
statement setting forth the principal amount
of Notes Outstanding as of the related
Settlement Date after giving effect to such
transaction and all other offers to purchase
Notes of which the Company has advised the
Trustee but which have not been settled.
L. The applicable Agent will confirm the
purchase of such Note to the purchaser
either by transmitting to the Participant
with respect to such Note a confirmation
order through DTC's Participant Terminal
System or by mailing a written confirmation
to such purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the Company,
Settlement Procedures "A" through "L" set forth above
shall be completed as soon as possible but not later
than the respective times (New York City time) set
forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade date
B 12:00 noon on the trade date
C 2:00 p.m. on the trade date
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
-23-
after the trade date, Settlement Procedures A, B, and
C may, if necessary, be completed at any time prior
to the specified times on the first Business Day
after such trade date. In connection with a sale
which is to be settled more than one Business Day
after the trade date, if the initial interest rate
for a Floating Rate Note is not known at the time
that Settlement Procedure A is completed, Settlement
Procedures B and C shall be completed as soon as such
rate has been determined, but no later than 11:00
a.m. and 2:00 p.m., New York City time, respectively,
on the second Business Day before the Settlement
Date. Settlement Procedure I is subject to extension
in accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the Settlement
Date.
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Company shall notify the Trustee and
the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message
to such effect by no later than 2:00 p.m., New York
City time, on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle: If the Trustee has not entered an SDFS deliver order
with respect to a Book-Entry Note pursuant to
Settlement Procedure G, then upon written request
(which may be evidenced by facsimile transmission) of
the Company, the Trustee shall deliver to DTC,
through DTC's Participant Terminal System, as soon as
practicable a withdrawal message 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
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cancelled Book-Entry Note to the Company. The CUSIP
number assigned to such Book-Entry Note shall, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned. If
withdrawal messages are processed with respect to a
portion of the Notes represented by a Book-Entry
Note, the Trustee will exchange such Book-Entry Note
for two Book-Entry Notes, one of which shall
represent the Book-Entry Notes for which withdrawal
messages are processed and shall be cancelled
immediately after issuance, and the other of which
shall represent the other Notes previously
represented by the surrendered Book-Entry Note and
shall bear the CUSIP number of the surrendered
Book-Entry Note.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the applicable Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing Settlement Procedures G and
H, respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the related actions
described in the preceding paragraph. If such failure
shall have occurred for any reason other than default
by the applicable Agent to perform its obligations
hereunder or under the Distribution Agreement, the
Company will reimburse the applicable Agent on an
equitable basis for its loss of the use of funds
during the period when the funds were credited to the
account of the Company.
-25-
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event of
a failure to settle with respect to a Note that was
to have been represented by a Book-Entry Note also
representing other Notes, the Trustee will provide,
in accordance with Settlement Procedures D and E, for
the authentication and issuance of a Book-Entry Note
representing such remaining Notes and will make
appropriate entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Certificated Notes, other than Indexed Notes and
Multi-Currency Notes, will be issued in denominations
of a minimum of $1,000 and integral multiples of
$1,000. Indexed Notes or Multi-Currency Notes will be
issued in the denominations specified in the related
Multi-Currency or Indexed Note Prospectus Supplement
and Pricing Supplement.
Interest: Each Certificated Note will bear interest in
accordance with its terms. Interest will begin to
accrue on the Original Issue Date of a Certificated
Note for the first Interest Payment Period and on the
most recent Interest Payment Date to which interest
has been paid for all subsequent Interest Payment
Periods. Each payment of interest shall include
interest accrued to, but excluding, the date of such
payment. Unless otherwise specified in the applicable
Pricing Supplement, interest payments in respect of
Fixed Rate Certificated Notes will be made
semiannually on June 15 and December 15 of each year
and at Maturity. However, the first payment of
interest on any Certificated Note issued between a
Regular Record Date and an Interest 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
-26-
Rate Certificated Note shall be the June 1 or
December 1 (whether or not a Business Day) preceding
such Interest Payment Date. Interest at Maturity will
be payable to the person to whom the principal is
payable.
Except as provided in Part I under "Calculation of
Interest" and unless otherwise specified in the
applicable Pricing Supplement, the Interest Payment
Date for a Floating Rate Certificated Note will be,
in the case of Floating Rate Notes which reset daily,
weekly or monthly, on the third Wednesday of each
month or on the third Wednesday of March, June,
September and December of each year as specified in
the applicable Pricing Supplement; in the case of
Floating Rate Notes which reset quarterly, on the
third Wednesday of March, June, September and
December of each year; in the case of Floating Rate
Notes which reset semiannually, on the third
Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and in the case of
Floating Rate Notes which reset annually, on the
third Wednesday of the month specified in the
applicable Pricing Supplement; and, in each case, at
Maturity. Unless otherwise specified in the
applicable Pricing Supplement, the Regular Record
Date with respect to a Floating Rate Note shall be
the date 15 calendar days (whether or not a Business
Day) preceding an Interest Payment Date.
Payments of Principal
and Interest: Upon presentment and delivery of the Certificated
Note, the Trustee or the Company's duly authorized
agent will pay the principal amount of each
Certificated Note at Maturity and the final
installment of interest in next day funds. All
interest payments in U.S. dollars on a Certificated
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
-27-
million dollars or more in aggregate principal amount
of the same series of Certificated Notes (whether
having identical or different terms and provisions)
shall be entitled to receive payments of interest,
other than at Maturity, by wire transfer of
immediately available funds if appropriate wire
transfer instructions have been received in writing
by the Trustee or such agent not less than 16 days
prior to the applicable Interest Payment Date.
For special provisions relating to Multi-Currency
Notes or Indexed Notes, see the related
Multi-Currency or Indexed Note Prospectus Supplement.
The Trustee will provide monthly to the Company a
list of the principal and interest in each currency
to be paid on Certificated Notes maturing in the next
succeeding month. Such Trustee or agent will be
responsible for withholding taxes on interest paid as
required by applicable law, but shall be relieved
from any such responsibility if it acts in good faith
and in reliance upon an opinion of counsel.
Certificated Notes presented to the Trustee or the
Company's duly authorized agent at Maturity for
payment will be cancelled by such Trustee or agent.
All cancelled Certificated Notes held by such Trustee
or agent shall be destroyed, and the Trustee or agent
shall furnish to the Company a certificate with
respect to such destruction.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note purchased through the Agents, as
agents, shall be as follows:
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
-28-
and payments of principal, premium,
if any, and interest.
3. Taxpayer identification number of
the Registered Owner.
4. Principal amount of the
Certificated Note.
5. Denomination of the Certificated
Note.
6. Fixed Rate Notes:
(a) interest rate;
(b) Regular Record Dates; and
(c) Interest Payment Dates.
Floating Rate Notes:
(a) interest rate basis or
bases;
(b) index maturity;
(c) spread or spread
multiplier, if any;
(d) initial interest rate;
(e) maximum interest rate, if
any;
(f) minimum interest rate, if
any;
(g) interest reset dates;
(h) interest determination
dates;
(i) interest payment dates; and
(j) calculation agent.
Multi-Currency or Indexed Notes:
(a) specified currency;
(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.
-29-
11. Redemption provisions, if any:
(a) Redemption Commencement
Date
(b) initial redemption
percentage
(c) annual redemption
percentage reduction
12. Repayment Date(s), if any.
13. Net proceeds to the Company.
14. Agent's commission.
B. The Company shall provide to the Trustee by
telecopy or other method acceptable to the
Trustee the above Settlement information
with respect to each Certificated Note
received from the Agents and the name of the
applicable Agent and shall confirm to the
Trustee that the principal amount of Notes,
including such Certificated Note, issued as
of the relevant Settlement Date shall not
exceed the limit with respect to the
principal amount of Notes specified in the
most recent Company Order delivered to the
Trustee pursuant to Section 303 of the
Indenture. The Company also shall cause the
Trustee or its duly appointed agent to
issue, authenticate and deliver Certificated
Notes in accordance with the Settlement
Procedures Timetable set forth below. The
Company also shall provide to the Trustee
and the applicable Agent a copy of the
applicable Pricing Supplement. The Company
also shall provide to the Trustee and the
applicable Agent a copy of a Multi-Currency
or Indexed Note Prospectus Supplement, if
applicable.
C. The Trustee or its duly appointed agent will
complete and authenticate the Certificated
Note, including the Guarantee, in form
approved by the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Note and one
photocopy thereof stamped "SPECIMEN" on each
page to the applicable Agent at the
-30-
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
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,
including the related Guarantee, has been authorized,
delivered and completed as aforementioned, the
applicable Agent will wire the net proceeds of the
Certificated Note after deduction of its applicable
commission to the Company pursuant to standard wire
instructions given by the Company.
-31-
E. The applicable Agent will deliver the
Certificated Note, the related Guarantee
endorsed thereon, as well as a copy of the
Prospectus and any applicable Pricing
Supplement or Supplements received from the
Trustee, to the purchaser against payment in
immediately available funds.
F. The Trustee will send a photocopy of the
Certificated Note stamped "SPECIMEN" on each
page to the Company.
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 follow-
-32-