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EXHIBIT 10(b)
POPULAR NORTH AMERICA, 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 North America, 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 among
the Company, Popular, Inc. (the "Guarantor") and the Agents, dated May 23, 1997
(the "Distribution Agreement"). The Notes will be unconditionally guaranteed
as to payment of principal, premium, if any, and interest by the Guarantor (the
"Guarantees"). The Notes and related Guarantees 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, and the Second
Supplemental Indenture, dated as of May 8, 1997 (together, the "Indenture"),
each among the Company, the Guarantor and The First National Bank of Chicago,
as trustee (the "Trustee"), and as Successor Trustee to Citibank, N.A. A
Registration Statement (the "Registration Statement", which term shall include
any additional registration statements filed in connection with the Notes and
related Guarantees as provided in the Distribution Agreement) with respect to
the Notes and related Guarantees 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 and related Guarantees, 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-
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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 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.
Currencies: Each Note shall be denominated in one of the
currencies or currency units, as specified in the
relevant
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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 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.
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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 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
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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-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:
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1. the name of the Company and the
Guarantor;
2. the title of the securities, including
series designation, if any;
3. the date of the Pricing Supplement and
the date of the Prospectus Supplement to which the
Pricing Supplement relates;
4. the Price to Public (but only if (a) the
trade is being made on an agency basis and (b) such
Price to Public is other than 100%);
5. Net Proceeds to the Company (but only if
(a) the trade is being made on a principal basis and
(b) the Net Proceeds to the Company is other than
100%), less what would have been the applicable
agency commission;
6. the information with respect to the
terms of the Notes set forth below (whether or not
the applicable Note is a Book-Entry Note) under
"Procedures for Notes Issued in Book-Entry Form --
Settlement Procedures", items 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, Final Prospectus
Unit
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 10055,
Attention: Joan Bryan
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
The Presenting 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
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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
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
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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, including the related
Guarantee, 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 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
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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 and the Guarantor decide 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), they 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
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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
Lynch Money Markets, North Tower,
World Financial Center, 10th Floor,
New York, New York 10281-1310
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To 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
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 which have not been settled, the
Company will promptly advise the Agents and the
Trustee
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whether such offers may be settled and whether
copies of the Prospectus as theretofore amended
and/or supplemented as in effect at the time of the
suspension may be delivered in connection with the
settlement of such orders. The Company will have the
sole responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such orders may not be
settled or that copies of such Prospectus may not be
so delivered.
Delivery of Prospectus: A copy of the most recent Prospectus and Pricing
Supplement must accompany or precede the earlier of
(a) the written confirmation of a sale sent to a
customer or his agent and (b) the delivery of Notes
to a customer or his agent.
Authenticity of
Signatures: The Agents will have no obligation or liability to
the Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company, the Guarantor or
the Trustee on any Note or related Guarantee.
Documents Incorporated
by Reference: The Company and the Guarantor 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, the Guarantor 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, 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
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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 &
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
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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
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.
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Transfers: Transfers of beneficial interests in a Book-Entry
Note will be accomplished by book entries made by
DTC and, in turn, by Participants (and in certain
cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and
transferees of such Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice specifying (a)
the CUSIP numbers of two or more Book-Entry Notes
Outstanding on such date that represent Book-Entry
Notes having the same Fixed Rate Terms or Floating
Rate Terms, as the case may be, other than Original
Issue Dates, and for which interest has been paid to
the same date; (b) a date, occurring at least 30
days after such written notice is delivered and at
least 30 days before the next Interest Payment Date
for the related Book-Entry Notes, on which such
Book-Entry Notes shall be exchanged for a single
replacement Book-Entry Note; and (c) a new CUSIP
number to be assigned to such replacement Book-Entry
Note. Upon receipt of such a notice, DTC will send
to its Participants (including the Trustee) a
written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau written notice setting
forth such exchange date and the new CUSIP number
and stating that, as of such exchange date, the
CUSIP numbers of the Book-Entry Notes to be
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
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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 $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 interest on a Book-Entry Note will
include interest accrued through the day preceding,
as the case may
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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.
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
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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; 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.
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
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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 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."
ments 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
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Maturity of such Book-Entry Note. At such maturity,
the Company will pay to the Trustee, and the Trustee
in turn will pay to DTC, the principal amount of
such Note, together with interest and premium, if
any, due at such Maturity, at the times and in the
manner set forth below under "Manner of Payment."
Promptly after payment to DTC of the principal,
interest and premium, if any, due at the Maturity of
such Book-Entry Note, the Trustee will cancel and
destroy such Book-Entry Note and deliver to the
Company a certificate of destruction therefor.
Manner of Payment. The total amount of any
principal, premium, if any, and interest due on
Book-Entry Notes on any Interest Payment Date or at
Maturity shall be paid by the Company to the Trustee
in funds available for use as of 9:30 a.m., New York
City time, on such date. The Company will make such
payment on such Book-Entry Notes by instructing the
Trustee to withdraw funds from an account maintained
by the Company with the Trustee. The Company will
confirm such instructions in writing to the Trustee.
Prior to 10:00 a.m., New York City time, on such
date or as soon as possible thereafter, the Trustee
will pay by separate wire transfer (using Fedwire
message entry instructions in a form previously
specified by DTC) to an account at the Federal
Reserve Bank of New York previously specified by
DTC, in funds available for immediate use by DTC,
each payment of principal (together with interest
and premium, if any) 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
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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 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
Floating Rate Notes:
(a) interest rate basis;
(b) initial interest rate;
(c) spread and/or spread
multiplier, if any;
(d) initial interest reset dates;
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(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
(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
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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 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
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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 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
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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 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 Company together
with a statement setting forth the
principal amount of Notes Outstanding as of
the related
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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
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]
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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.
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
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such Note to the participant account of the Trustee
maintained at DTC. DTC will process the withdrawal
message, provided that such participant account
contains a principal amount of the Book-Entry Note
representing such Note that is at least equal to the
principal amount to be debited. If withdrawal
messages are processed with respect to all the Notes
represented by a Book-Entry Note, the Trustee will
mark such Book-Entry Note "cancelled", make
appropriate entries in its records and send such
cancelled Book-Entry Note to the Company. The CUSIP
number assigned to such Book-Entry Note shall, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned. If
withdrawal messages are processed with respect to a
portion of the Notes represented by a Book-Entry
Note, the Trustee will exchange such Book-Entry Note
for two Book-Entry Notes, one of which shall
represent the Book-Entry Notes for which withdrawal
messages are processed and shall be cancelled
immediately after issuance, and the other of which
shall represent the other Notes previously
represented by the surrendered Book-Entry Note and
shall bear the CUSIP number of the surrendered
Book-Entry Note.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing Settlement Procedures G
and H, respectively. Thereafter,
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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 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.
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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. 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. 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
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
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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 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
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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-Currency 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
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Company a certificate with respect to such
destruction.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note purchased through the Agents, as
agents, shall be as follows:
A. Each Agent will advise the Company by
telephone of the following Settlement
information with regard to each
Certificated Note:
1. Exact name in which the
Certificated Note is to be
registered (the "Registered
Owner").
2. Exact address or addresses of the
Registered Owner for delivery,
notices and payments of principal,
premium, if any, and interest.
3. Taxpayer identification number of
the Registered Owner.
4. Principal amount of the
Certificated Note.
5. Denomination of the Certificated
Note.
6. Fixed Rate Notes:
(a) interest rate
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;
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(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;
(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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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.
C. The Trustee or its duly appointed agent
will complete and authenticate the
Certificated Notes, including the
Guarantee, in forms approved by the Company
and the Guarantor, as the case may be.
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37
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 Market
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.
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
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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.
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
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39
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 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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