EXHIBIT 1.1
Execution Copy
EL PASO ENERGY CORPORATION
Medium Term Notes
Due Nine Months or More
from Date Issued
RESTATED DISTRIBUTION AGREEMENT
October 5, 2000
Banc of America Securities LLC
NC1-007-07-01
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
ABN AMRO Incorporated
1325 Avenue of the Americas, 10th Floor
New York, New York 10019
Chase Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017-2070
Dear Sirs and Mesdames:
El Paso Energy Corporation, a Delaware corporation (the
"Company"), confirms its agreement with each of you (each an
"Agent" and collectively the "Agents") with respect to the issue
and sale by the Company of its Medium Term Notes (the "Notes")
having an aggregate initial offering price of up to $600,000,000
(or the equivalent thereof if any of the Notes are denominated in
one or more foreign currencies or foreign composite currency
units). The Notes will constitute a part of a series of senior
debt securities, unlimited as to aggregate principal amount, to
be issued under the Indenture, dated as of May 10, 1999 (the
"Indenture"), between the Company and The Chase Manhattan Bank,
as trustee (the "Trustee"), relating to the Notes, as
supplemented from time to time. It is understood, however, that
the Company may from time to time authorize the issuance of
additional Notes and that such additional Notes may be sold to or
through the Agents pursuant to the terms of this Agreement, all
as though the issuance of such Notes were authorized as of the
date hereof. This Agreement supersedes and replaces in its
entirety that certain Distribution Agreement, dated as of
December 3, 1999, among the parties to this Agreement.
Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell
Notes, directly or through an affiliated entity, on its own
behalf at any time and to any person, the Company hereby (i)
appoints each of you as an agent of the Company for the purpose
of soliciting purchases of the Notes from the Company by others
and (ii) agrees that whenever the Company determines to sell
Notes directly to any Agent as principal for resale to others, it
will enter into a separate agreement with such agent (each a
"Terms Agreement"). Each such Terms Agreement, whether oral (and
confirmed in writing, which may be by facsimile transmission) or
in writing, shall be with respect to such information (as
applicable) as specified in Exhibit A hereto, relating to such
sale in accordance with the provisions of Section 2(b) hereof.
Notwithstanding anything to the contrary contained
herein, the Company may accept offers to purchase Notes through
an agent other than an Agent, provided that (i) the Company shall
not have solicited such offers, (ii) the Company and such agent
shall have executed an agreement with respect to such purchases
having terms and conditions (including, without limitation,
commission rates) substantially the same as the terms and
conditions that would apply to such purchases under this
Agreement if such agent were an Agent (which may be accomplished
by incorporating by reference in such agreement the terms and
conditions of this Agreement) and (iii) the Company shall notify
the Agents prior to the execution of any such agreement and shall
provide the Agents with a copy of such agreement promptly
following the execution thereof. Notwithstanding anything to the
contrary in this Agreement, the Company shall not be prohibited
from (i) soliciting offers to purchase Notes directly from
potential investors, or (ii) offering or selling Notes directly
to investors, provided that, in each case any such solicitation,
offer or sale is made without the use of an agent, broker or
underwriter.
1. Representations of the Company. The Company represents
and warrants to, and agrees with, each Agent as of the Closing
Time, as of the date of each acceptance by the Company of an
offer for the purchase of Notes, as of the date of each delivery
of Notes (whether through an Agent as agent or to an Agent as
principal) (the date of delivery to an Agent as principal being
hereinafter referred to as a "Settlement Date"), and as of the
times referred to in Sections 6(a) and 6(b) hereof (each such
time being referred to herein as the "Representation Date"), as
follows:
(a) The Company meets the requirements for the use of
Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act"). A registration statement on Form S-3
(Registration No. 333-86049) in respect of the Notes has been
filed with the Securities and Exchange Commission (the "SEC") in
the form heretofore delivered to you and such registration
statement in such form has been declared effective by the SEC and
no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has
been initiated or, to the Company's knowledge, threatened by the
SEC (such registration statement, including all exhibits thereto
but excluding any Form T-1 thereto, as amended at the time such
registration statement or any part thereof became effective,
being hereinafter called the "Registration Statement;" the base
prospectus relating to the Notes constituting a part of such
registration statement as supplemented by that certain prospectus
supplement, dated as of December 14, 1999 relating to the Notes,
including in each case any documents incorporated by reference
therein as of such filing, being hereinafter called the
"Prospectus;" any reference herein to the Registration Statement
or the Prospectus shall be deemed to include the documents
incorporated by reference therein pursuant to the applicable form
under the Securities Act, as of the date of the Registration
Statement or the Prospectus; any reference to any amendment or
supplement to the Registration Statement or the Prospectus shall
be deemed to refer to and include any documents filed after the
date of the Registration Statement or the Prospectus under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and so incorporated by reference; any reference to the Prospectus
as amended or supplemented shall be deemed to refer to the
Prospectus relating to the Notes as each time amended or
supplemented in the form in which it is filed with the SEC
pursuant to Rule 424 of Regulation C under the Securities Act,
including any pricing supplement thereto and documents
incorporated by reference therein as aforesaid as of the date of
such filing).
(b) The documents incorporated by reference in the
Registration Statement or the Prospectus, when they became
effective or were filed with the SEC, as the case may be,
conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the SEC thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the
Registration Statement or the Prospectus and any amendments or
supplements thereto, when they become effective or are filed with
the SEC, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
SEC thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular
issuance of Notes.
(c) The Registration Statement and the Prospectus
conform, and any amendments or supplements thereto will conform,
when they become effective or are filed with the SEC, as the case
may be, and as of each subsequent Representation Date will
conform, in all material respects to the requirements of the
Securities Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
SEC thereunder and do not and will not as of its effective date
as to the Registration Statement and as of its filing date and as
of each Representation Date as to the Prospectus contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Agent
expressly for use in the Prospectus as amended or supplemented to
relate to a particular issuance of Notes. The Prospectus
delivered to the Agents for use in connection with the offering
of the Notes was identical to the electronically transmitted
copies thereof filed with the SEC pursuant to Rule 424 of the
Securities Act in EDGAR format, except to the extent permitted by
Regulation S-T.
(d) Each of the Company and its significant
subsidiaries within the meaning of Regulation S-X (each
hereinafter referred to as a "significant subsidiary" or
collectively as the "significant subsidiaries") has been duly
formed or incorporated, is validly existing as a
corporation, limited partnership, general partnership or limited
liability company in good standing under the laws of the
jurisdiction in which it is chartered or organized and has the
entity power and authority to carry on its business as described
in the Prospectus and to own, lease and operate its properties,
and each is duly qualified and is in good standing as a foreign
corporation, limited partnership, general partnership or limited
liability company authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing
of property requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on
the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(e) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are
fully paid, non-assessable and not subject to any preemptive or
similar rights.
(f) All of the outstanding shares of capital stock,
limited partner interests, general partner interests or limited
liability company interests of each of the Company's significant
subsidiaries have been duly authorized and validly issued and, in
the case of capital stock, are fully paid and non-assessable
(other than the shares of Series A Preferred Stock of El Paso
Tennessee Pipeline Co. that are listed for trading on the New
York Stock Exchange, Inc. and the Company's interests in Trinity
River Associates, L.L.C. and Clydesdale Associates, L.P.) are
owned by the Company, directly or indirectly through one or more
subsidiaries, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature (each, a
"Lien").
(g) There are no legal or governmental proceedings
pending, other than those referred to or incorporated by
reference in the Prospectus, to which the Company or any of its
subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, other than proceedings
which are not reasonably expected, individually or in the
aggregate, to have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations
of the Company and its subsidiaries taken as a whole; and, to the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(h) The Notes have been duly authorized, and, when
issued and delivered pursuant to this Agreement and any Terms
Agreement and the Indenture, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the
benefits provided by the Indenture; the Indenture has been duly
qualified under the Trust Indenture Act and has been duly
authorized, executed and delivered by the Company and the Trustee
and constitutes a valid and legally binding instrument
enforceable in accordance with its terms except as the same may
be limited by bankruptcy, insolvency, reorganization or other
laws relating to or affecting the enforcement of creditors'
rights or by general principles of equity; and the Indenture
conforms in all material respects to the description thereof in
the Prospectus as originally filed with the Commission, and the
Notes of any series that may be sold by the Company pursuant to
this Agreement will conform in all material respects to the
description thereof in the Prospectus as same is amended or
supplemented in connection with such sale.
(i) Neither the Company nor any significant subsidiary
is (i) in violation of its respective charter or By-laws or (ii)
in default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan agreement,
mortgage, deed of trust, lease or other agreement or instrument
that is material to the Company and its significant subsidiaries,
taken as a whole, to which the Company or any significant
subsidiary is a party or by which the Company or any significant
subsidiary or its respective property is bound.
(j) The issue and sale of the Notes and the compliance
by the Company with all of the provisions of the Notes, the
Indenture, this Agreement and any Terms Agreement will not result
in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of
the Company or any of its subsidiaries pursuant to the terms of
any indenture, loan agreement, mortgage, deed of trust, lease or
other agreement or instrument to which the Company or any of its
significant subsidiaries is a party or by which the Company or
any of its significant subsidiaries may be bound or to which any
of the property or assets of the Company or any of its
significant subsidiaries is subject (except for breaches and
defaults which would not, individually or in the aggregate, be
materially adverse to the Company and its subsidiaries taken as a
whole or materially adverse to the transactions contemplated by
this Agreement), nor will such action result in any violation of
the provisions of the Restated Certificate of Incorporation, as
amended, or the By-Laws, as amended, of the Company or the
governing documents of any of its subsidiaries or any statute or
order, rule or regulation applicable to it, of any court or any
federal, state or other regulatory authority or any other
governmental body having jurisdiction over it; and no consent,
approval, authorization, order, registration or qualification of
or with any court or other such regulatory authority or other
governmental body is required for the issue and sale of the Notes
or the consummation of the other transactions contemplated in
this Agreement or any Terms Agreement except such consents,
approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Notes by the Agents.
(k) This Agreement has been duly authorized, executed
and delivered by the Company.
(l) The consolidated financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly in accordance
with generally accepted accounting principles consistently
applied the consolidated financial position, results of
operations and cash flows of the Company and its subsidiaries on
the basis stated therein at the respective dates or for the
respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; the
supporting schedules, if any, included or incorporated by
reference in the Registration Statement present fairly in
accordance with generally accepted accounting principles the
information required to be stated therein; and the other
financial and statistical information and data set forth or
incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and
records of the Company.
(m) If applicable, the pro forma financial information
set forth or incorporated by reference in the Registration
Statement and the Prospectus (and any supplement or amendment
thereto) are, in all material respects, fairly presented and
prepared on a basis consistent with the historical financial
statements of the Company and its subsidiaries, and give effect
to assumptions used in the preparation thereof which have been
made on a reasonable basis and in good faith.
(n) The Company is not and, after giving effect to the
offering and sale of the Notes and the application of the
proceeds thereof as described in the Prospectus, will not be
(i) an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended, or (ii) a "holding
company" within the meaning of, or subject to regulation under,
the Public Utility Holding Company Act of 1935, as amended, and
the rules and regulations promulgated by the Commission
thereunder.
(o) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule
436(g)(2) under the Securities Act has indicated to the Company
that it is considering (i) the downgrading, suspension or
withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating
assigned to the Company or any securities of the Company or (ii)
any adverse change in the outlook for any rating assigned to the
Company or any securities of the Company.
(p) None of the Company or any of its subsidiaries has
sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus as amended or supplemented any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree that is material to
the Company and its subsidiaries taken as a whole; and since the
date of the latest audited financial statements included or
incorporated by reference in the Prospectus as it may be amended
or supplemented there has not been any material change in the
capital stock or long-term debt of the Company or any material
adverse change in the general affairs or management, or the
consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented.
(q) PricewaterhouseCoopers LLP are independent public
accountants with respect to the Company and its subsidiaries,
and, to the Company's knowledge, Deloitte & Touche LLP are
independent public accountants with respect to The Coastal
Corporation, as required by the Securities Act.
(r) Neither the Company nor any of its subsidiaries
has taken or will take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or
result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Notes.
(s) None of the Company or any of its subsidiaries or
any of their respective affiliates does business with the
government of Cuba or with any person or affiliate located in
Cuba.
Any certificate signed by any officer of the Company
and delivered to any Agent or to counsel for such Agent in
connection with an offering of Notes shall be deemed a
representation and warranty by the Company to you as to the
matters covered thereby.
2. (a) Solicitations as Agent. On the basis of the
representations and warranties herein contained, and subject to
the terms and conditions herein set forth, each Agent agrees, as
agent of the Company, to use its reasonable efforts to solicit
offers to purchase the Notes upon the terms and conditions set
forth in the Prospectus as it may be amended or supplemented.
The Company reserves the right, in its sole discretion,
to suspend, at any time, the solicitation of purchases of the
Notes. Upon receipt of instructions from the Company, each Agent
will forthwith suspend solicitation of purchases from the Company
until such time as the Company has advised it that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, in
the form of a discount, equal to the percentage of the principal
amount of each Note sold by the Company as a result of a
solicitation made by such Agent as set forth in Schedule I
hereto.
As Agent, unless otherwise provided in the Prospectus,
each of you is authorized to solicit orders for the Notes only in
denominations of $1,000 or any amount in excess thereof which is
an integral multiple of $1,000 at a purchase price equal to 100%
of their principal amount. Each Agent shall communicate to the
Company, orally or in writing, each reasonable offer to purchase
Notes received by such Agent. The Company shall have the sole
right to accept offers to purchase the Notes and may reject any
such offer in whole or in part. Each Agent shall have the right
to reject any offer to purchase the Notes received by it in whole
or in part, and any such rejection shall not be deemed a breach
of its agreement contained herein.
(b) Purchases as Principal. Each sale of Notes to any
Agent as principal shall be made in accordance with the terms of
this Agreement and pursuant to a separate agreement which will
provide for the sale of such Notes to, and the purchase and
re-offering thereof by, such Agent. Each such separate
agreement, which may be an oral agreement between such Agent and
the Company, confirmed in writing (which may take the form of an
exchange of any standard form of written telecommunications
between you and the Company) and which shall be with respect to
such information (as applicable) as is specified in Exhibit A
hereto, is herein referred to as a "Terms Agreement." Each Agent
is authorized to utilize a selling or dealer group in connection
with the resale of the Notes purchased. An Agent's commitment to
purchase Notes pursuant to any Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties
of the Company herein contained and shall be subject to the terms
and conditions herein set forth.
(c) Procedures. The terms applicable to any Notes to
be sold pursuant to this Agreement shall be set forth in a
pricing supplement to the Prospectus to be prepared by the
Company in connection with such sale. Administrative procedures
respecting the sale of Notes shall be agreed upon from time to
time by each Agent, the Company and the Trustee (the
"Procedures"). Each Agent, on the one hand, and the Company, on
the other hand, agree to perform the respective duties and
obligations specifically provided to be performed herein and in
the Procedures set forth in Exhibit D hereto.
(d) Delivery. The documents required to be delivered
by Section 5 hereof shall be delivered at the office of the
Company, El Paso Energy Building, 1001 Louisiana Street, Houston,
Texas 77002 on the date hereof, or at such other place and time
as the Agents and the Company may agree upon in writing (the
"Closing Time").
3. Company Covenants. The Company covenants and
agrees with each Agent:
(a) Except to the extent required under the Securities
Act or the Exchange Act or the rules and regulations of the SEC
promulgated thereunder, to make no further amendment or any
supplement to the Registration Statement or Prospectus relating
to the Notes which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after the
Company receives notice thereof, of the receipt of any comments
from the SEC to the Registration Statement or the Prospectus; to
advise you, promptly after the Company receives notice thereof,
of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or of any order
preventing or suspending the use of any prospectus, or of the
suspension of the qualification of the Notes for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes; to give you advance notice
of the Company's intention to file or prepare any additional
registration statements with respect to the registration of
additional Notes; to furnish you with copies of any such
amendment or supplement; to file promptly and to furnish you
simultaneously with copies of all reports and any definitive
proxy or information statements required to be filed by the
Company with the SEC pursuant to Section 13, 14 or 15(d) of the
Exchange Act subsequent to the date hereof and for so long as the
delivery of a prospectus is required in connection with the
offering or sale of the Notes; to advise you, promptly after the
Company receives notice thereof, of the time when any amendment
to the Registration Statement, or any amended Registration
Statement becomes effective.
(b) Prior to any public offering of the Notes, to
cooperate with you and counsel for the Agents in connection with
the registration or qualification of the Notes for offer and sale
by the several Agents and by dealers under the state securities
or Blue Sky laws of such jurisdictions as you may request, to
continue such registration or qualification in effect so long as
required for distribution of the Notes and to file such consents
to service of process or other documents as may be necessary in
order to effect such registration or qualification; provided,
however, that the Company shall not be required in connection
therewith to qualify as a foreign corporation in any jurisdiction
in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or
taxation other than as to matters and transactions taken by the
Company as contemplated herein that relates to the Prospectus,
the Registration Statement, or the offering or sale of the Notes,
in any jurisdiction in which it is not now so subject.
(c) To furnish you with copies of each amendment and
supplement to the Registration Statement and of each Prospectus
as amended or supplemented, as filed pursuant to Rule 424 under
the Securities Act, in such quantities as you may from time to
time reasonably request, and, if the delivery of a Prospectus is
required at any time in connection with the offering or sale of
any of the Notes and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading,
or if for any other reason it shall be necessary to amend or
supplement the Prospectus or to file under the Exchange Act any
document to be incorporated by reference in the Registration
Statement or the Prospectus in order to comply with the
Securities Act, the Exchange Act or the Trust Indenture Act, to
immediately notify you and instruct you to cease the solicitation
of offers to purchase the Notes in your capacity as Agent of the
Company and to cease sales of any Notes you may then own as
principal, and, as soon as practicable, to prepare and furnish
without charge to you as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or
effect such compliance; provided, however, that if on such date
you shall have suspended solicitation of purchases of the Notes
in your capacity as Agent pursuant to a request from the Company,
and shall not then hold any Notes as principal, the Company shall
not be obligated so to amend or supplement the Prospectus until
such time as the Company shall determine that solicitation of
purchases of the Notes should be resumed or shall subsequently
enter into a new Terms Agreement with you.
(d) With respect to each sale of Notes, the Company
will make generally available to the holders of the Note as
promptly as practicable, but not later than 90 days after the
close of the period covered thereby, earnings statements of the
Company and its subsidiaries (in form complying with the
provisions of Rule 158 under the Securities Act) covering a 12-
month period beginning, in each case, not later than the first
day of the Company's fiscal quarter next following the Closing
Time, each Settlement Date and each Representation Date.
(e) During the period beginning on the date of any
Terms Agreement stating that the restrictions of this Section
3(e) shall be applicable and continuing to and including the
earlier of (i) the termination of trading restrictions on the
Notes purchased in accordance with such Terms Agreement, as
notified to the Company by you, and (ii) the Settlement Date with
respect to such Terms Agreement, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company,
other than Notes offered or sold as contemplated herein, which
mature more than nine months after the Settlement Date with
respect to such Terms Agreement (except for commercial paper with
a term of nine months or less in the ordinary course of
business), without your prior written consent.
(f) On or prior to the date on which there shall be
released to the general public preliminary or definitive interim
financial statement information related to the Company with
respect to each of the first three quarters of each fiscal year
or preliminary financial statement information with respect to
any fiscal year, to furnish such information to you, confirmed in
writing, and to cause the Prospectus to be amended or
supplemented to include or incorporate by reference capsule
consolidated financial information with respect to the results of
operations of the Company and its subsidiaries for the period
between the end of the preceding fiscal year and the end of such
quarter or for such fiscal year, as the case may be, and
corresponding information for the comparable period of the
preceding fiscal year, as well as such other information and
explanations as shall be necessary for an understanding of such
amounts or as shall be required by the Securities Act or the
rules and regulations of the Commission thereunder; provided,
however, that if on the date of such release you shall have
suspended solicitation of purchases of the Notes in your capacity
as Agent pursuant to a request from the Company, and shall not
then hold any Notes as principal, the Company shall not be
obligated so to amend or supplement the Prospectus until such
time as the Company shall determine that solicitations of
purchases of the Notes should be resumed or shall subsequently
enter into a new Terms Agreement with you.
(g) On or prior to the date on which there shall be
released to the general public financial information included in
or derived from the audited consolidated financial statements of
the Company and its subsidiaries for the preceding fiscal year,
to cause the Registration Statement and the Prospectus to be
amended, whether by the filing of documents pursuant to the
Exchange Act, the Securities Act or otherwise, to include or
incorporate by reference such audited financial statements and
the report or reports, and consent or consents to such inclusion
or incorporation by reference, of the independent accountants
with respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such
financial statements or as shall be required by the Securities
Act or the rules and regulations of the SEC promulgated
thereunder; provided, however, that if on the date of such
release you shall have suspended solicitation of purchases of the
Notes in your capacity as Agent pursuant to a request from the
Company, and shall not then hold any Notes as principal, the
Company shall not be obligated so to amend or supplement the
Prospectus until such time as the Company shall determine that
solicitation of purchases of the Notes should be resumed or shall
subsequently enter into a new Terms Agreement with you.
4. Expenses. The Company will pay or cause to be
paid all expenses incident to the performance of its obligations
under this Agreement, including: (i) the cost of preparing and
filing the Registration Statement referred to in Section 1(a)
hereof and all amendments thereto, (ii) the cost of preparation,
issuance and delivery of the Notes, (iii) the fees, disbursements
and expenses of the Company's independent public accountants and
counsel and of the Trustee and its counsel, (iv) the costs of
qualification of the Notes under state securities laws in
accordance with the provisions of Section 3(b) hereof, including
filing fees and the fees and disbursements of counsel for the
Agents in connection therewith and in connection with the
preparation of any Blue Sky Memorandum, (v) the cost of printing
and delivering to each Agent in quantities as hereinabove stated
copies of the Registration Statement referred to in Section 1(a)
hereof and all amendments thereto, the Prospectus, any amendment
or supplement to the Prospectus, and the Prospectus as amended or
supplemented, (vi) the cost of printing and delivering to each
Agent copies of the Indenture and any Blue Sky Memorandum, (vii)
any fees charged by rating agencies for the rating of the Notes,
(viii) the fees and expenses, if any, incurred with respect to
any filing with the National Association of Securities Dealers,
Inc., (ix) the cost of the printing or reproducing of this
Agreement and any Terms Agreement and the cost of printing
certificates representing the Notes, (x) the costs and charges of
any transfer agent, registrar, calculation agent, depositary
(including the Depository Trust Company), (xi) in the event of an
offering of Notes in an aggregate principal amount of less than
$100,000,000, the reasonable fees and disbursements of counsel to
the Agents incurred in such offering, and (xii) any reasonable
advertising and other reasonable out-of-pocket expenses of the
Agents incurred with the approval of the Company.
5. Conditions of Agents' Obligations. Each Agent's
obligations to solicit offers to purchase the Notes as Agent of
the Company and to purchase Notes pursuant to any Terms
Agreement, and the obligation of any person who has agreed to
purchase Notes, to make payment for and take delivery of Notes,
shall be subject to the condition that all representations and
warranties and other statements of the Company herein are, at the
date hereof, at the Closing Time and at each Settlement Date and
at each other Representation Date, true and correct in all
material respects, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Registration Statement shall be effective
under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the SEC; and all requests for
additional information on the part of the SEC shall have been
complied with to your reasonable satisfaction.
(b) Locke Liddell & Sapp LLP, counsel for the Agents,
shall have furnished to you at the Closing Time and at each
Settlement Date with respect to any Terms Agreement such opinion
or opinions, dated the Closing Time and such Settlement Date,
respectively, with respect to the incorporation of the Company,
the validity of the Indenture, the Notes, the Registration
Statement, the Prospectus as amended or supplemented, and other
related matters as you may reasonably request, and such counsel
shall have received such documents, certificates and information
as they may reasonably request to enable them to pass upon such
matters.
(c) You shall have received at the Closing Time and at
each Settlement Date with respect to any Terms Agreement (i) an
opinion (satisfactory to you and your counsel), dated the Closing
Time and such Settlement Date, respectively, of Andrews & Kurth
L.L.P., counsel for the company, addressing the matters set forth
on Exhibit B attached hereto, and (ii) an opinion (satisfactory
to you and your counsel), dated the Closing Time and such
Settlement Date, respectively, of the general, or associate or
senior counsel of the Company, addressing the matters set forth
on Exhibit C attached hereto.
(d) At the Closing Time and at the date of each
delivery of the Notes (whether to an Agent as agent or to an
Agent as principal) there shall not have been, since the
respective dates as of which information is given in the
Registration Statement and the Prospectus as amended or
supplemented or since the date of any Terms Agreement, any
material adverse change in the financial condition of the Company
and its subsidiaries, taken as a whole, or in the earnings,
affairs or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, otherwise than as set forth,
contemplated or incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented to the
date of any Terms Agreement or the acceptance by the Company of
the applicable offer for the purchase of Notes, and you shall
have received a certificate of the President or a Vice President
of the Company dated the Closing Time or Settlement Date with
respect to any Terms Agreement so requiring, to the effect (i)
that there has been no such material adverse change, (ii) that
the other representations and warranties of the Company contained
in Section 1 are in all material respects true and correct with
the same force and effect as though expressly made at and as of
the date of such certificate, (iii) that the Company has complied
with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the date of such
certificate, and (iv) that no stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or, to such
person's knowledge, threatened by the Commission.
(e) At the Closing Time and at each Settlement Date
with respect to any Terms Agreement so requiring, the independent
accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall
have furnished to you a letter or letters, dated the Closing Time
or the Settlement Date, as the case may be, in form and substance
satisfactory to you, containing the information and statements of
the type ordinarily included in accountants' "comfort letters"
with respect to such financial information contained or
incorporated by reference in the Registration Statement and the
Prospectus as you may reasonably request.
(f) Your obligations to purchase Notes pursuant to any
Terms Agreement, and the obligation of any person who has agreed
to purchase notes, to make payment for and take delivery of
Notes, will be subject to the following further conditions: (i)
the rating assigned by any nationally recognized statistical
rating organization, as that term is defined by the Commission
for purpose of Rule 436(g) promulgated under the Securities Act,
to any senior debt securities of the Company as of the date of
such Terms Agreement shall not have been lowered since that date
nor shall there have been any public announcement of any review
by any such rating organization of its ratings of any debt
securities of the Company (other than an announcement with
positive implications of a possible upgrading), (ii) there shall
not have come to your attention any facts that would cause you to
believe that the Prospectus, as amended or supplemented at the
time it was required to be delivered to a purchaser of the Notes,
contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not
misleading and (iii) the Company shall not have failed on or
prior to the Closing Time or the applicable Settlement Date to
perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company on or
prior to such date.
(g) If any condition specified in this Section 5 shall
not have been fulfilled, this Agreement and any Terms Agreement
or any other agreement to purchase may be terminated by such
Agent or purchaser by notice to the Company at any time at or
prior to the Closing Time or applicable Settlement Date, and such
termination shall be without liability of any party to any other
party, except that the covenants set forth in Section 3(c)
hereof, the provisions of Section 4 hereof, the indemnity and
contribution agreements set forth in Section 7 hereof, and the
provisions of Sections 8 and 12 hereof shall remain in effect.
(h) Each certificate signed by an officer of the
Company and delivered to the Agents or counsel for the Agents
shall be deemed to be a representation and warranty by the
Company to the Agents as to the matters covered thereby.
6. Additional Covenants of the Company. The Company
covenants and agrees with each Agent that:
(a) Each acceptance by the Company of any offer for
the purchase of Notes (whether through an Agent as agent or to
one or more Agents as principal), and each sale of Notes to you
pursuant to a Terms Agreement, shall be deemed to be an
affirmation that the representations and warranties of the
Company contained in this Agreement and in any certificate
theretofore delivered to you pursuant hereto are true and correct
in all material respects at the time of such acceptance or sale,
as the case may be, and an undertaking that such representations
and warranties will be true and correct in all material respects
at the time of delivery to the purchaser or his agent, or you, of
the Notes relating to such acceptance or sale, as the case may
be, as though made at and as of each such time (and it is
understood that such representations and warranties shall relate
to the Registration Statement and the Prospectus as amended and
supplemented to each such time).
(b) Each time that the Registration Statement or the
Prospectus shall be amended or supplemented or there is filed
with the SEC any document to be incorporated by reference into
the Prospectus (other than by (i) a pricing supplement or by an
amendment or supplement providing solely for a change in the
interest rates of the Notes or a change in the principal amount
of Notes remaining to be sold or similar changes, or (ii) a
Current Report on Form 8-K relating to an event disclosed
pursuant to Item 5 of Form 8-K, unless the Agents shall otherwise
so specify) or, if so indicated in the applicable Terms
Agreement, the Company sells Notes to you pursuant to a Terms
Agreement, the Company shall furnish or cause to be furnished to
you forthwith a certificate in form satisfactory to you to the
effect that the statements contained in the certificates referred
to in Section 5(d) hereof which were last furnished to you are
true and correct at the time of such amendment or supplement or
filing or sale, as the case may be, as though made at and as of
such time (except that such statements shall be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate,
certificates of the same tenor as the certificates referred to in
said Section 5(d), modified as necessary to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificates.
(c) Each time that the Registration Statement or the
Prospectus shall be amended or supplemented or there is filed
with the SEC any document to be incorporated by reference into
the Prospectus (other than by (i) an amendment or supplement
solely providing for a change in the interest rates of the Notes
or a change in the principal amount of Notes remaining to be sold
or similar changes, (ii) a Current Report on Form 8-K relating to
an event disclosed pursuant to Item 5 of Form 8-K, unless the
Agents shall otherwise so specify), or (iii) setting forth or
incorporating by reference financial statements or other
financial information as of and for a fiscal quarter or fiscal
year) or, if so indicated in the applicable Terms Agreement, the
Company sells Notes to you pursuant to a Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to you
and your counsel a written opinion of counsel for the Company, or
other counsel satisfactory to you, dated the date of delivery of
such opinion, in form satisfactory to you, of the same tenor as
the opinions referred to in Section 5(c) hereof but modified, as
necessary, to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of
such opinion or, in lieu of such opinion, counsel last furnishing
such opinion to you shall furnish you with a letter to the effect
that you may rely on such last opinion to the same extent as
though it were dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter
authorizing reliance).
(d) Each time that the Registration Statement or the
Prospectus shall be amended or supplemented to include additional
financial information (other than preliminary financial statement
information) relating to the Company or any of its subsidiaries
or there is filed with the SEC any document incorporated by
reference into the Prospectus which contains additional financial
information or, if so indicated in the applicable Terms
Agreement, the Company sells Notes to you pursuant to a Terms
Agreement, the Company shall cause the independent public
accountants of the Company to furnish you a letter, dated the
date of filing of such amendment, supplement or document with the
Commission, or the date of such sale, as the case may be, in form
satisfactory to you, of the same tenor as the letter referred to
in Section 5(e) hereof but modified to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date
of such letter. If, following the close of a fiscal year,
audited financial statements and other additional financial
information are contained in a Current Report on Form 8-K and the
same information is subsequently contained in a timely filed
Annual Report on Form 10-K, then such letter need only be
furnished at the time such Annual Report on Form 10-K is filed.
7. Indemnification. (a) The Company will indemnify
and hold each Agent harmless against any losses, claims, damages,
liabilities or judgments (collectively, "Damages"), joint or
several, to which such Agent may become subject, under the
Securities Act or otherwise, insofar as such Damages (or actions
in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus or the
Prospectus as amended or supplemented, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Agent for any
legal or other expenses reasonably incurred by such Agent in
connection with investigating or defending any such action or
claim, as such expenses are incurred; provided, however, that the
Company shall not be liable to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the
Prospectus or the Prospectus as amended or supplemented or any
such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Agent
expressly for use therein.
(b) Each Agent will indemnify and hold harmless the
Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any Damages to which the Company
or any of such other persons may become subject, under the
Securities Act or otherwise, insofar as such Damages (or actions
in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus or the
Prospectus as amended or supplemented, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the
Registration Statement, the Prospectus or the Prospectus as
amended or supplemented, or any such amendment or supplement in
reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein;
and will reimburse the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act for any legal or
other expenses reasonably incurred by such person in connection
with investigating or defending any such action or claim, as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement
of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party
under such subsection, notify the indemnifying party in writing
of the commencement thereof; but the failure so to notify the
indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not, except as
provided below, be liable to such indemnified party under such
subsection for any legal expenses, in each case subsequently
incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at
the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing
by the indemnifying party, (ii) the indemnifying party shall have
failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded
parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to
it which are different from or additional to those available to
the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action on
behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action
or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel)
for all indemnified parties and all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be
designated in writing by the Agent(s), in the case of parties
indemnified pursuant to Section 7(a), and by the Company, in the
case of parties indemnified pursuant to Section 7(b). The
indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all Damages by reason
of any settlement of any action (i) effected with its written
consent or (ii) effected without its written consent if the
settlement is entered into more than 30 business days after the
indemnifying party shall have received a request from the
indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply
with such reimbursement request. No indemnifying party shall,
without the prior written consent of the indemnified party,
effect any settlement or compromise of, or consent to the entry
of judgment with respect to, any pending or threatened action in
respect of which the indemnified party is or could have been a
party and indemnity or contribution may be or could have been
sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the
indemnified party.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in this Section 7 is for any reason held to be
unavailable to or insufficient to hold harmless an indemnified
party, although applicable in accordance with its terms, in
respect of any Damages referred to herein, then each indemnifying
party shall contribute to the aggregate amount of such Damages of
the nature contemplated by said indemnification incurred by such
indemnified party, as incurred, (A) in such proportion as is
appropriate to reflect the relative benefits received by the
Company, on the one hand, and the applicable Agent(s), on the
other hand, from the offering of the Notes that were the subject
of the claim for indemnification or (B) if the allocation
provided by clause (A) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (A) above but also the
relative fault of the Company on the one hand and the applicable
Agent(s) on the other hand in connection with the statements or
omissions which resulted in such Damages, as well as any other
relevant equitable considerations.
(ii) The relative benefits received by the Company
on the one hand and the applicable Agent(s) on the other hand in
connection with the offering of the Notes that were the subject
of the claim for indemnification shall be deemed to be in the
same respective proportions as the total net proceeds (after
deducting discounts and commissions but before deducting
expenses) received by the Company from the sale of the Notes that
were the subject of the claim for indemnification, and the total
discounts or commissions received by each applicable Agent in
connection with the sale of such Notes, as the case may be, bears
to the aggregate total sale prices of such Notes.
(iii) The relative fault of the Company, on
the one hand, and the applicable Agent(s), on the other hand,
shall be determined by reference to, among other things, whether
any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company or by the applicable Agent(s)
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission.
(iv) The Company and the Agents agree that it
would not be just and equitable if contribution pursuant to this
Section 7(d) were determined by pro rata allocation (even if the
applicable Agent(s) were treated as one entity for such purpose)
or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section
7(d). The aggregate amount of Damages incurred by an indemnified
party and referred to above in this Section 7(d) shall be deemed
to include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified party
in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim that could have given
rise to such Damages.
(v) Notwithstanding the provisions of this
Section 7(d), no Agent shall be required to contribute any amount
in excess of (x) the amount by which the total price at which the
Notes sold through such Agent were offered to the public in the
offering of the Notes that were the subject of the claim for
indemnification exceeds (y) the amount of any Damages which such
Agent has otherwise been required to pay by reason of any
applicable untrue or alleged untrue statement or omission or
alleged omission.
(vi) No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(vii) For purposes of this Section 7(d), each
person, if any, who controls an Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Agent, and
each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the
same rights to contribution as the Company.
(viii) In connection with an offering of Notes
purchased from the Company by two or more Agents as principal,
the respective obligations of such Agents to contribute pursuant
to this Section 7(d) are several in proportion to the aggregate
principal amount of Notes that each such Agent has purchased from
the Company and not joint.
(e) The obligations of the Company under this Section
7 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls an Agent within
the meaning of the Securities Act; and each Agent's obligations
under this Section 7 shall be in addition to any liability which
such Agent may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company within the
meaning of the Securities Act.
8. Agent as Agent, Not Principal. In soliciting
purchases of the Notes from the Company, each Agent is acting
solely as agent for the Company and not as principal. Each Agent
will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes from
the Company has been solicited by such Agent and accepted by the
Company but such Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any
reason. If the Company shall default in its obligation to
deliver Notes to a purchaser whose offer it has accepted, the
Company (i) shall hold the Agent harmless against any loss,
claim, or damage arising from or as a result of such default by
the Company, and (ii) shall pay to the Agent any commission to
which it would have been entitled in connection with such sale.
9. Effect of Investigation. The respective
indemnities, agreements, representations, warranties and other
statements of the Company and each Agent, as set forth in this
Agreement or any Terms Agreement or made by the Company and each
Agent, respectively, pursuant to this Agreement or any terms
Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof)
made by or on behalf of each Agent or any controlling person of
such Agent, or the Company, or any officer or director or
controlling person of the Company and shall survive delivery of
and payment for any of the Notes.
10. Termination of this Agreement or Terms Agreement.
This Agreement may be terminated for any reason, at any time by
the Company as to any Agent or by any Agent as to such Agent upon
the giving of 30 days' written notice of such termination to such
Agent or the Company, as the case may be. Each Agent may also
terminate any Terms Agreement to which it is a party, immediately
upon notice to the Company, at any time prior to the Settlement
Date relating thereto (i) if there has been, since the respective
dates as of which information is given in the Registration
Statement, any material adverse change in the financial condition
of the Company and its subsidiaries, taken as a whole, or in the
earnings, affairs or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, which change was not reported by the
Company in a filing made under the Exchange Act and disclosed to
such Agent by the Company prior to the execution and delivery of
such Terms Agreement or (ii) if, since the execution and delivery
of such Terms Agreement, there has occurred any outbreak or
escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as
to make it, in such Agent's judgment, impracticable to market the
Notes or enforce contracts for the sale of the Notes, or
(iii) if, since the execution and delivery of such Terms
Agreement, trading in any debt securities of the Company has been
suspended by the SEC or a national securities exchange, or if,
since the execution and delivery of such Terms Agreement, trading
generally on either the American Stock Exchange or the New York
Stock Exchange has been suspended, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by
order of the SEC or any other governmental authority, or if,
since the execution and delivery of such Terms Agreement, a
banking moratorium has been declared by either Federal or New
York authorities. If any such termination occurs, neither party
will have any liability to the other party thereto, except that
(i) such Agent shall be entitled to any commissions earned in
accordance with the third paragraph of Section 2(a) hereof, (ii)
if at the time of termination (A) such Agent shall own any of the
Notes or (B) an offer to purchase any of the Notes has been
accepted by the Company but the time of delivery to the purchaser
or his agent of the Notes relating thereto has not occurred, the
covenants set forth in Sections 3 and 6 hereof shall remain in
effect until such Notes are so resold or delivered, as the case
may be, and (iii) the covenant set forth in Section 3(d) hereof,
the provisions of Section 4 hereof, the indemnity and
contribution agreements set forth in Section 7 hereof, and the
provisions of Sections 9, 12 and 14 hereof shall remain in
effect.
11. Notices. All statements, requests, notices and
agreements hereunder shall be in writing or by telecopy if
promptly confirmed in writing, and if to you shall be sufficient
in all respects if delivered or sent by registered mail to Banc
of America Securities LLC, NC1-007-07-01, Bank of America
Corporate Center, 100 North Tryon Street, Charlotte, North
Carolina 28255, Attention: Lynn T. McConnell; ABN AMRO
Incorporated; 1290 Avenue of the Americas; 10th Floor; New York,
New York 10104; Attention: Mark Egert; and Chase Securities
Inc.; 270 Park Avenue; 8th Floor; New York, New York 10017;
Attention: Medium Term Note Desk and if to the Company shall be
sufficient in all respects if delivered or sent by registered
mail to the address of the Company set forth in the Registration
Statement, Attention: Secretary, or to such other address as may
be specified by the Company or any Agent by notice given to the
other parties hereto in accordance with this Section 11.
12. Benefits of the Agreement. This Agreement and any
Terms Agreement shall inure to the benefit of and be binding upon
the respective Agents and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement or
any Terms Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and
their respective successors and the controlling persons and
officers and directors referred to in Section 7 and their heirs
and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any Terms
Agreement or any provision herein or therein contained. This
Agreement and any Terms Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and officers and
directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of
Notes shall be deemed to be a successor by reason merely of such
purchase.
13. Time of Essence. Time shall be of the essence of
this Agreement.
14. Governing Law. This Agreement shall be construed
in accordance with the laws of the State of New York.
15. Counterparts. This agreement may be executed by
any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your
understanding, please sign and return to us five counterparts
hereof, and upon the acceptance hereof by each Agent, this letter
and such acceptance hereof shall constitute a binding agreement
between each Agent and the Company.
Very truly yours,
EL PASO ENERGY CORPORATION
By: /s/ H. Brent Austin
------------------------
H. Brent Austin
Executive Vice President
and Chief Financial Officer
Accepted as of the date hereof
BANC OF AMERICA SECURITIES LLC
By: /s/ Lily Chang
----------------
Lily Chang
Principal
ABN AMRO INCORPORATED
By: /s/ Linda A. Dawson
--------------------
Linda A. Dawson
Managing Director
CHASE SECURITIES INC.
By: /s/ Peter Madonia
---------------------
Peter Madonia
Managing Director
SCHEDULE I
Term Commission Rates
From 9 months to less than 1 year 0.125%
From 1 year to less than 18 months 0.150%
From 18 months to less than 2 years 0.200%
From 2 years to less than 3 years 0.250%
From 3 years to less than 4 years 0.350%
From 4 years to less than 5 years 0.450%
From 5 years to less than 6 years 0.500%
From 6 years to less than 7 years 0.550%
From 7 years to less than 8 years 0.600%
From 8 years to less than 9 years 0.600%
From 9 years to less than 10 years 0.600%
From 10 years to less than 15 years 0.625%
From 15 years to less than 20 years 0.675%
From 20 years to less than 30 years 0.750%
From 30 years to 40 years *
* As agreed to by the Company and the applicable Agent at the
time of sale.
EXHIBIT A
EL PASO ENERGY CORPORATION
Medium-Term Notes
FORM OF TERMS AGREEMENT
_____________, _____
Banc of America Securities LLC
NC1-007-07-01
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
ABN AMRO Incorporated
1325 Avenue of the Americas, 10th Floor
New York, New York 10019
Chase Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017-2070
Ladies and Gentlemen:
El Paso Energy Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated
herein and in the Restated Distribution Agreement, dated
October 5, 2000 (the "Distribution Agreement"), between the
Company on the one hand and Banc of America Securities LLC, ABN
AMRO Incorporated and Chase Securities Inc. (together, the
"Agents") on the other, to issue and sell to the Agents the
securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the
Agents, as agents of the Company, of offers to purchase the
Securities is incorporated herein by reference in its entirety,
and shall be deemed to be part of this Terms Agreement to the
same extent as if such provision had been set forth in full
herein. Nothing contained herein or in the Distribution
Agreement shall make any party hereto an agent of the Company or
make such party subject to the provisions therein relating to the
solicitation of offers to purchase securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each
of the representations and warranties set forth therein shall be
deemed to have been made at and as of the date of this Terms
Agreement, except that each representation and warranty in
Section 1 of the Distribution Agreement which makes reference to
the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation
to the Prospectus (as therein defined), and also a representation
and warranty as of the date of this Terms Agreement in relation
to the Prospectus as amended and supplemented to relate to the
Purchased Securities.
An amendment to the Registration Statement, or a supplement
to the Prospectus, as the case may be, relating to the Purchased
Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in
the Distribution Agreement incorporated herein by reference, the
Company agrees to issue and sell to the Agents, and the Agents
agree to purchase from the Company the Purchased Securities, at
the time and place, in the principal amount and at the purchase
price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us a counterpart hereof, and upon
acceptance hereof by you, this letter and such acceptance hereof,
including those provisions of the Distribution Agreement
incorporated herein by reference, shall constitute a binding
agreement between you and the Company.
EL PASO ENERGY CORPORATION
By:
Name:
Title:
Accepted:
BANC OF AMERICA SECURITIES LLC
By:
Name:
Title:
ABN AMRO INCORPORATED
By:
Name:
Title:
CHASE SECURITIES INC.
By:
Name:
Title:
Schedule to Exhibit A
Title of Purchased Securities:
___% Medium-Term Senior Notes
Aggregate Principal Amount:
$
Price to the Public:
$
Purchase Price by Agent[s]:
___% of the principal amount of the Purchased Securities,
plus accrued interest from ____________ to ____________ and
accrued amortization, if any, from ___________ to __________.
Method of, and Specified Funds for, Payment of Purchase Price:
[By certified or official bank check or checks, payable to
the order of the Company, in [New York Clearing House or similar
next-day] [Fed Funds or similar immediately available] funds]
[By wire transfer to a bank account specified by the Company
in [New York Clearing House or similar next-day] [Fed Funds or
similar immediately available] funds]
Senior Indenture:
Indenture, dated as of May 10, 1999, between the Company and
The Chase Manhattan Bank, as Trustee
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
______%
Interest Payment Dates:
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
(1) The opinion of counsel to the Agents referred to in
Section 5(b).
(2) The opinion of counsel to the Company referred to in
Section 5(c).
(3) The officers' certificate referred to in Section 5(d).
(4) The accountants' letter referred to in Section 5(e).
Other Provisions (including Syndicate Provisions, if applicable):
EXHIBIT B
OPINION OF ANDREWS & KURTH L.L.P.
Counsel for the Company
The opinion of counsel for the Company pursuant to
Section 5(c) of the Distribution Agreement shall be to the effect
that:
1. The Registration Statement has become effective under
the Securities Act and no stop order suspending the
effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending
before or, to such counsel's knowledge, threatened by
the Commission.
2. (A) Each document, if any, filed pursuant to the
Exchange Act and incorporated by reference in the
Registration Statement or the Prospectus (except for
financial statements and schedules and other financial
or statistical data included or incorporated by
reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on its
face to be appropriately responsive in all material
respects with the requirements of the Exchange Act and
(B) the Registration Statement and Prospectus (except
for financial statements and schedules and other
financial or statistical data included or incorporated
by reference therein or omitted therefrom as to which
such counsel need not express any opinion) appeared on
their face to be appropriately responsive in all
material respects with the requirements of the
Securities Act.
3. The Distribution Agreement and any Terms Agreement with
respect to the Notes have been duly authorized,
executed and delivered by the Company.
4. The Company is not and, after giving effect to the
offering and sale of the Securities and the application
of the proceeds thereof as described in the Prospectus,
will not be, (i) an "investment company" as such term
is defined in the Investment Company Act of 1940, as
amended or (ii) a "holding company" within the meaning
of, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended, and the rules
and regulations promulgated by the commission
thereunder.
5. The Indenture has been duly qualified under the Trust
Indenture Act and has been authorized, executed and
delivered by the Company and constitutes a valid and
legally binding obligation of the Company, enforceable
in accordance with its terms, except as (a) the
enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent
conveyance or transfer or other similar laws relating
to or affecting creditors' rights generally and
(b) rights of acceleration and the availability of
equitable remedies may be limited by equitable
principles of general applicability.
6. The Notes have been duly authorized, and when the Notes
have been executed and authenticated in accordance with
the provisions of the Indenture and issued and
delivered to and paid for in accordance with the terms
of the applicable Terms Agreement, will be entitled to
the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in
accordance with their terms, except as (a) the
enforcement thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights
generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by
equitable principles of general applicability.
7. The execution and delivery by the Company of, and the
performance by the Company of its obligations under,
the Distribution Agreement and any applicable Terms
Agreement will not violate any provision of applicable
United States federal law, New York law or the Delaware
General Corporation Law, or the Restated Certificate of
Incorporation, as amended, or By-Laws, as amended, of
the Company on the certificate of incorporation or
bylaws of any significant subsidiary.
8. No consent, approval, authorization or order of or
qualification with any United States federal, New York
or (with respect to matters arising under the Delaware
General Corporation Law) Delaware body or agency is
required for the performance by the Company of its
obligations under the Distribution Agreement or
applicable Terms Agreement, except such (i) which have
been obtained, or (ii) as may be required under the
securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities,
as to which such counsel need not express any opinion,
or except where failure to obtain such consent,
approval, authorization, order or qualification would
not have a material adverse effect on the business,
financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
9. The statements (A) in the Prospectus under the captions
"Description of the Medium Term Notes" and "Description
of the Senior Debt Securities" and (B) in the
Registration Statement under Item 15, insofar as such
statements constitute a summary of the legal matters
referred to therein, fairly present the information
disclosed therein in all material respects.
10. The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and
supplements thereto made by the Company prior to the
Closing Time or Settlement Date at which such opinion
is delivered (other than the financial statements and
related schedules and other financial or statistical
data included therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the requirements of the Securities Act
and the Trust Indenture Act and the rules and
regulations promulgated thereunder.
In addition, such counsel shall state that, in the
course of the preparation by the Company of the Registration
Statement, the Prospectus and the applicable Pricing Supplement
(including the documents incorporated by reference therein), such
counsel participated in conferences with certain of the officers
and representatives of the Company, the Company's independent
accountants, the Agents and counsel for the Agents at which the
Registration Statement, the Prospectus and such Pricing
Supplement were discussed. Such counsel shall state that,
between the date of effectiveness of the Registration Statement
and the time of delivery of such counsel's opinion letter, such
counsel participated in additional conferences with certain
officers and representatives of the Company and the Company's
independent accountants at which portions of the Registration
Statement, the Prospectus and such Pricing Supplement were
discussed. Given the limitations inherent in the independent
verification of factual matters and the character of
determinations involved in the registration process, such counsel
does not pass upon and need not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in
the Registration Statement, the Prospectus or the Prospectus
Supplement, except as specifically described in the opinion in
paragraphs 2 and 9 above. Subject to the foregoing and on the
basis of the information such counsel gained in the performance
of the services referred to above, including information obtained
from officers and other representatives of the Company and the
Company's independent accountants, such counsel shall state that
no facts have come to such counsel's attention that have caused
it to believe that the Registration Statement, at the time it
became effective, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or that the Prospectus and the Pricing Supplement, as
of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. Also, subject to the foregoing, such
counsel shall state that no facts have come to its attention in
the course of the proceedings described in the first and second
sentences of this paragraph that caused such counsel to believe
that the Prospectus or the Pricing Supplement as of the date and
time of delivery of such counsel's opinion letter contains any
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
With respect to the preceding paragraph, counsel may
state that (A) their opinion and belief is based upon their
participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without
independent check or certification, except as specified and
(B) for purposes of paragraphs 7 and 8, such counsel may state
(i) that it has reviewed only those statutes, rules and
regulations that in its experience are applicable to transactions
of the type contemplated by the Distribution Agreement and (ii)
that it does not hold itself out as experts in the regulation of
the generation, transportation, distribution or delivery of
electricity or electrical services, or the import or export of
electricity or electrical services.
Such counsel need express no view, opinion or belief,
however, with respect to financial statements or notes thereto or
other financial or statistical data included or incorporated by
reference in or omitted from the Registration Statement or
Prospectus.
Such counsel may state that the opinions expressed
above are limited to the federal laws of the United States, the
laws of the State of New York, and the General Corporation Law of
the State of Delaware.
EXHIBIT C
IN-HOUSE LEGAL OPINION
Counsel for the Company
The Opinion of the [General/Associate/Senior] Counsel
for the Company pursuant to Section 5(c) of the Distribution
Agreement shall be to the effect that:
1. Each of the Company and its significant subsidiaries
has been duly formed or incorporated, is validly
existing as a corporation, limited partnership, general
partnership or limited liability company in good
standing under the laws of its jurisdiction of
formation or incorporation and has the entity power and
authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus,
and each is duly qualified as a foreign corporation,
limited partnership, general partnership or limited
liability company to transact business and is in good
standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property
requires such qualification, except where the failure
to be so qualified or to be in good standing would not
have a material adverse effect on the business,
financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
2. The execution, delivery and performance of the
Distribution Agreement, the Indenture, including the
Directors' Resolution applicable to the Notes and the
Notes by the Company, the compliance by the Company
with all the provisions thereof and the consummation of
the transactions contemplated thereby will not, to such
counsel's knowledge, (i) violate any indenture, loan
agreement, mortgage, deed of trust, lease or other
agreement or instrument to which the Company or any
significant subsidiary is a party or by which the
Company or any significant subsidiary or their
respective property is bound or (ii) violate or
conflict with any judgment, order or decree of any
court or any governmental body or agency having
jurisdiction over the Company, any significant
subsidiary or their respective property, except in each
case, for such violations as would not have a material
adverse effect on the business, financial condition or
results of operation of the Company and its
subsidiaries, taken as a whole.
3. To such counsel's knowledge after due inquiry, there
are no legal or governmental proceedings pending or
threatened to which the Company or any Subsidiary is or
is threatened to be a party or to which any of their
respective property is or is threatened to be subject
that are required to be described in the Registration
Statement or the Prospectus and are not so described;
nor does such counsel know of any statutes,
regulations, contracts or other documents that are
required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or
filed as required.
4. (A) Each document if any, filed pursuant to the
Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus (except for
financial statements and schedules and other financial
or statistical data included or incorporated by
reference therein or omitted therefrom as to which such
counsel need not express any opinion) appeared on its
face to be appropriately responsive in all material
respects with the Exchange Act and (B) the Registration
Statement and Prospectus (except for financial
statements and schedules and other financial or
statistical data included or incorporated by reference
therein or omitted therefrom as to which such counsel
need not express any opinion) appeared on their face to
be appropriately responsive in all material respects
with the requirements of the Securities Act.
5. The statements under (A) the caption "Item 3 - Legal
Proceedings" of the Company's most recent annual report
on Form 10-K incorporated by reference into the
Prospectus and (B) the caption "Item 1 - Legal
Proceedings" of Part II of the Company's quarterly
reports on Form 10-Q filed since such annual report, if
any, in each case insofar as such statements constitute
summaries of the legal matters, documents or
proceedings referred to therein, fairly present as of
the date of the applicable report the information
disclosed therein in all material respects.
6. (A) The execution and delivery by the Company of, and
the performance by the Company of its obligations
under, the Distribution Agreement will not violate any
provisions of any applicable laws and regulations
specifically governing the generation, transportation,
distribution or delivery of natural gas, oil,
electricity or other related commodities or services,
including pipelines, transmission lines, storage
facilities and related facilities and equipment, or the
import or export of such commodities or services
(collectively, the "Energy Industry") and (B) no
consent, approval, authorization or order of or
qualification with any United States federal body or
agency specifically regulating the Energy Industry is
required for the performance by the Company of its
obligations under the Distribution Agreement, except in
each of the foregoing cases for such violations or
failures to obtain such consent, approval,
authorization, order or qualification as would not have
a material adverse effect on the business, financial
condition or results of operation of the Company and
its subsidiaries, taken as a whole.
In addition, such counsel shall state that in the
course of the preparation by the Company of the Registration
Statement, the Prospectus and the Pricing Supplement, such
counsel participated in conferences with certain of the officers
and representatives of the Company, counsel to the Company, the
Company's independent accountants, the Agents and counsel for the
Agents at which the Registration Statement, the Prospectus and
the Pricing Supplement were discussed. Such counsel shall state
that, between the date of effectiveness of the Registration
Statement and the time of delivery of such counsel's letter, such
counsel participated in additional conferences with certain
officers and representatives of the Company, counsel to the
Company and the Company's independent accountants at which
portions of the Registration Statement, the Prospectus and the
Pricing Supplement were discussed. Given the limitations
inherent in the independent verification of factual matters and
the character of determinations involved in the registration
process, such counsel does not pass upon and need not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the
Prospectus or the Pricing Supplement, except as specifically
described in paragraphs 4 and 5 above. Subject to the foregoing
and on the basis of the information such counsel gained in the
performance of the services referred to above and in the
performance of his duties as General Counsel of the Company, as
well as information obtained from officers and other
representatives of the Company and the Company's independent
accountants, such counsel shall state that no facts have come to
such counsel's attention that have caused him to believe that the
Registration Statement, at the time it became effective,
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that
the Prospectus and the Prospectus Supplement, as of their
respective dates, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. Also, subject to the foregoing, no facts have come
to such counsel's attention in the course of the proceedings
described in the first and second sentences of this paragraph
that caused him to believe that the Prospectus or the Prospectus
Supplement as of the date and time of delivery of such counsel's
letter contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Such counsel need express no view, opinion or belief,
however, with respect to financial statements, schedules or notes
thereto or other financial or statistical data included or
incorporated by reference in or omitted from the Registration
Statement or Prospectus.
EXHIBIT D
EL PASO ENERGY CORPORATION
Medium-Term Notes
Administrative Procedures
Medium-Term Notes with maturities of nine months or
more from date of issue (the "Medium-Term Notes") are to be
offered on a continuing basis by El Paso Energy Corporation, a
Delaware corporation (the "Company"). Banc of America Securities
LLC and Chase Securities, Inc., as agents (each an "Agent" and,
collectively, the "Agents"), have agreed to use their best
efforts to solicit offers to purchase the Medium-Term Notes. The
Medium-Term Notes are being sold pursuant to a Restated
Distribution Agreement between the Company and the Agents dated
October 5, 2000 (as it may be supplemented or amended from time
to time, the "Distribution Agreement"), to which these
administrative procedures are attached as an exhibit. The Company
has also reserved the right to sell Medium-Term Notes directly on
its own behalf. The Medium-Term Notes will be issued pursuant to
an Indenture, dated as of May 10, 1999 (as supplemented or
amended from time to time, the "Indenture"), between the Company
and The Chase Manhattan Bank ("Chase"), as trustee (the
"Trustee"). The Medium-Term Notes will rank equally with all
other senior unsecured and unsubordinated indebtedness of the
Company and will have been registered with the Securities and
Exchange Commission (the "SEC"). Unless otherwise defined herein,
terms defined in the Distribution Agreement or Indenture shall
have the same meaning when used in this exhibit.
Each Medium-Term Note will be represented by either a
Global Security (as defined hereinafter) delivered to Chase as
agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC (a "Book-Entry Note") or
a certificate delivered to the Holder thereof or a Person
designated by such Holder (a "Certificated Note"). Only Medium-
Term Notes denominated and payable in U.S. dollars may be issued
as Book-Entry Notes. Owners of beneficial interests in Book-Entry
Notes will be entitled to delivery of Certificated Notes only
under the limited circumstances described in the Indenture.
Administrative responsibilities, document control and
record-keeping functions to be performed by the Company will be
performed by its Treasurer, its Chief Financial Officer or any
Assistant Treasurer. Administrative procedures for the offering
are explained below.
Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part II and Part III
hereof and the Letter of Representations of the Company and Chase
to DTC dated September 28, 2000, as amended or supplemented from
time to time (the "Letter of Representations"), and Certificated
Notes will be issued in accordance with the administrative
procedures set forth in Part I and Part III hereof. Medium-Term
Notes for which interest is calculated on the basis of a fixed
interest rate, which may be zero, are referred to herein as
"Fixed Rate Notes." Medium-Term Notes for which interest is
calculated on the basis of a floating interest rate are referred
to herein as "Floating Rate Medium-Term Notes." To the extent the
procedures set forth below conflict with the provisions of the
Notes, the Indenture, the Letter of Representations or the
Distribution Agreement, the relevant provisions of the Medium-
Term Notes, the Indenture, the Letter of Representations and the
Distribution Agreement shall control.
PART I
Administrative Procedures for Certificated Notes
Price to Public
---------------
Each Certificated Note will be issued at 100% of
principal amount, unless otherwise determined by the Company.
Date of Issuance
----------------
Each Certificated Note will be dated and issued as of
the date of its authentication by Chase.
Maturities
Each Certificated Note will mature on a Business Day
(as defined in Part III below) selected by the purchaser and
agreed upon by the Company, with maturities of nine months or
more from the date of issuance.
Registration
------------
The Certificated Notes will be issued only in fully
registered form. Chase (the "Paying Agent") will serve as
registrar and transfer agent in connection with the Certificated
Notes.
Denominations
-------------
The Certificated Notes will be issued and payable in
U.S. dollars in the denomination of $1,000 or any integral
multiple thereof unless otherwise determined by the Company.
The Company may determine, upon agreement with a
purchaser of Certificated Notes, that such Certificated Notes
will be denominated and payable in a foreign currency or currency
unit to be specified in a pricing supplement to the Prospectus
("Specified Currency"). In such case, unless otherwise specified
in such pricing supplement, the authorized denominations of such
Certificated Notes will be the equivalent, as determined by the
11:00 a.m. (New York City time) buying rate for such Specified
Currency for cable transfers quoted in New York City as certified
for customs purposes by the Federal Reserve Bank of New York (the
"Market Exchange Rate") on the Business Day immediately preceding
the Settlement Date (as defined below) for such Certificated
Notes, of U.S. $1,000 (rounded down to an integral multiple of
units of specified denominations of such Specified Currency). If
such rates are not available for any reason, the Market Exchange
Rate will be determined in accordance with the alternative
provision for determining the Market Exchange Rate pursuant to
the description therefor set forth under the caption "Description
of the Medium Term Notes C Denominations; Currency; Varying
Interest Rates" in the Company's Prospectus Supplement, dated
December 14, 1999.
Interest Payments
-----------------
Each Fixed Rate Certificated Note will bear interest
from its issue date (the "Original Issue Date") at the annual
rate stated on the face thereof, payable on January 15 and July
15 of each year (the "Interest Payment Dates"), commencing
(unless otherwise specified in the applicable supplement to the
Prospectus) on the first Interest Payment Date after issuance,
and at Stated Maturity or upon redemption, if applicable.
Interest on each Certificated Note will be calculated and paid on
the basis of a 360-day year of twelve 30-day months (unless
otherwise specified in the applicable pricing supplement).
Interest will be payable to the Person in whose name such
Certificated Note is registered at the close of business on the
January 1 or July 1 (the "Regular Record Dates") next preceding
the respective Interest Payment Date; provided, however, that (i)
if an Original Issue Date falls between a Regular Record Date and
an Interest Payment Date, the first payment of interest will
occur on the Interest Payment Date following the next Regular
Record Date and (ii) interest payable at Maturity will be payable
to the Person to whom principal shall be payable (whether or not
such Maturity is an Interest Payment Date). Any payment of
principal and interest on such Certificated Note required to be
paid on an Interest Payment Date or at Stated Maturity or upon
redemption, if applicable, which is not a Business Day shall be
postponed to the next day which is a Business Day, and no
interest on such payment will accrue for the period from and
after such Interest Payment Date or Stated Maturity or redemption
date, as the case may be, to the date of the payment on the next
succeeding Business Day. All interest payments (excluding
interest payments made at Stated Maturity or upon redemption, if
applicable) will be made by check mailed, first class, postage
prepaid, to the Person entitled thereto as provided above or
otherwise in accordance with the Indenture, or by wire transfer
of immediately available funds to an account designated by such
Person if appropriate wire transfer instructions have been
received in writing by the Paying Agent not less than 10 days
before such Interest Payment Date.
On the fifth Business Day immediately preceding each
Interest Payment Date, Chase will notify the Company of the total
amount (to the extent known to Chase on such date) of the
interest payments to be made on such Interest Payment Date.
Chase(or any duly selected paying agent) will provide monthly to
the Company's finance department a list of the principal and
interest (to the extent known to Chase or such paying agent at
that time) to be paid on Certificated Notes maturing in the next
succeeding month. To the extent provided in the Indenture, the
Company will provide to the Paying Agent not later than the
payment date sufficient moneys to pay in full all principal and
interest payments due on such payment date. The Paying Agent will
assume responsibility for withholding taxes on interest paid as
required by law.
For special provisions relating to the Floating Rate
Notes, see Appendix A hereto. Special provisions relating to
Certificated Notes denominated in a Specified Currency may be
agreed upon by the Company and the Agents at a later time (the
"Specified Currency Provisions").
Settlement
----------
The receipt of immediately available funds in U.S.
dollars by the Company in payment for a Certificated Note (less
the applicable commission) and the authentication and issuance of
such Certificated Note shall, with respect to such Certificated
Note, constitute "Settlement" and the date thereof shall be
referred to as the "Settlement Date." All offers to purchase
Certificated Notes accepted by the Company will be settled from
one to three Business Days from the date of acceptance by the
Company pursuant to the timetable for Settlement set forth below
unless the Company and the purchaser agree to Settlement on a
different date; provided, however, that the Company will so
notify Chase (which notice with respect to a Certificated Note
denominated in a Specified Currency will not be less than five
Business Days prior to the Settlement Date) of any such different
date on or before the Business Day immediately prior to the
Settlement Date.
Settlement Procedures
---------------------
In the event of a purchase of Certificated Notes by an
Agent, as principal, appropriate Settlement details will be set
forth in the applicable Terms Agreement to be entered into
between such Agent and the Company pursuant to the Distribution
Agreement.
Settlement procedures with regard to each Certificated
Note sold through an Agent, as agent (the "Presenting Agent"),
shall be as follows:
A. The Presenting Agent will advise the Company and,
after the Company has accepted the offer, Chase, in writing
by facsimile or other electronic transmission, of the
following Settlement information:
1. Exact name in which Certificated Note is to
be registered ("Registered Owner").
2. Exact address of the Registered Owner and
address for payment of principal and
interest, if any.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount of the Certificated Note
(and, if multiple Certificated Notes are to
be issued, denominations thereof).
5. If the Certificated Notes are to be
denominated in a Specified Currency, whether
principal and interest is to be paid in U.S.
dollars or the Specified Currency.
6. Settlement Date.
7. Date of Maturity.
8. Interest rate:
(a) Fixed Rate Notes:
$ Interest Rate
$ Interest Reset Dates
(b) Floating Rate Notes:
$ Interest Rate Basis (or so called
Base Rate)
$ Initial Interest Rate
$ Spread or Spread Multiplier, if any
$ Interest Reset Periods and Interest
Reset Dates
$ Index Maturity
$ Maximum and Minimum Interest Rates,
if any
$ Calculation Agent
$ Calculation Date
$ Interest Determination Dates
(c) Interest Payment Periods and Interest
Payment Dates
(d) Regular Record Date
9. If applicable, the date on or after which the
Certificated Notes are redeemable at the
option of the Company.
10. Wire transfer information (including overseas
bank account of the country of the Specified
Currency, if any).
11. Presenting Agent's commission (to be paid in
the form of a discount from the proceeds
remitted to the Company upon Settlement).
12. Trade Date.
13. Net Proceeds to the Company.
14. Extension of Maturity Option (including the
basis or formula, if any, for the setting of
the Interest Rate or Spread and/or Spread
Multiplier, as applicable).
15. Renewal of Note Provisions.
16. Any other information pertinent to the
Certificated Note.
B. The Company will confirm to Chase (i) by facsimile
or other electronic transmission, the above Settlement
information and (ii) by facsimile, that the terms of the
Notes have been approved by the President, the Chief
Financial Officer or the Treasurer of the Company, and Chase
will assign a Certificated Note number to the transaction.
If the Company rejects an offer, the Company will promptly
notify the Presenting Agent by telephone, facsimile or other
electronic transmission.
C. The exchange rate agent, if any, appointed by the
Company will notify the Company, Chase and the Presenting
Agent of the Market Exchange Rate and the denominations of
Certificated Notes which are to be denominated and payable
in a Specified Currency.
D. The Trustee will complete the Certificated Note in
the form previously approved by the Company, the Agents and
Chase.
E. The Trustee will authenticate and deliver the
Certificated Note (with the attached white confirmation) and
the yellow and blue stubs to the Presenting Agent. The
Presenting Agent will acknowledge receipt of the
Certificated Note by completing the yellow stub and
returning it to the Trustee.
F. The Presenting Agent will cause to be wire
transferred to a bank account designated by the Company
immediately available funds in U.S. dollars in the amount of
the principal amount of the Certificated Note, less the
applicable commission.
G. The Presenting Agent will deliver the Certificated
Note (with the attached white confirmation) to the purchaser
against payment in immediately available funds in the amount
of the principal amount of the Certificated Note. The
Presenting Agent will deliver to the purchaser a copy of the
most recent Prospectus with the appropriate pricing
supplement applicable to the Certificated Note with or prior
to delivery of the Certificated Note and the confirmation
and payment by the purchaser for the Certificated Note. If
instructed by the purchaser to deliver the Certificated Note
and confirmation to different locations, the Certificated
Note and the confirmation will each be accompanied or
preceded by the Prospectus applicable to the Certificated
Note being delivered.
H. The Presenting Agent will obtain the
acknowledgment of receipt for the Certificated Note and
Prospectus by the purchaser through the purchaser's
completion of the blue stub.
I. The Trustee will mail the pink stub to the
Company's Chief Financial Officer, Treasurer or other
appropriate official.
Settlement Procedure Timetable
------------------------------
For offers accepted by the Company, Settlement
procedures AA through AI set forth above shall be completed on
or before the respective times set forth below:
Settlement
Procedure Time (New York)
---------- ----
A 4:00 p.m. on date of order (2:00 p.m. on
date of order in the case of
Certificated Notes with a
Settlement Date on the Business
Day after the date of order)
B 5:00 p.m. on date of order (3:00 p.m. on
date of order in the case of
Certificated Notes with a
Settlement Date on the Business
Day after the date of order)
C 10:00 a.m. on the Settlement Date
D-E 12:30 p.m. on the Settlement Date (1:00
p.m. on the Settlement Date in
the case of Certificated Notes
denominated in a Specified
Currency)
F 2:00 p.m. on the Settlement Date
G-H 3:00 p.m. on the Settlement Date
I 5:00 p.m. on the Business Day after the
Settlement Date
Fails
-----
If a purchaser of a Certificated Note shall either fail
to accept delivery of or make payment for Certificated Note on
the date fixed by the Company for Settlement, the Presenting
Agent will immediately notify the Trustee and the Company's Chief
Financial Officer, Treasurer or other appropriate official by
telephone, confirmed in writing, of such failure and return the
Certificated Note to the Trustee. Upon the Trustee's receipt of
the Certificated Note from the Presenting Agent, the Company will
promptly return to the Presenting Agent an amount of immediately
available funds in U.S. dollars equal to any amount previously
transferred to the Company in respect of the Certificated Note
pursuant to advances made by such Agent. Such returns will be
made on the Settlement Date, if possible, and in any event not
later than 12 noon (New York City time) on the Business Day
following the Settlement Date. The Company will reimburse the
Presenting Agent on an equitable basis for its loss of the use of
the funds during the period when the funds were credited to the
account of the Company. Upon receipt of the Certificated Note in
respect of which the default occurred, the Trustee will mark the
Certificated Note Acancelled, make appropriate entries in its
records and deliver the Certificated Note to the Company with an
appropriate debit advice. The Presenting Agent will not be
entitled to any commission with respect to any Certificated Note
which the purchaser does not accept or make payment for.
Redemption
----------
Except as otherwise specified in an applicable pricing
supplement to the Prospectus and on the Certificated Notes, the
Certificated Notes will not be redeemable prior to their Stated
Maturity. If so specified in such a pricing supplement and on
the Certificated Note, such Certificated Note will be subject to
redemption by the Company, at one or more redemption prices
(expressed as a percentage of the principal amount of such
Certificated Note) applicable during one or more redemption
periods, together with interest accrued thereon on the date fixed
for redemption.
Notice of redemption shall be given in accordance with
Section 1104 of the Indenture. If redemption of any Certificated
Note is made in part, a new Certificated Note for the amount of
the unredeemed portion shall be issued in the name of the Holder
upon cancellation of the redeemed Certificated Note.
Maturity
--------
Upon presentation of each Certificated Note at Stated
Maturity (unless the Company has exercised its option to extend
the Stated Maturity of a Certificated Note) or upon redemption
the Trustee (or any duly appointed Paying Agent) will pay the
principal amount or redemption price thereof, together with
accrued interest due at Stated Maturity or the date of
redemption. Such payment shall be made in immediately available
funds in U.S. dollars (except as provided in any Specified
Currency Provisions), provided that the Certificated Note is
presented to the Trustee (or any such Paying Agent) in time for
the Trustee (or such Paying Agent) to make payments in such funds
in accordance with its normal procedures. To the extent provided
in the Indenture, the Company will provide the Trustee (and any
such Paying Agent) with funds available for immediate use for
such purpose. Certificated Notes presented at Stated Maturity or
upon redemption will be canceled by the Trustee as provided in
the Indenture.
PART II
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by DTC,
Chase will perform the custodial, document control and
administrative functions described below, in accordance with its
obligations under the Letter of Representations and a Medium Term
Note Certificate Agreement between Chase and DTC dated as of
December 2, 1988 (the "Medium Term Note Certificate Agreement"),
a copy of which is attached hereto, and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement
System (ASDFS).
Price to Public
---------------
Each Book-Entry Note will be issued at 100% of
principal amount, unless otherwise determined by the Company.
Date of Issuance
----------------
On any Settlement Date (as defined under "Settlement"
below) for one or more Book-Entry Notes, the Company will issue a
single global security in fully registered form without coupons
(a "Global Security") representing up to $400,000,000 principal
amount of all such Book-Entry Notes that have the same terms.
Each Global Security will be dated and issued as of the date of
its authentication by the Trustee. Each Global Security will
bear an original issue date, which will be (i) with respect to an
original Global Security (or any portion thereof), the original
issue date specified in such Global Security and (ii) following a
consolidation of Global Securities, with respect to the Global
Security resulting from such consolidation, the most recent
Interest Payment Date (as defined in the Indenture) to which
interest has been paid or duly provided for on the predecessor
Global Securities regardless of the date of authentication of
such resulting Global Security. No Global Security will
represent (i) both Fixed Rate Book-Entry Notes and Floating Rate
Book-Entry Notes or (ii) any Certificated Note.
Identification Numbers
----------------------
The Company has arranged with the CUSIP Service Bureau
of Standard & Poor's Corporation (the CUSIP Service Bureau) for
the reservation of a series of CUSIP numbers, which series
consists of approximately 900 CUSIP numbers and relates to Global
Securities representing Book-Entry Notes and book-entry
Medium-Term Notes issued by the Company with other series
designations. The Company has obtained from the CUSIP Service
Bureau a written list of such reserved CUSIP numbers and has
provided a copy of such list to DTC and Chase. The Company will
assign CUSIP numbers to Global Securities as described below
under Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the Company
has assigned to Global Securities. Chase will notify the Company
at any time when fewer than 50 of the reserved CUSIP numbers
remain unassigned to Global Securities, and, if it deems
necessary, the Company will reserve additional CUSIP numbers for
assignment to Global Securities. Upon obtaining such additional
CUSIP numbers, the Company shall deliver a list of such
additional CUSIP numbers to Chase and DTC.
Registration
------------
Global Securities will be issued only in fully
registered form without coupons. Each Global Security will be
registered in the name of CEDE & CO., as nominee for DTC, on the
securities register for the Notes maintained under the Indenture.
The beneficial owner of 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 or agents
for such 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 beneficial owner in such
Book-Entry Note in the account of such Participants. The
ownership interest of such beneficial owner (or such indirect
participant in DTC) 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 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
---------
Chase may deliver to DTC and the CUSIP Service Bureau
at any time a written notice of consolidation specifying (i) the
CUSIP numbers of two or more outstanding Global Securities that
represent (A) Fixed Rate Book-Entry Notes having the same terms
and for which interest has been paid to the same date or (B)
Floating Rate Book-Entry Notes having the same terms and for
which interest has been paid to the same date, (ii) 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
such Book-Entry Notes, on which such Global Securities shall be
exchanged for a single replacement Global Security and (iii) a
new CUSIP number, obtained from the Company, to be assigned to
such replacement Global Security. Upon receipt of such a notice,
DTC will send to its participants (including Chase) a written
reorganization notice to the effect that such exchange will occur
on such date. Prior to the specified exchange date, Chase will
deliver to the CUSIP Service Bureau a written notice setting
forth such exchange date and such new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be valid. On the
specified exchange date, Chase will exchange such Global
Securities for a single Global Security bearing the new CUSIP
number and the CUSIP Numbers of the exchanged Global Securities
will, in accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be exchanged exceed
$400,000,000 in aggregate principal amount, one Global Security
will be authenticated and issued to represent each $400,000,000
of principal amount of the exchanged Global Securities and an
additional Global Security will be authenticated and issued to
represent any remaining principal amount of such Global
Securities (see Denominations below).
Maturity
--------
Each Book-Entry Note will mature on a date nine months
or more after the Settlement Date for such Book-Entry Note.
Denominations
-------------
Book-Entry Notes will be issued in principal amounts of
$1,000 or any integral multiple thereof. Global Securities will
be denominated in principal amounts not in excess of
$400,000,000. If one or more Book-Entry Notes having an aggregate
principal amount in excess of $400,000,000 would, but for the
preceding sentence, be represented by a single Global Security,
then one Global Security will be authenticated and issued to
represent each $400,000,000 principal amount of such Book-Entry
Note or Notes and an additional Global Security will be
authenticated and issued to represent any remaining principal
amount of such Book-Entry Note or Notes. In such a case, each of
the Global Securities representing such Book-Entry Note or Notes
shall be assigned the same CUSIP number.
Interest
--------
Interest, if any, on each Fixed Rate Book-Entry Note
will accrue from the original issue date for the first interest
period or the last date to which interest has been paid, if any,
for each subsequent interest period, on the Global Security
representing such Book-Entry Note, and will be calculated and
paid in the manner described in such Book-Entry Note. Unless
otherwise specified therein, each payment of interest on a Fixed
Rate Book-Entry Note will include interest accrued to but
excluding the Interest Payment Date or to but excluding the date
of Maturity. Interest on Fixed Rate Book-Entry Notes (including
interest for partial periods) will be calculated on the basis of
a 360-day year of twelve 30-day months.
Interest payable at the date of Maturity of a
Book-Entry Note will be payable to the Person to whom the
principal of such Book-Entry Note is payable. Standard & Poor's
Ratings Group may use the information received in the pending
deposit message described under Settlement Procedure "C" below in
order to include the amount of any interest payable and certain
other information regarding the related Global Security in the
appropriate (daily or weekly) bond report published by Standard &
Poor's Ratings Group.
For special provisions relating to the Floating Rate
Notes, see Appendix A hereto.
Payments of Interest
--------------------
Promptly after each Regular Record Date, the Paying
Agent will deliver to the Company and DTC a written notice
setting forth, by CUSIP number, the amount of interest (to the
extent then ascertainable) to be paid on each Global Security on
such 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 Global Security on such
Interest Payment Date by reference to the appropriate (daily or
weekly) bond reports published by Standard & Poor's Corporation.
The Company will pay to the Paying Agent the total amount of
interest due on such Interest Payment Date (other than at
Maturity), and the Paying Agent will pay such amount to DTC, at
the times and in the manner set forth below under Manner of
Payment. If any Interest Payment Date for a Fixed Rate
Book-Entry Note is not a Business Day, the payment 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 Interest Payment Date.
Payment at Maturity
-------------------
On or about the first Business Day of each month, the
Paying Agent will deliver to the Company and DTC a written list
of principal and interest (to the extent then ascertainable) to
be paid on each Global Security maturing in the following month
(excluding principal on a Book-Entry Note where the Company has
exercised its option to extend the Stated Maturity). The Company
and DTC will confirm the amounts of such principal and interest
payments with respect to each such Global Security on or about
the fifth Business Day preceding the Maturity of such Global
Security. On or before Maturity, the Company will pay to the
Paying Agent the principal amount of such Global Security,
together with interest due at such Maturity. The Paying Agent
will pay such amount to DTC at the times and in the manner set
forth below under Manner of Payment. If any Maturity of a
Global Security representing Book-Entry Notes is not a Business
Day, the payment 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 Maturity. Promptly
after payment to DTC of the principal and interest due at
Maturity of such Global Security, the Trustee will cancel such
Global Security in accordance with the Indenture and so advise
the Company.
Manner of Payment
-----------------
The total amount of any principal and interest due on
Global Securities on any Interest Payment Date or at Maturity
shall be paid by the Company to the Paying Agent in immediately
available funds no later than 9:30 a.m. (New York City time) on
such date. The Company will make such payment on such Global
Securities by instructing the Paying Agent to withdraw funds from
an account maintained by the Company at the Paying Agent or by
wire transfer to the Paying Agent. The Company will confirm any
such instructions in writing to the Paying Agent. Prior to 10:00
a.m. (New York City time) on the date of Maturity or as soon as
possible thereafter, the Paying Agent 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 thereon) due on a Global Security on such date. On
each Interest Payment Date (other than at Maturity), interest
payments shall be made to DTC, in funds available for immediate
use by DTC, in accordance with existing arrangements between the
Paying Agent and DTC. On each such 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 the Book-Entry Notes
represented by such Global Securities are recorded in the
book-entry system maintained by DTC. Neither the Company (as
issuer) nor the Paying Agent (as trustee, security registrar or
paying agent) shall have any direct responsibility or liability
for the payment by DTC to such Participants of the principal of
and interest on the Book- Entry Notes.
Withholding Taxes
-----------------
The amount of any taxes required under applicable law
to be withheld from any interest payment on a Book-Entry 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
Book-Entry Note.
Settlement
----------
The receipt by the Company of immediately available
funds in payment for a Book-Entry Note and the authentication and
issuance of the Global Security representing such Book-Entry Note
shall constitute Settlement with respect to such Book-Entry
Note and the date thereof shall be referred to as the Settlement
Date. All orders for Book-Entry Notes accepted by the Company
will be settled on the third Business Day following the date of
acceptance by the Company pursuant to the timetable for
Settlement set forth below unless the Company and the purchaser
agree to Settlement on another day which shall be no earlier than
the next Business Day following the date of acceptance.
Settlement Procedures
---------------------
In the event of a purchase of Book-Entry Notes by an
Agent, as principal, appropriate Settlement details will be set
forth in the applicable Purchase Agreement to be entered into
between such Agent and the Company pursuant to the Agency
Agreement.
Settlement Procedures with regard to each Book-Entry
Note sold by the Company through an Agent, as agent (the
"Presenting Agent"), shall be as follows:
A. The Presenting Agent will advise the Company by
telephone of the following Settlement information:
1. Principal amount.
2. Settlement Date.
3. Date of Maturity.
4. Interest rate:
(a) Fixed Rate Notes:
$ Interest Rate
$ Interest Reset Dates
(b) Floating Rate Notes:
$ Interest Rate Basis (or so called
Base Rate)
$ Initial Interest Rate
$ Spread or Spread Multiplier, if any
$ Interest Reset Periods and Interest
Reset Dates
$ Index Maturity
$ Maximum and Minimum Interest Rates,
if any
$ Calculation Agent
$ Calculation Date
$ Interest Determination Dates
(c) Interest Payment Periods and Interest
Payment Dates
(d) Regular Record Date
5. If applicable, the date on or after which the
Book-Entry Notes are redeemable at the option
of the Company.
6. Presenting Agent's commission (to be paid in
the form of a discount from the proceeds
remitted to the Company upon Settlement).
7. Trade Date.
8. Net Proceeds to Company.
9. Extension of Maturity Option (including the
basis or formula, if any, for the setting of
the Interest Rate, or the Spread and/or
Spread Multiplier, as applicable).
10. Renewal of Note Provisions.
11. Any other information pertinent to the Book-
Entry Note.
B. The Company will assign a CUSIP number to the
Global Security representing such Book-Entry Note and then
advise Chase by facsimile or electronic transmission of the
information set forth in Settlement Procedure above,
such CUSIP number and the name of the Presenting Agent. The
Company will confirm to Chase, by facsimile, that the terms
of the Book-Entry Notes have been approved by the President,
the Chief Financial Officer or the Treasurer of the Company.
The Company will also notify the Presenting Agent by
telephone of such CUSIP number as soon as practicable.
C. Chase will enter a pending deposit message through
DTC's Participant Terminal System providing the following
Settlement information to DTC (which shall route such
information to Standard & Poor's Ratings Group and
Interactive Data Corporation) and the Presenting Agent:
1. The information set forth in Settlement
Procedure.
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such
Book-Entry Note, number of days by which such
date succeeds the related Regular Record Date
(which, in the case of Floating Rate
Book-Entry Notes that reset weekly, shall be
the DTC Record Date, which is the date five
calendar days immediately preceding the
applicable Interest Payment Date and, in the
case of all other Book-Entry Notes, shall be
the Regular Record Date as defined in the
Indenture) and amount of interest payable on
such Interest Payment Date.
4. The interest payment period.
5. CUSIP number of the Global Security
representing such Book-Entry Note.
6. Whether such Global Security will represent
any other Book-Entry Note (to the extent
known at such time).
7. Numbers of the participant accounts
maintained by DTC on behalf of Chase and the
Presenting Agent.
D. To the extent the Company has not already done so,
the Company will deliver to the Trustee a Global Security in
a form that has been approved by the Company, the Agents and
the Trustee.
E. The Trustee will complete such Book-Entry Note,
stamp the appropriate legend, as instructed by DTC, if not
already set forth thereon, and authenticate the Global
Security representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note to Chase's
participant account at DTC.
G. Chase will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to (i)
debit such Book-Entry Note to Chase's participant account
and credit such Book-Entry Note to the Presenting Agent's
participant account and (ii) debit the Presenting Agent's
Settlement account and credit Chase's Settlement account for
an amount equal to the principal amount of such Book-Entry
Note less the Presenting Agent's commission. The entry of
such a deliver order shall constitute a representation and
warranty by Chase to DTC that (i) the Global Security
representing such Book-Entry Note has been issued and
authenticated and (ii) Chase is holding such Global Security
pursuant to the Medium Term Note Certificate Agreement.
H. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System instructing
DTC (i) to debit such Book-Entry Note to the Presenting
Agent's participant account and credit such Book-Entry Note
to the participant accounts of the Participants with respect
to such Book-Entry Note and (ii) to debit the Settlement
accounts of such Participants and credit the Settlement
account of the Presenting Agent for an amount equal to the
principal amount of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and "H" will
be settled in accordance with SDFS operating procedures in
effect on the Settlement Date.
J. Chase will, upon receipt of funds from the Agent
in accordance with Settlement Procedure "G," credit to an
account of the Company maintained at Chase funds available
for immediate use in the amount transferred to Chase in
accordance with Settlement Procedure "G."
K. Chase will send a copy of the Book-Entry Note by
first-class mail to the Company.
L. The Presenting Agent will confirm the purchase of
such Book-Entry Note to the purchaser either by transmitting
to the Participants with respect to such Book-Entry Note a
confirmation order or orders through DTC's institutional
delivery system or by mailing a written confirmation to such
purchaser.
Settlement Procedures Timetable
-------------------------------
For orders of Book-Entry Notes solicited by any Agent
and accepted by the Company for Settlement on the first Business
Day after such acceptance, Settlement Procedures "A" through
"K" set forth above shall be completed as soon as possible but not
later than the respective times set forth below:
Settlement Time (New York)
Procedure
A 11:00 a.m. on date of order
B 12:00 p.m. on date of order
C 2:00 p.m. on date of order
D 3:00 p.m. on date of order
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J-K 5:00 p.m. on Settlement Date
If an order is to be settled more than one Business Day
after acceptance by the Company, Settlement Procedures "A," "B"
and "C" may be completed not later than 11:00a.m., 12:00 Noon and
2:00 p.m., respectively, on the Business Day after the date of
acceptance. If the initial interest rate for a Floating Rate
Book-Entry Note has not been determined at the time that
Settlement Procedure "A" is completed, Settlement Procedures "B"
and "C" shall be completed as soon as such rate has been
determined but not later than 12:00 Noon and 2:00 p.m.,
respectively, on the Business Day after the date of acceptance.
Settlement Procedure "I" is subject to extension in accordance
with any extension of Fedwire closing deadlines and in the other
events specified in SDFS operating procedures in effect on the
Settlement Date.
If Settlement of a Book-Entry Note is rescheduled or
canceled, the Company will advise Chase and Chase will deliver to
DTC, through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m. on the Business
Day immediately preceding the scheduled Settlement Date.
Failure to Settle
-----------------
If Chase fails to enter an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement Procedure
"G," Chase may deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable, a withdrawal message instructing
DTC to debit such Book-Entry Note to Chase's participant account.
DTC will process the withdrawal message, provided that Chase's
participant account contains a principal amount of the Global
Security representing such Book-Entry Note that is at least equal
to the principal amount to be debited. If a withdrawal message
is processed with respect to all the Book-Entry Notes represented
by a Global Security, the Trustee will cancel such Global
Security in accordance with the Indenture and so advise the
Company. The CUSIP number assigned to such Global Security
shall, in accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the
Book-Entry Notes represented by a Global Security, Chase will
exchange such Book-Entry Note for two Global Securities, one of
which shall represent such Book-Entry Notes and shall be canceled
immediately after issuance and the other of which shall represent
the other Book-Entry Notes previously represented by the
surrendered Global Security and shall bear the CUSIP number of
the surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such Book-Entry
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 the orders entered pursuant to Settlement
Procedures "H" and "G," respectively. Thereafter, Chase will
deliver the withdrawal message and take the related actions
described in the preceding paragraph. The Company will reimburse
the Presenting Agent and Chase, as applicable, on an equitable
basis for their loss of the use of the funds during the period
when the funds were credited to the account of the Company
(except that the Company shall not be required to reimburse a
party if such party's default hereunder or under the Agency
Agreement shall have caused such failure by the beneficial
purchaser to make timely payment of the purchase price).
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 one
or more, but not all, of the Book-Entry Notes to have been
represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "E," for the authentication
and issuance of a Global Security representing the other
Book-Entry Notes to have been represented by such Global Security
and will make appropriate entries in its records.
Trustee Not to Risk Funds
-------------------------
Nothing herein shall be deemed to require Chase to risk
or expend its own funds in connection with any payment to the
Company, DTC, the Agents or the purchaser, it being understood by
all parties that payments made by Chase to the Company, DTC, the
Agents or the purchaser shall be made only to the extent that
funds are provided to Chase for such purpose.
PART III
Administrative Procedures for Book-Entry Notes
and Certificated Notes
Procedures for Establishing the Terms of the Notes
---------------------------------------------------
The Company and the Agents will discuss from time to
time the rates to be borne by the Notes that may be sold as a
result of the solicitation of offers by the Agents. Once an
Agent has recorded any indication of interest in Notes upon
certain terms, and communicated with the Company, if the Company
plans to accept an offer to purchase Notes upon such terms, it
will prepare a pricing supplement reflecting the terms of such
Notes (if the interest rate, Stated Maturity or other terms have
changed) and, after approval from such Agent, will arrange to
have such pricing supplement (together with the Prospectus if
amended or supplemented), electronically filed or transmitted by
a means reasonably calculated to result in filing with the SEC by
the second Business Day after the Company has accepted such offer
(or by the Business Day prior to the Settlement Date in the event
the Settlement Date is the first or second Business Day after
such acceptance) and pursuant to Rule 424(b) of the Rules and
Regulations, and will supply an appropriate number of copies of
the Prospectus, as then amended or supplemented, and including
such pricing supplement, to the Agent that presented such offer.
No Settlements with respect to Notes upon such terms may occur
prior to such filing or such transmission and the Agents will
not, prior to such filing or such transmission, mail
confirmations to customers who have offered to purchase Notes
upon such terms. After such filing or such transmission, sales,
mailing of confirmations and Settlements may occur with respect
to Notes upon such terms, subject to the provisions of "Delivery
of Prospectus" below.
If the Company decides to post rates and a decision has
been reached to change interest rates, the Company will promptly
so notify each Agent. Each Agent will forthwith suspend
solicitation of purchases. At that time, the Agents will
recommend and the Company will establish rates to be so posted.
Following establishment of posted rates and prior to the filing
or transmission described in the following sentence, the Agents
may record indications of interest in purchasing Notes only at
the posted rates. Once an Agent has recorded any indication of
interest in Notes at the posted rates and communicated with the
Company, if the Company plans to accept an offer at the posted
rate, it will prepare a pricing supplement reflecting such posted
rates and, after approval from such Agent, will arrange to have
such pricing supplement (together with the Prospectus if amended
or supplemented), electronically filed or transmitted by a means
reasonably calculated to result in filing with the SEC by the
second Business Day after the Company has accepted such offer (or
by the Business Day prior to the Settlement Date in the event the
Settlement Date is the first or second Business Day after such
acceptance) and pursuant to Rule 424(b) of the Rules and
Regulations, and will supply an appropriate number of copies of
the Prospectus, as then amended or supplemented, and including
such pricing supplement to the Agent who presented such offer.
No Settlements at the posted rates may occur prior to such filing
or such transmission and the Agents will not, prior to such
filing or such transmission, mail confirmations to customers who
have offered to purchase Notes at the posted rates. After such
filing or such transmission, sales, mailing of confirmations and
Settlements may resume, subject to the provisions of "Delivery of
Prospectus" below.
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 promptly communicate to
the appropriate official of the Company, orally or in writing,
each reasonable offer to purchase Notes from the Company received
by it other than those rejected by such Agent. Each Agent shall
have the right, in its discretion reasonably exercised without
advising the Company, to reject any offers in whole or in part.
Suspension of Solicitation; Amendment or Supplement
---------------------------------------------------
If, during any period in which, in the opinion of
counsel for the Agents (provided, if the Agents are no longer
soliciting (or have been instructed not to solicit) purchases of
Securities from the Company such opinion is known to the
Company), a prospectus relating to the Notes is required to be
delivered under the Act, any event known to the Company occurs as
a result of which the Prospectus would include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if
it is necessary at any time to amend the Prospectus to comply
with the Act or the Rules and Regulations, the Company will
notify the Agents promptly to suspend solicitation of purchases
of the Notes and the Agents shall suspend their solicitations of
purchases of Notes; and if the Company shall decide to amend or
supplement the Registration Statement or the Prospectus for
purposes of offering the Securities, it will promptly advise the
Agents by telephone (with confirmation in writing) and, except as
otherwise provided in any relevant Purchase Agreement, will
promptly prepare and file with the SEC an amendment or supplement
which will correct such statement or omission or an amendment,
whether by filing such documents pursuant to the Act or the
Exchange Act, as may be necessary to correct such untrue
statement or omission or to make the Registration Statement or
the Prospectus comply with such requirements and to prepare and
furnish to the Agents at its own expense such amendment or
supplement to the Registration Statement or the Prospectus as
will correct such Registration Statement or Prospectus; provided,
however, that the Company shall in any event promptly prepare,
file and furnish an Agent with such an amendment or supplement if
such Agent shall then hold any Securities acquired from the
Company as principal (other than such Securities as such Agent
shall have held for a period of six months or more). Upon the
Agents' receipt of such amendment or supplement and advice from
the Company that solicitations may be resumed, the Agents will
resume solicitations of purchases of the Notes.
In addition, the Company may instruct the Agents to
suspend solicitation of offers to purchase at any time. Upon
receipt of such instructions the Agents will forthwith (but in
any event within one Business Day) suspend solicitation of offers
to purchase from the Company until such time as the Company has
advised it that solicitation of offers to purchase may be resumed
and the Company has complied with Section 6 of the Distribution
Agreement to the extent then required. If the Company decides to
amend or supplement the Registration Statement or the Prospectus
relating to the Notes (other than to change interest rates or
maturities or similar changes and except in all cases by filing a
report on Form 8-K, pursuant to the Exchange Act, solely to add
exhibits to documents previously filed), it will promptly advise
the Agents and the Trustee and will furnish the Agents and the
Trustee with copies of the proposed amendment or supplement.
In the event that at the time the Agents, at the
direction of the Company, suspend solicitation of offers to
purchase from the Company there shall be any orders outstanding
which have not been settled, the Company will promptly advise the
Agents and the Trustee whether such orders may be settled and
whether copies of the Prospectus as theretofore amended 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 Prospectus as most recently amended or
supplemented on the date of delivery thereof must be delivered to
a purchaser prior to or together with the earliest of (i) any
written offer of such Note, (ii) confirmation of the purchase of
such Note and (iii) payment for such Note by its purchaser. The
Company shall ensure that an Agent receives copies of the
Prospectus and each amendment or supplement thereto (including
appropriate pricing supplements as described in the section
entitled "Procedures for Establishing the Terms of the Notes"
above) in such quantities and within such time limits as will
enable such Agent to deliver such confirmation or Note to a
purchaser as contemplated by these procedures and in compliance
with the preceding sentence. If, since the date of acceptance of
a purchaser's offer, the Prospectus shall have been supplemented
solely to reflect any sale of Notes on terms different from those
agreed to between the Company and such purchaser or a change in
posted rates not applicable to such purchaser, such purchaser
shall not receive the Prospectus as supplemented by such new
supplement, but shall receive the Prospectus as supplemented to
reflect the terms of the Notes being purchased by such purchaser
and otherwise as most recently amended or supplemented on the
date of delivery of the Prospectus. The Trustee will make all
such deliveries with respect to all Notes sold directly by the
Company.
Confirmation
-------------
For each order to purchase a Note solicited by any
Agent and accepted by the Company, the Presenting Agent will
issue a confirmation to the purchaser (with a copy to the
Company), including delivery and payment instructions.
Advertising Costs
-----------------
The Company will determine with the Agents the amount
and nature of advertising that may be appropriate in offering
the Notes. The "tombstone" advertisement and such other expenses
agreed to by the Company and Agents in connection with
solicitation of offers to purchase Notes from the Company will be
paid by the Company.
Business Day
------------
"Business Day" shall mean, for all purposes of these
Administrative Procedures, any day which is not a Saturday or
Sunday and which is not a day on which banking institutions are
generally authorized or obligated by law or executive order to
close (i) in New York City or in any other place where the
principal and interest on the Medium Term Notes is payable, (ii)
in the case of Notes denominated in a Specified Currency,
including LIBOR Notes (as defined in Appendix A), in the city
designated in an applicable supplement to the Prospectus as the
principal financial center of the country of such Specified
Currency and (iii) in the case of LIBOR Notes, any such date on
which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
APPENDIX A to EXHIBIT D
APPENDIX A to ADMINISTRATIVE PROCEDURES
Special Provisions Relating
to Floating Rate Notes
Interest Rate: Interest on Floating Rate Notes will be
determined by reference to an "Interest Rate
Basis", which shall be the "Commercial Paper
Rate" ("Commercial Paper Rate Notes"),
"LIBOR" ("LIBOR Notes"), the "CD Rate" ("CD
Rate Notes"), the "Treasury Rate" ("Treasury
Rate Notes"), the "CMT Rate" ("CMT Rate
Notes"), the "Eleventh District Cost of Funds
Rate" ("Eleventh District Cost of Funds Rate
Notes"), the "Federal Funds Effective Rate"
("Federal Funds Notes"), the "Prime Rate"
("Prime Rate Notes") or such other interest
rate formula as may be designated by the
Company, based upon the Index Maturity and
adjusted by a Spread or Spread Multiplier, if
any, as specified in the applicable pricing
supplement to the Prospectus setting forth
the terms of each issuance of Floating Rate
Notes (the "Pricing Supplement"). The "Index
Maturity" is the particular maturity of the
type of instrument or obligation from which
the Interest Rate Basis is calculated (e.g.,
in the case of commercial paper, 30-day
rather than 90-day commercial paper). The
"Spread" is the number of basis points (100
basis points equals one percent) above or
below the Interest Rate Basis applicable to
the particular Floating Rate Note, and the
"Spread Multiplier" is the percentage of the
Interest Rate Basis applicable to the
interest rate for the particular Floating
Rate Note. The Spread, Spread Multiplier,
Index Maturity and other variable terms as
described below are subject to change by the
Company from time to time, but no such change
will affect any Floating Rate Note previously
issued or as to which an offer has been
accepted by the Company. A Floating Rate
Note may also have either or both of the
following: (i) a maximum limit, or ceiling
("Maximum Interest Rate"), on the rate of
interest which may accrue during any Interest
Period (as defined below); and (ii) a minimum
limit, or floor ("Minimum Interest Rate"), on
the rate of interest which may accrue during
any Interest Period. In addition to any
Maximum Interest Rate which may be applicable
to any Floating Rate Note pursuant to the
above provisions, the interest rate on the
Floating Rate Notes will in no event be
higher than the maximum rate permitted by New
York law, as the same may be modified by
United States law of general application.
Under present New York law, the maximum rate
of interest is 25% per annum on a simple
interest basis. The limit may not apply to
Floating Rate Notes in which $2,500,000 or
more has been invested.
The Calculation Agent appointed by the
Company (the "Calculation Agent") (initially
The Chase Manhattan Bank) will, upon request
of a holder of Floating Rate Notes, provide
the interest rate then in effect and, if
determined, the interest rate which will
become effective as a result of a
determination made with respect to the most
recent Interest Determination Date (as
defined below) with respect to such Floating
Rate Notes. The applicable Pricing Supplement
will specify for each Floating Rate Note the
following terms: Interest Rate Basis, rate of
interest for the initial Interest Period (the
"Initial Interest Rate"), date of original
issue, Interest Determination Dates, Interest
Reset Dates (as defined below), Interest
Payment Dates (as defined below), Regular
Record Date (as defined below), Index
Maturity, maturity date, redemption date, if
any, repayment date, if any, Maximum Interest
Rate and Minimum Interest Rate, if any, and
the Spread or Spread Multiplier, if any.
Interest Except as set forth in the applicable Pricing
Payment Supplement and except as provided below,
Dates: interest will be payable in the case of
Floating Rate Notes with a daily, weekly or
monthly Interest Reset Date, 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 with a quarterly Interest
Reset Date, on the third Wednesday of March,
June, September and December of each year; in
the case of Floating Rate Notes with a
semi-annual Interest Reset Date, on the third
Wednesday of two months of each year
specified in the applicable Pricing
Supplement; in the case of Floating Rate
Notes with an annual Interest Reset Date, on
the third Wednesday of the month of each year
specified in the applicable Pricing
Supplement; and, in each case at the stated
maturity (or on the redemption date or
repayment date, if applicable) of the
Floating Rate Note. If any Interest Payment
Date for any Floating Rate Note would
otherwise be a day that is not a Business Day
(as defined below) for such Floating Rate
Note, the Interest Payment Date for such
Floating Rate Note shall be postponed to the
next succeeding day that is a Business Day
for such Floating Rate Note, except that (i)
in the case of a LIBOR Note, if such day
falls in the next calendar month, such
Interest Payment Date will be the
immediately preceding day that is a London
Business Day (as defined below) with respect
to such Note, and (ii) with respect to an
Interest Payment Date that is also the
maturity date of a Floating Rate Note, the
Interest Payment Date will remain the date
specified in the applicable Pricing
Supplement, payment due at maturity will be
made on the next succeeding day that is a
Business Day and no interest shall accrue on
the amount so payable for the period from and
after such maturity date. Each date on which
interest is payable on a Floating Rate Note
is referred to herein as an "Interest Payment
Date."
Interest Reset
Dates: The rate of interest on each Floating Rate
quarterly, semi-annually or annually (each an
"Interest Reset Date"), as specified in the
applicable Pricing Supplement. Except as set
forth in the applicable Pricing Supplement,
the Interest Reset Date will be, in the case
of Floating Rate Notes which reset: daily,
each Business Day; weekly (other than Treasury
Rate Notes), the Wednesday of each week (in
the case of weekly reset Treasury Rate Notes,
the Tuesday of each week); monthly (other than
Eleventh District Cost of Funds Rate Notes),
the third Wednesday of each month; quarterly,
the third Wednesday of March, June, September
and December of each year; semiannually, the
third Wednesday of two months of each year
specified in the applicable Pricing
Supplement; and annually, the third Wednesday
of the month of each year specified in the
applicable Pricing Supplement. For monthly
reset Eleventh District Cost of Funds Rate
Notes, the Interest Reset Dates will be the
first calendar day of each month.
Notwithstanding the two immediately preceding
sentences, (i) the interest rate in effect
from the date of original issue to the first
Interest Reset Date with respect to a Floating
Rate Note will be the Initial Interest Rate
set forth in the applicable Pricing Supplement
and (ii) unless otherwise specified in the
applicable Pricing Supplement, the interest
rate in effect for the 10 calendar days
immediately prior to maturity, redemption or
repayment, if applicable, will be that in
effect on the tenth calendar day preceding
such maturity, redemption or repayment. If
any Interest Reset Date for any Floating Rate
Note would otherwise be a day that is not a
Business Day for such Floating Rate Note, the
Interest Reset Date will be postponed to the
next day that is a Business Day for such
Floating Rate Note, except that in the case of
a LIBOR Note, if such next succeeding Business
Day is in the next succeeding calendar month,
such Interest Reset Date will be the
immediately preceding Business Day.
Interest The interest rate applicable to an Interest
Determination Reset Period that commences on the related
Dates: Interest Reset Date will be the rate
determined as of the applicable interest
determination date ("Interest Determination
Date") on or prior to the Calculation Date.
Except as set forth in the applicable Pricing
Supplement, the Interest Determination Date
pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial
Paper Interest Determination Date"), a Federal
Funds Note (the "Federal Funds Interest
Determination Date"), a CD Rate Note (the "CD
Interest Determination Date"), a CMT Rate Note
(the "CMT Interest Determination Date") or a
Prime Rate Note (the "Prime Interest
Determination Date") will be the second
Business Day preceding the applicable Interest
Reset Date. The Interest Determination Date
for an Eleventh District Cost of Funds Rate
Note will be the last working day of the month
immediately preceding the applicable Interest
Reset Date on which the Federal Home Loan Bank
of San Francisco publishes the "FHLB Index"
(as defined below). The Interest Determination
Date pertaining to an Interest Reset Date for
a LIBOR Note (the "LIBOR Interest
Determination Date") will be the second London
Business Day immediately preceding such
Interest Reset Date. The Interest
Determination Date pertaining to an Interest
Reset Date for a Treasury Rate Note (the
"Treasury Interest Determination Date") will
be the day in the week in which the applicable
Interest Reset Date falls on which Treasury
bills would normally be auctioned. Treasury
bills are normally sold at auction on Monday
of each week, unless that day is a legal
holiday, in which case the auction is usually
held on the following Tuesday, except that
such auction may be held on the preceding
Friday. If, as the result of a legal holiday,
an auction is so held on the preceding Friday,
such Friday will be the Treasury Interest
Determination Date pertaining to the Interest
Reset Date occurring in the next succeeding
week. If an auction date for Treasury bills
falls on any Interest Reset Date for a
Treasury Rate Note, then such Interest Reset
Date shall instead be the first Business Day
immediately following such auction date. The
Interest Determination Date pertaining to a
Floating Rate Note the interest rate of which
is determined by reference to more than one
Interest Rate Basis will be the second
Business Day prior to the applicable Interest
Reset Date for such Floating Rate Note on
which each such Interest Rate Basis is
determinable.
Calculation The Calculation Date, where applicable,
Dates: pertaining to any Interest Determination Date
will be the earlier of (i) the tenth calendar
day after such Interest Determination Date or
if any such day is not a Business Day, the
next succeeding Business Day and (ii) the
Business Day preceding the applicable
Interest Payment Date, the stated maturity,
the redemption date (if any) or the optional
repayment date (if any), as the case may be.
All percentages resulting from any
calculation on Floating Rate Notes will be
rounded to the nearest one hundred-thousandth
of a percentage point, with five one
millionths of a percentage point rounded
upwards (e.g., 9.876545% (or .09876545),
would be rounded to 9.87655% (or .0987655),
and all dollar amounts used in or resulting
from such calculation on Floating Rate Notes
will be rounded to the nearest cent or, in
the case of Notes denominated other than in
United States dollars, the nearest unit (with
one-half cent or unit being rounded upward).
Commercial Unless otherwise indicated in the applicable
Paper Rate Pricing Supplement, the "Commercial Paper
Notes: Rate" for each such Interest Reset Date will
be determined as of the Commercial Paper
Interest Determination Date and will be the
Money Market Yield (as defined below) on such
date of the rate for commercial paper having
the Index Maturity specified in the
applicable Pricing Supplement as published by
the Board of Governors of the Federal Reserve
System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor
publication selected by the Calculation Agent
("H.15(519)") under the heading "Commercial
Paper-Nonfinancial." If such rate is not
published prior to 3:00 p.m., New York City
time, on the Calculation Date pertaining to
such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate shall be
the Money Market Yield on such Commercial
Paper Interest Determination Date of the rate
for commercial paper of the specified Index
Maturity as published in the daily update of
H.15(519) available through the world wide
web site of the Board of Governors of the
Federal Reserve System at
http://www.bog.frb.fed.us/releases/h15/update
(the "H.15 Daily Update") under the heading
"Commercial Paper-Nonfinancial" (with an
Index Maturity of one month or three months
being deemed to be equivalent to an Index
Maturity of 30 days or 90 days respectively),
or any other recognized electronic source
used for the purpose of displaying the
applicable rate selected by the Calculation
Agent under the heading "Commercial Paper."
If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not published
in either H.15(519) or H.15 Daily Update, the
Commercial Paper Rate for that Commercial
Paper Interest Determination Date shall be
calculated by the Calculation Agent and shall
be the Money Market Yield of the arithmetic
mean of the offered rates as of 11:00 a.m.,
New York City time, on that Commercial Paper
Interest Determination Date, of three leading
dealers of commercial paper in The City of
New York selected by the Calculation Agent
(after consultation with the Company) for
commercial paper of the specified Index
Maturity placed for an industrial issuer
whose bond rating is "AA," or the equivalent,
from a nationally recognized securities
rating agency; provided, however, that if the
dealers selected as described above by the
Calculation Agent are not quoting as
mentioned in this sentence, the Commercial
Paper Rate with respect to such Commercial
Paper Interest Determination Date will be the
Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date
or, if no such rate is in effect, the
interest rate on the Commercial Paper Rate
Notes will be the Initial Interest Rate.
Money Market The term "Money Market Yield" means a yield
Yield: (expressed as a percentage rounded upwards,
if necessary, to the next higher one
hundred-thousandth of a percentage point)
calculated in accordance with the following
formula:
Money Market Yield = D x 360 x 100
360 - (DxM)
where "D" means the applicable per annum rate
for commercial paper quoted on a bank
discount basis and expressed as a decimal;
and "M" refers to the actual number of days
in the interest period for which interest is
being calculated.
LIBOR Notes: Each LIBOR Note will bear interest at the
interest rate (calculated with reference to
LIBOR and, if any, the Spread and/or Spread
Multiplier) specified in such LIBOR Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable
Pricing Supplement, "LIBOR" will he
determined by the Calculation Agent in
accordance with the following provisions:
(i) With respect to a LIBOR Interest
Determination Date, LIBOR will be, as
specified in the applicable Pricing
Supplement, either:
(a) the arithmetic mean of the offered
rates for deposits in U.S. dollars
having the Index Maturity
designated in the applicable
Pricing Supplement, commencing on
the second day on which dealings in
deposits in U.S. dollars are
transacted in the London interbank
market ("London Business Day")
immediately following that LIBOR
Interest Determination Date, that
appear on the Reuters Screen LIBO
Page an of 11:00 a.m., London time,
on that LIBOR Interest
Determination Date, if at least two
such offered rates appear on the
Reuters Screen LIBO Page ("LIBOR
Reuters"), or
(b) the rate for deposits in U.S.
dollars having the Index Maturity
designated in the applicable
Pricing Supplement, commencing on
the second London Business Day
immediately following such LIBOR
Interest Determination Date, that
appears on Telerate Page 3750 as of
11:00 a.m., London Time, on that
LIBOR Interest Determination Date
("LIBOR Telerate") . "Reuters
Screen LIBO Page" means the display
designated as page "LIBO" on the
Reuters Monitor Money Rates Service
(or such other page as may replace
the LIBO page on that service for
the purpose of displaying London
interbank offered rates of major
banks). "Telerate Page 3750" means
the display designated as page
"3750" on the Bridge Telerate Inc.
(or such other page as may replace
the 3750 page on that service or
such other service or services as
may be nominated by the British
Bankers' Association for the
purpose of displaying London
interbank offered rates for U.S.
dollar deposits). If neither LIBOR
Reuters nor LIBOR Telerate is
specified in the applicable Pricing
Supplement, LIBOR will be
determined as if LIBOR Telerate had
been specified. If fewer than two
offered rates appear on the Reuters
Screen LIBO Page, or if no rate
appears on Telerate Page 3750, as
applicable, LIBOR in respect of
that LIBOR Interest Determination
Date will be determined as if the
parties had specified the rate
described in (ii) below.
(ii) With respect to a LIBOR Interest
Determination Date on which fewer than two
offered rates appear on the Reuters Screen
LIBO Page as specified in (i) (a) above, or
on which no rate appears on Telerate Page
3750 as specified in (i) (b) above, as
applicable, LIBOR will be determined on the
basis of the rates at which deposits in U.S.
dollars having the Index Maturity designated
in the applicable Pricing Supplement are
offered at approximately 11:00 a.m., London
time, on such LIBOR Interest Determination
Date by four major banks in the London
interbank market selected by the Calculation
Agent (after consultation with the Company,
collectively, the "Reference Banks") to prime
banks in the London interbank market,
commencing on the second London Business Day
immediately following such LIBOR Interest
Determination Date and in a principal amount
of not less than $1,000,000 that is
representative for a single transaction in
such market at such time. The Calculation
Agent will request the principal London
office of each of the Reference Banks to
provide a quotation of its rate. If at least
two such quotations are provided, LIBOR for
such LIBOR Interest Determination Date will
be the arithmetic mean of such quotations.
If fewer than two quotations are provided,
LIBOR for such LIBOR Interest Determination
Date will be the arithmetic mean of the rates
quoted at approximately 11:00 a.m., New York
City time, on such LIBOR Interest
Determination Date by three major banks in
The City of New York selected by the
Calculation Agent (after consultation with
the Company) for loans in U.S. dollars to
leading European banks having the Index
Maturity designated in the applicable Pricing
Supplement, commencing on the second London
Business Day immediately following such LIBOR
Interest Determination Date and in a
principal amount equal to an amount of not
less than $1,000,000 that is representative
for a single transaction in such market at
such time; provided, however, that if the
banks selected as aforesaid by the
Calculation Agent are not quoting as
mentioned in this sentence, LIBOR with
respect to such LIBOR Interest Determination
Date will be the interest rate otherwise in
effect on such LIBOR Interest Determination
Date or, if no such rate is in effect, the
interest rate on LIBOR Rate Notes will be the
Initial Interest Rate.
CD Rate Notes: Unless otherwise indicated in the applicable
Pricing Supplement, the "CD Rate" for each
such Interest Reset Date will be determined
as of the CD Rate Interest Determination Date
and will be the rate on such date for
negotiable certificates of deposit having the
Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519)
under the heading "CDs (Secondary Market)" or
any successor publication or, if not so
published by 3:00 p.m., New York City time,
on the Calculation Date pertaining to such CD
Rate Interest Determination Date, the CD Rate
will be the rate on such CD Rate Interest
Determination Date for negotiable
certificates of deposit of the Index Maturity
designated in the applicable Pricing
Supplement as published in H.15 Daily Update
under the heading "CDs (Secondary Market)."
If such rate is not published in H.15 (519)
or the H.15 Daily Update by 3:00 p.m., New
York City time, on such Calculation Date,
then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the
Calculation Agent and will be the arithmetic
mean of the secondary market offered rates as
of 10:00 a.m., New York City time, on such CD
Rate Interest Determination Date, of three
leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in The City of
New York (which may include one or more
Agents or their affiliates) selected by the
Calculation Agent for negotiable certificates
of deposit of major United States money
market banks (in the market for negotiable
certificates of deposit) with a remaining
maturity closest to the Index Maturity
designated in the Pricing Supplement in an
amount that is representative for a single
transaction in the relevant market at the
time; provided, however, that if the dealers
selected an aforesaid by the Calculation
Agent are not quoting an mentioned in this
sentence, the CD Rate with respect to such CD
Rate Interest Determination Date will be the
CD Rate in effect on such CD Rate Interest
Determination Date or, if no such rate is in
effect, the interest rate on CD Rate Notes
will be the Initial Interest Rate.
Treasury Rate Unless otherwise indicated in the applicable
Notes: Pricing Supplement, the "Treasury Rate" for
each such Interest Reset Date will be
determined as of the Treasury Interest
Determination Date and will be the rate
applicable to the most recent auction of
direct obligations of the United States
("Treasury bills") having the Index Maturity
specified in the applicable Pricing
Supplement under the caption "INVESTMENT
RATE" on the display on Bridge Telerate,
Inc.(or any successor service) on page 56 or
57 (or any other page as may replace page 56
or page 57 on that service) or, if not so
published by 3:00 p.m., New York City time,
on the Calculation Date pertaining to such
Treasury Interest Determination Date, the
Bond Equivalent Yield, as defined below, of
the rate for the applicable Treasury Bills as
published in H.15 Daily Update, or other
recognized electronic source used for the
purpose of displaying the applicable rate,
under the caption "U.S. Government
Securities/Treasury Bills/Auction High," or,
if not so published by 3:00 p.m., New York
City time, on the Calculation Date pertaining
to such Treasury Interest Determination Date,
the Bond Equivalent Yield of the auction rate
of the applicable Treasury Bills announced by
the United States Department of the Treasury,
or if not announced by the States Department
of the Treasury, or if the auction is not
held, the Bond Equivalent Yield of the rate
on such date of the applicable Treasury Bills
published in H.15(519) under the caption
"U.S. Government Securities/Treasury
Bills/Secondary Market." If on the
Calculation Date pertaining to such Treasury
Interest Determination Date, such rate for
such period is not published by 3:00 p.m.,
New York City time, then the rate will be
calculated by the Calculation Agent as the
Bond Equivalent Yield of the arithmetic mean
of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time,
on such Treasury Interest Determination Date,
of three leading primary United States
government securities dealers, selected by
the Calculation Agent (after consultation
with the Company), for the issue of Treasury
bills with a remaining maturity closest to
the applicable Index Maturity; provided,
however, that if the dealers selected as
aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the
Treasury Rate with respect to such Treasury
Interest Determination Date will be the
Treasury Rate in effect on such Treasury Rate
Determination Date or, if no such rate is in
effect, the interest rate on Treasury Rate
Notes will be the Initial Interest Rate.
"Bond Equivalent Yield" means a yield
calculated in accordance with the following
formula and expressed as a percentage:
D x N
Bond Equivalent Yield = x 100
360 - (D - M)
where "D" refers to the applicable per annum
rate for Treasury Bills quoted on a bank
discount basis and expressed as a decimal,
"N" refers to 365 or 366, as the case may be,
and "M" refers to the actual number of days
in the interest period for which interest is
being calculated.
CMT Rate Notes: Unless otherwise specified in the applicable
Pricing Supplement, "CMT Rate" means, for any
CMT Rate Interest Determination Date, the
rate displayed on the Designated CMT Telerate
Page under the caption "...Treasury Constant
Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 p.m.,"
under the column for the Designated CMT
Maturity Index for (i) if the Designated CMT
Telerate Page is 7051, the rate on such CMT
Rate Interest Determination Date and (ii) if
the Designated CMT Telerate Page is 7052, the
week or the month, as applicable, ended
immediately preceding the week in which the
related CMT Rate Interest Determination Date
occurs. If that rate is no longer displayed
on the relevant page or is not displayed by
3:00 p.m., New York City time, on the related
Calculation Date, then the CMT Rate for such
CMT Rate Interest Determination Date will be
such treasury constant maturity rate for the
Designated CMT Maturity Index as published in
the relevant H.15 (519). If that rate is no
longer published or is not published by 3:00
p.m., New York City time, on the related
Calculation Date, then the CMT Rate on such
CMT Rate Interest Determination Date will be
that treasury constant maturity rate for the
Designated CMT Maturity Index (or other
United States Treasury Rate for the
Designated CMT Maturity Index) for the CMT
Rate Interest Determination Date with respect
to that Interest Reset Date as may then be
published by either the Board of Governors of
the Federal Reserve System or the United
States Department of the Treasury that the
Calculation Agent determines to be comparable
to the rate formerly displayed on the
Designated CMT Telerate Page and published in
the relevant H.15 (519).
If such information is not provided by 3:00
p.m., New York City time, on the related
Calculation Date, then the CMT Rate on the
CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will
be a yield to maturity, based on the
arithmetic mean of the secondary market
closing offer side prices as of approximately
3:30 p.m., New York City time, on such CMT
Rate Interest Determination Date reported,
according to the written records by three
leading primary United States government
securities dealers (each, a "Reference
Dealer") in The City of New York (which may
include any of the Agents or their affiliates
selected by the Calculation Agent (from five
such Reference Dealers selected by the
Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest),
for the most recently issued direct
noncallable fixed rate obligations of the
United States ("Treasury Notes") with an
original maturity of approximately the
Designated CMT Maturity Index and a remaining
term to maturity of not less than such
Designated CMT Maturity Index minus one year.
If the Calculation Agent is unable to obtain
three such Treasury Note quotations, the CMT
Rate for such CMT Rate Interest Determination
Date will be calculated by the Calculation
Agent (after consultation with the Company)
and will be a yield to maturity based on the
arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m.,
New York City time, on such CMT Rate Interest
Determination Date of three Reference Dealers
in The City of New York (from five such
Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation
(or, in the event of equality, one of the
highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for
Treasury Notes with an original maturity of
the number of years that is the next highest
to the Designated CMT Maturity Index and a
remaining term to maturity closes to the
Designated CMT Maturity Index and in an
amount of at least $100 million. If three or
four (and not five) of such Reference Dealers
are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of
the offer prices obtained and neither the
highest nor the lowest of such quotes will be
eliminated; provided, however, that if fewer
than three Reference Dealers to selected by
the Calculation Agent are quoting as
mentioned herein, the CMT Rate determined as
of such CMT Rate Interest Determination Date
will be the CMT Rate in effect on such CMT
Rate Interest Determination Date or, if no
such rate is in effect, the interest rate on
CMT Rate Notes will be the Initial Interest
Rate. If two Treasury Notes with an original
maturity as described in the second preceding
sentence have remaining terms to maturity
equally close to the Designated CMT Maturity
Index, the Calculation Agent will use the
quotations for the Treasury Note with the
shorter remaining term to maturity.
The term "Designated CMT Telerate Page" means
the display on Dow Jones Markets Limited on
the page specified in the applicable Pricing
Supplement (or any other page as may replace
such page on that service for the purpose of
displaying Treasury Constant Maturities as
reported in H.15 (519)) for the purpose of
displaying Treasury Constant Maturities as
reported in H.15 (519). If no such page is
specified in the applicable pricing
supplement, the Designated CMT Telerate Page
will be 7052 for the most recent week.
The term "Designated CMT Maturity Index"
means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5,
7, 10, 20 or 30 years) specified in the
applicable Pricing Supplement with respect to
which the CMT Rate will be calculated. If no
such maturity is specified in the applicable
Pricing Supplement, the Designated CMT
Maturity Index will be two years.
Eleventh Unless otherwise specified in the applicable
District Cost Pricing Supplement, "Eleventh District Cost
of Funds Rate of Funds Rate" means for any Eleventh
Notes: District Cost of Funds Rate Interest
Determination the rate of interest equal to
the monthly weighted average cost of funds
for the calendar month immediately preceding
the month in which such Eleventh District
Cost of Funds Rate Interest Determination
Date falls, as set forth under the caption
"11th District" on Telerate Page 7058 as of
11:00 a.m., San Francisco time, on such
Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not
appear on Telerate Page 7058 on any related
Eleventh District Cost of Funds Rate Interest
Determination Date, then the Eleventh
District Cost of Funds Rate for such Eleventh
District Cost of Funds Rate Interest
Determination Date will be the monthly
weighted average costs of funds paid by
member institutions of the Eleventh Federal
Home Loan Bank District that was most
recently announced (the "FHLB Index") by the
Federal Home Loan Bank of San Francisco as
such cost of funds for the calendar month
immediately preceding the date of such
announcement. If the Federal Home Loan Bank
of San Francisco fails to announce such rate
for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate
Interest Determination Date, then the
Eleventh District Cost of Funds Rate
determined as of such Eleventh District Cost
of Funds Rate Interest Determination Date
will be the Eleventh District Cost of Funds
Rate in effect on such Eleventh District Cost
of Funds Rate Interest Determination Date or,
if no such rate is in effect, the interest
rate on Eleventh District Cost of Funds Rate
Notes will be the Initial Interest Rate.
Federal Funds Unless otherwise indicated in the applicable
Rate: Pricing Supplement, "Federal Funds Rate"
means, for any Federal Funds Interest
Determination Date, the rate of interest on
such date for Federal Funds as such rate
shall be published in H.15(519) under the
caption "Federal Funds (Effective)", as such
rate is displayed on Telerate Page 120 (or
any other page as may replace such page on
such service) ("Telerate Page 120"), or, if
not so published by 3:00 p.m., New York City
time, on the Calculation Date pertaining to
such Federal Funds Interest Determination
Date, the Federal Funds Rate will be the rate
on such Federal Funds Interest Determination
Date as published in H.15 Daily Update, or
other electronic source used to display the
applicable rate, under the caption "Federal
Funds/Effective Rate." If such rate does not
appear on Telerate Page 120 or is not
published in H.15(519) or H.15 Daily Update
(or other electronic source) by 3:00 p.m.,
New York City time, on such Calculation Date,
then the Federal Funds Rate on such Federal
Funds Interest Determination Date will be
calculated by the Calculation Agent (after
consultation with the Company) and will be
the average of the rates as of 9:00 a.m., New
York City time, on such Federal Funds
Interest Determination Date for the last
transaction in overnight Federal Funds
arranged by three leading brokers of Federal
Funds transactions in The City of New York
selected by the Calculation Agent (after
consultation with the Company); provided,
however, that if fewer than three brokers
selected as described above by the
Calculation Agent are quoting as mentioned in
this sentence, the Federal Funds Rate with
respect to such Federal Funds Interest
Determination Date will be the Federal Funds
Rate in effect on such Federal Funds Interest
Determination Date or, if no such rate is in
effect, the interest rate on Federal Funds
Notes will be the Initial Interest Rate.
Prime Rate Unless otherwise indicated in the applicable
Notes: Pricing Supplement, "Prime Rate" means, for
any Prime Interest Determination Date, the
rate published in H.15(519) for such date
opposite the caption "Bank Prime Loan", or,
if not so published by 3:00 p.m., New York
City time, on the Calculation Date pertaining
to such Prime Interest Determination Date,
the Prime Rate will be calculated by the
Calculation Agent and will be the arithmetic
mean of the rates of interest publicly
announced by each bank that appears on the
Reuters Screen US Prime 1 as such bank's
prime rate or base lending rate as in effect
for such Prime Interest Determination Date as
quoted on the Reuters Screen US Prime 1 on
such Prime Interest Determination Date, or,
if fewer than four such rates appear on the
Reuters Screen US Prime 1 for such Prime
Interest Determination Date, the rate shall
be the arithmetic mean of the prime rates
quoted on the basis of the actual number of
days in the year divided by 360 as of the
close of business on such Prime Interest
Determination Date by three major money
center banks in The City of New York selected
by the Calculation Agent (after consultation
with the Company) from which quotations are
requested; provided, however, that if the
Prime Rate is not published in H.15(519) or
H.15 Daily Update and the banks selected as
aforesaid are not quoting as mentioned in
this sentence, the Prime Rate with respect to
such Prime Interest Determination Date will
be the interest rate otherwise in effect on
such Prime Interest Determination Date or, if
no such rate is in effect, the interest rate
on Prime Rate Notes will be the Initial
Interest Rate.
The term "Reuters Screen US Prime 1" means
the display designated as page "US Prime" on
the Reuters Monitor Money Rates Service (or
such other page as may replace page US Prime
on that service for the purpose of displaying
prime rates or base lending rates of major
United States banks).
Record Dates: Interest payments on Floating Rate Notes will
be made on each Interest Payment Date to the
registered owners at the close of business on
the date 15 calendar days (whether or not a
Business Day) prior to such Interest Payment
Date (the "Regular Record Date"). Unless
otherwise specified in the applicable Pricing
Supplement, if a Note is issued between a
Regular Record Date and an Interest Payment
Date, the first payment of Interest will be
made on the Interest Payment Date following
the next succeeding Regular Record Date to
the registered holder on such next succeeding
Regular Record Date. Interest payable at
Maturity or upon redemption or repayment
(whether or not such maturity, redemption or
repayment date is an Interest Payment Date)
will be paid to the same person to whom
principal is payable. Interest will begin to
accrue on the original issue date of a Note
for the first interest period and from and
including the most recent Interest Payment
Date to which interest has been paid for all
subsequent interest periods. Each payment of
interest shall include interest accrued from
and including the most recent date in respect
of which interest has been paid or duly
provided for, or from and including the date
of original issue, through the day before,
but excluding, the Interest Payment Date (the
maturity date, the redemption date or the
repayment date, as applicable) (an "Interest
Period"). In the case of Floating Rate Notes
on which the interest rate is reset daily or
weekly, the interest payments shall include
interest accrued from but excluding the most
recent Regular Record Date in respect of
which interest has been paid or duly provided
for, or from and including the date of issue,
to and including the Regular Record Date next
preceding the applicable Interest Payment
Date, except that the interest payment at the
maturity date, redemption date or repayment
date will include interest accrued to, but
excluding, such date.
Accrued Unless otherwise indicated in the applicable
Interest: Pricing Supplement, interest payments for
Floating Rate Notes will include interest
accrued from and including the most recent
date in respect of which interest has been
paid or duly provided for, or from and
including the date of issuance to but
excluding the next Interest Payment Date (or
maturity date, redemption date or repayment
date). Accrued interest from the date of
original issue or from the last date to which
interest has been paid is calculated by
multiplying the face amount of a Note by an
accrued interest factor. This accrued
interest factor is computed by adding the
interest factors calculated for each day in
the period for which accrued interest is
being calculated. The interest factor for
each such day is computed by dividing the
interest rate applicable to such date by 360,
in the case of Commercial Paper Rate Notes,
LIBOR Notes, Federal Funds Notes, CD Rate
Notes, Eleventh District Cost of Funds Rate
Notes and Prime Rate Notes, or by the actual
number of days in the year, in the case of
CMT Rate Notes or Treasury Rate Notes.
