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EXHIBIT 10(a)
POPULAR, INC.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(DATED AS OF MAY 23, 1997)
Medium-Term Notes (collectively, the "Notes") in the aggregate
principal amount of up to $1,000,000,000 are to be offered on a continuous basis
by Popular, Inc. (the "Company") through Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Credit Suisse First
Boston Corporation ("Credit Suisse First Boston"), Chase Securities Inc. ("Chase
Securities") and First Chicago Capital Markets, Inc. ("First Chicago") 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 between
the Company and the Agents, dated May 23, 1997 (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 (together, the "Indenture") each between the Company and The First National
Bank of Chicago, 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 most recent base Prospectus included
in the Registration Statement, 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 appropriate 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
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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 nor more
than thirty years 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.
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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 each Agent 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 currency are herein referred to
as "Indexed Notes."
Denominations: The Notes will be issued in denominations
of $1,000 and integral multiples thereof.
Any Notes denominated other than in U.S.
dollars will be issuable in denominations
as set forth in the relevant Multi-Currency
and Indexed Note Prospectus Supplement. For
special provisions relating to
Multi-Currency Notes and Indexed Notes, see
the related Multi-Currency and Indexed Note
Supplement.
Registration: Notes will be issued only in fully
registered form.
Redemption/Repayment: The Notes will be subject to repayment at
the option of the Holders thereof in
accordance with the
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terms of the Notes on their respective
Optional Repayment Dates, if any. Optional
Repayment Dates, if any, will be fixed at
the time of sale and set forth in the
applicable Pricing Supplement and in the
applicable Note. If no Optional 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
Initial Redemption Dates, if any. Initial
Redemption Dates, if any, will be fixed at
the time of sale and set forth in the
applicable Pricing Supplement and in the
applicable Note. If no Initial Redemption
Dates are indicated with respect to a Note,
such Note will not be redeemable prior to
Maturity.
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 for which interest will
be calculated on the basis of the actual
number of days in the interest
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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 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 and Indexed Notes, see
the related Multi-
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Currency and 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 (the "Presenting Agent"), 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 Act. 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
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Prospectus Supplement to which the Pricing
Supplement relates;
4. the Price to Public (but only if
(a) the trade is being made on an agency
basis and (b) such Price to Public is other
than 100%);
5. Net Proceeds to the Company
(but only if (a) the trade is being made on
a principal basis and (b) the Net Proceeds
to the Company is other than 100%), less
what would have been the applicable agency
commission;
6. the information with respect to
the terms of the Notes set forth below
(whether or not the applicable Note is a
Book-Entry Note) under "Procedures for Notes
Issued in Book-Entry Form -- Settlement
Procedures", items 2, 3, 7, 8 and 9; and
7. any other terms of the Notes not
otherwise specified in the Prospectus or
Prospectus Supplement.
One copy of such filed document will be sent
by telecopy or over night express (for
delivery not later than 11:00 A.M. on the
Business Day next following the trade date)
to the applicable Presenting Agent at the
following addresses:
To Merrill Lynch:
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If by overnight, express or special
delivery:
Merrill Lynch & Co., Tritech
Services, 40 Colonial Drive,
Piscataway, New Jersey 08854,
Attention: Prospectus
Operations/Susan Putnam,
If by all other types of
deliveries:
Tritech Services, #4 Corporate
Place, Corporate Park 287,
Piscataway, New Jersey 08854,
Attention: Prospectus
Operations/Nachman Kimerling
Telephone: (908) 885-2769
Telecopy: (908) 885-2774/2775/2776
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation, Five World Trade
Center, New York, New York 10048,
Attention: Joan Bryan, Transaction
Advisory Group
Telephone: (212) 322-5105
Telecopy: (212) 803-4096
To Chase Securities:
Chase Securities, Inc., 270 Park
Avenue, 8th Floor, New York, New
York 10017, Attention: Medium Term
Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0237
Chicago, Illinois 60670
Attention: MTN Operations Manager
Telephone: (317) 732-9631
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The Presenting Agent will cause a stickered
supplemented Prospectus with the trade
confirmation to be delivered to the
purchaser of the Note.
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For record keeping purposes, one copy of
each Pricing Supplement shall also be mailed
or telecopied to each Agent and the Trustee
at the following respective addresses:
To Merrill Lynch:
Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith
Incorporated, World Financial
Center, North Tower, 10th Floor,
New York, New York 10281-1310,
Attention: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation, 55 East 52nd Street,
New York, New York 10055,
Attention: Short and Medium-Term
Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To Chase Securities:
Chase Securities, Inc., 270 Park
Avenue, 8th Floor, New York, New
York 10017, Attention: Medium Term
Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Fax: (312) 732-4172
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To the Trustee:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust
Administration
In each instance that a Pricing Supplement
is prepared, the Presenting 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
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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 the
Presenting Agent as principal, appropriate
settlement details will be set forth in the
applicable Terms Agreement to be entered
into between the Presenting 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 proce-
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dures 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:
To Merrill Lynch:
Product Management MTNs, Merrill
Lynch Money Markets, North Tower,
World Financial Center, 10th Floor,
New York, New York 10281-1310
Telephone: (212) 449-7476
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Telecopy: (212) 449-2234
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation, 55 East 52nd Street,
New York, New York 10055,
Attention: Short and Medium-Term
Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To Chase Securities:
Chase Securities, Inc.
270 Park Avenue, 8th Floor,
New York, New York 10017,
Attention: Medium Term Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Telecopy: (312) 732-4172
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
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settlement of such orders. The Company will
have the sole responsibility for such
decision and for any arrangements which may
be made in the event that the Company
determines that such orders may not be
settled or that copies of such Prospectus
may not be so delivered.
Delivery of Prospectus:
A copy of the most recent Prospectus and
Pricing Supplement must accompany or precede
the earlier of (a) the written confirmation
of a sale sent to a customer or his agent
and (b) the delivery of Notes to a customer
or his agent.
Authenticity of
Signatures: The Agents will have no obligation or
liability to the Company or the Trustee in
respect of the authenticity of the
signature of any officer, employee or agent
of the Company or the Trustee on any Note or
related Guarantee.
Documents Incorporated
by Reference: The Company shall supply each Agent with an
adequate supply of all documents
incorporated by reference in the
Registration Statement.
Business Day: "Business Day" means any day other than a
Saturday, Sunday, or other day on which
banks in The City of New York (and, with
respect to LIBOR Notes, the City of London)
are authorized or obligated by law or
executive order to close. For the definition
of "Business Day" with respect to
Multi-Currency Notes or Indexed Notes, see
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 Trustee to DTC, dated May [22], 1997, and a Medium-Term Note
Certificate Agreement between the Trustee 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 Eleventh District Cost
of Funds Rate, 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,
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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 Payment Date (or, in the
case of Floating Rate Notes with interest
rates which reset daily or weekly, the day
following the most recent Record 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 &
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Poor's Corporation ("Standard & Poor's") 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 $200,000,000
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
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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
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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
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.
Not withstanding the foregoing, if the
Book-Entry Notes to be exchanged
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exceed $200,000,000 in aggregate principal
amount, one replacement Book-Entry Note will
be authenticated and issued to represent
each $200,000,000 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 $1,000 and integral
multiples thereof. Book-Entry Notes will be
denominated in principal amounts not in
excess of $200,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of $200,000,000
would, but for the preceding sentence, be
represented by a single Book-Entry Note,
then one Book-Entry Note will be issued to
represent each $200,000,000 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
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interest on a Book-Entry Note will include
interest accrued through the day preceding,
as the case may be, the Interest Payment
Date (provided that in the case of Floating
Rate Notes with interest rates which reset
daily or weekly interest payments will
include interest accrued to and including
the Regular Record Date immediately
preceding the Interest Payment Date), the
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
Standard & Poor's Corporation ("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.
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Fixed Rate Notes. 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", 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
semi-annually, on the third Wednesday of the
two months of each year specified in the
applicable Pricing Supplement; or, in the
case of Eleventh District Cost of Funds Rate
Notes, on the first Business Day of each
month or the first Business Day of each
March, June, September or December as
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.
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Regular Record Dates. The Regular Record
Date with respect to any Interest Payment
Date for a Fixed Rate Note shall be the May
31 or November 30 preceding such Interest
Payment Date. 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 coin-
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ciding with Maturity) and the total of such
amounts. DTC will confirm the amount payable
on each Book-Entry Note on such Interest
Payment Date by reference to the daily bond
reports published by Standard & Poor's. On
such Interest Payment Date, the Company will
pay to the Trustee, and the Trustee in turn
will pay to DTC, such total amount of
interest due (other than at Maturity), at
the times and in the manner set forth below
under "Manner of Payment."
Payments at Maturity. On or about the first
Business Day of each month, the Trustee will
deliver to the Company and DTC a written
list of principal, interest and premium, if
any, to be paid on each Book-Entry Note
issued under the Indenture having a Maturity
in the following month. The Trustee and DTC
will confirm the amounts of such principal,
premium and interest payments with respect
to a Book-Entry Note on or about the fifth
Business Day preceding the Maturity of such
Book-Entry Note. At such maturity, the
Company will pay to the Trustee, and the
Trustee in turn will pay to DTC, the
principal amount of such Note, together with
interest and premium, if any, due at such
Maturity, at the times and in the manner set
forth below under "Manner of Payment."
Promptly after payment to DTC of the
principal, interest and premium, if any, due
at the Maturity of such Book-Entry Note,
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26
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 (together
with interest and premium, if any) due on a
Book-Entry Note on such date. There after
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
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DTC. Neither the Company nor the Trustee shall have
any responsibility or liability for the payment by
DTC of the principal of, or interest on, the
Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a 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 Presenting 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
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28
Floating Rate Notes:
(a) interest rate basis;
(b) initial interest rate;
(c) spread and/or spread
multiplier, if any;
(d) initial interest reset
dates;
(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest rate, if
any;
(j) minimum interest rate, if
any;
(k) alternate rate event
spread; and
(l) interest rate reset
dates.
5. Price to public of the Note.
6. Trade date.
7. Settlement Date (Original Issue
Date).
8. Stated Maturity.
9. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption
Percentage
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(c) Annual Redemption
Percentage Reduction
10. Optional Repayment Date(s), if any.
11. Net proceeds to the Company.
12. Presenting 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
Presenting 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 Presenting Agent
of such CUSIP Number. The Trustee will
communicate to DTC and the Presenting Agent
through DTC's Participant Terminal System a
pending deposit message
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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 Presenting 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 (or,
in the case of Floating Rate Notes
which reset daily or weekly, the
date five calendar days preceding
the Interest Payment Date) 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
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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 Agents 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
Presenting Agent maintained by DTC and (ii)
to debit the settlement account of the
Presenting Agent and credit the settlement
account of the Trustee maintained by DTC, in
an amount equal to the price of such Note
less the Presenting 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
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and (ii) the Trustee is holding such
Book-Entry Note pursuant to the Certificate
Agreement between the Trustee and DTC.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Note to the Presenting Agent's
participant account and credit such Note to
the participant account of the Participants
maintained by DTC and (ii) to debit the
settlement accounts of such Participants and
credit the settlement account of the
Presenting Agent maintained by DTC, in an
amount equal to the initial public offering
price of such Note.
I. Transfers of funds in accordance with SDFS
delivery 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 to the
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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 Presenting Agent will confirm the
purchase of such Note to the purchaser
either by transmitting to the Participant
with respect to such Note a confirmation
order through DTC's Participant Terminal
System or by mailing a written confirmation
to such purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the Company,
Settlement Procedures "A" through "L" set forth above
shall be completed as soon as possible but not later
than the respective times (New York City time) set
forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the
trade date
B 12:00 noon on the
trade date
C 2:00 p.m. on the
trade date
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D 3:00 p.m. on the
Business Day before
Settlement Date
E 9:00 a.m. on
Settlement Date
F 10:00 a.m. on
Settlement Date
G-H No later than 2:00
p.m. on Settlement
Date
I 4:45 p.m. on
Settlement Date
J-L 5:00 p.m. on
Settlement Date]
If a sale is to be settled more than one Business Day
after the trade date, Settlement Procedures A, B, and
C may, if necessary, be completed at any time prior
to the specified times on the first Business Day
after such trade date. In connection with a sale
which is to be settled more than one Business Day
after the trade date, if the initial interest rate
for a Floating Rate Note is not known at the time
that Settlement Procedure A is completed, Settlement
Procedures B and C shall be completed as soon as such
rates have 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.
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35
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
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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 Presenting 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 Presenting Agent to perform its obligations
hereunder or under the Distribution Agreement, the
Company will reimburse the Presenting Agent
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37
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.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Certificated Notes, other than Index
Notes and Multi-Currency Notes, will
be issued in denominations of $1,000
and integral multiples thereof. Index Notes
and Multi-Currency Notes will be issued in
the denominations specified in a related
Multi-Currency and Indexed Note Prospectus
Supplement and Pricing Supplement.
Interest: Each Certificated Note will bear interest in
accordance with its terms. Interest will begin to
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38
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. Interest payments in respect of Fixed Rate
Certificated Notes will be made semi-annually on
June 15 and December 15 of each year and at Maturity.
How ever, 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. The Regular Record Date with
respect to any Interest Payment Date for a Fixed Rate
Certificated Note shall be the May 31 or November 30
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", 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
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39
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; or, in the case of Eleventh
District Cost of Funds Rate Notes, on the first
Business Day of each month or the first Business Day
of each March, June, September or December as
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. 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.
Notwithstanding the above, in the case of Floating
Rate Certificated Notes having interest rates which
reset daily or weekly, interest payments shall
include accrued interest from, and including, the
date of issue or from, but excluding, the last date
in respect of which interest has been accrued and
paid, as the case may be, through, and including, the
Regular Record Date, except that at Maturity the
interest payable will include interest accrued to,
but excluding, the date of Maturity. For additional
special provisions relating
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40
to Floating Rate Certificated Notes, see the
Prospectus Supplement.
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 immediately available
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 appropriate Trustee or such agent not less
than 16 days prior to the applicable Interest Payment
Date.
For special provisions relating to Multi-Currency
Notes and Indexed Notes, see the related
Multi-Cur-
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41
rency and 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
shall be destroyed, and the Trustee 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").
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42
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
Floating Rate Notes:
(a) interest rate basis
or bases;
(b) initial interest rate;
(c) spread or spread
multiplier, if any;
(d) initial interest reset
date;
(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest
rates, if any;
(j) minimum interest
rate, if any;
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43
(k) alternate rate event
spread; and
(l) interest determination
dates
Indexed Notes:
(a) specified currency;
(b) indexed currency;
and
(c) base rate of
exchange.
8. Currency or currency unit in which
the Certificated Note is to be
denominated.
9. Price to public of the Certificated
Note.
10. Settlement Date (Original Issue
Date).
11. Stated Maturity.
12. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption
Percentage
(c) Annual Redemption
Percentage Reduction
13. Optional Repayment Date(s), if any.
14. Net proceeds to the Company.
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44
15. Presenting 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, the name of the
Presenting 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 Presenting Agent a copy of the
applicable Pricing Supplement. The Company
also shall provide to the Trustee and the
Presenting Agent a copy of a Multi-Currency
and Indexed Note Supplement, if applicable.
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45
C. The Trustee or its duly appointed agent will
complete and authenticate the Certificated
Notes, including the Guarantee, in forms
approved by the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Notes and one
photocopy thereof to the applicable
Presenting Agent at the following addresses:
Merrill Lynch & Co., Money
Markets Clearance, 55 Water
Street, 3rd Floor, N.S.C.C.
Window, New York, New York
10041, Attention: Al Mitchell
Telephone: (212) 558-2405
Telecopy: (212) 558-2457
Credit Suisse First Boston
Corporation, Five World Trade
Center, New York, New York
10048, Attention: Paul Riley
Chase Securities, Inc.,
55 Water Street
Room 226
Window 17 and 18
New York, New York 10011
Telephone: (212) 638-6787
Telecopy: (212) 638-5618
First Chicago Capital Markets,
Inc.
c/o Bankers Trust, 16 Wall
Street, 5th Floor, Window 51,
New York, New York, 10015,
Attention: Jim Murray
Telephone: (212) 618-2370
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46
The Trustee will keep Stub 1. The Presenting
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 Presenting 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 Presenting 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
Certified Note to the Company.
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47
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 Presenting Agent will
forthwith notify the Trustee and the Company by
telephone, confirmed in writing, and return the
Certificated Note to such Trustee.
The Trustee or the Company's duly authorized agent,
upon receipt of the Certificated Note from the
Presenting Agent, will immediately advise the
Company, and the Company will promptly arrange to
credit the account of the Presenting Agent in an
amount of immediately available funds equal to the
amount
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48
previously paid by the Presenting 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 Presenting Agent to perform its obligations
hereunder or under the Distribution Agreement, the
Company will reimburse the Presenting 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 in
writing the Company.
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