<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 1, 1994
BANPONCE CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
COMMONWEALTH OF PUERTO RICO NO. 0-13818 NO. 66-0416582
- - ---------------------------- ----------- -------------------
(State or other jurisdiction (Commission (IRS employer
of incorporation) File Number) Identification No.)
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (809) 765-9800
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(Former name or former address, if changes since last report)
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Item 5. Other Events
The exhibits listed in Item 7 below are hereby incorporated herein by
reference.
Item 7. Financial Statements
and Exhibits
(1) Form of Amendment No. 1, dated as of December 2, 1993,
to Distribution Agreement dated as of October 11, 1991
among BanPonce Financial Corp., BanPonce Corporation,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and CS
First Boston Corporation.
(4)(a) Form of Fixed Rate Medium-Term Note, Series B of BanPonce
Financial Corp., endorsed with the guarantee of BanPonce
Corporation.
(4)(b) Form of Floating Rate Medium-Term Note, Series B of BanPonce
Financial Corp., endorsed with the guarantee of BanPonce
Corporation.
(8) Tax opinion of Sullivan & Cromwell.
(10)(a) Form of Administrative Procedures governing Medium-Term Notes,
Series B, of BanPonce Financial Corp., fully guaranteed by
BanPonce Corporation.
(10)(b) Form of Interest Calculation Agency Agreement, dated August 1,
1994, between BanPonce Financial Corp. and Citibank, N.A.
(23) Consent of Sullivan & Cromwell (included in Exhibit (8)).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BANPONCE CORPORATION
Date: August 4, 1994 By: /s/ Jose Luis Lopez Calderon
----------------------------
Jose Luis Lopez Calderon
Senior Vice President
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Exhibit (1)
AMENDMENT NO. 1 TO DISTRIBUTION AGREEMENT
December 2, 1993
Reference is made to a Distribution Agreement, dated October 11, 1991
(the "Distribution Agreement"), among BanPonce Financial Corp. (the "Company"),
BanPonce Corporation (the "Guarantor") and Merrill Lynch, Pierce, Fenner &
Smith Incorporated and CS First Boston Corporation (each, an "Agent and
collectively, the "Agents") relating to the issue and sale by the Company of
its Medium-Term Notes. The Company, the Corporation and each of the Agents
hereby agree to amend said Distribution Agreement by inserting the following at
the end of Section 1(a) thereof:
It is understood that if from time to time
the Company is approached by a prospective
agent offering to solicit a specific purchase
of Notes, the Company may engage such agent
with respect to such specific purchase,
provided that (i) such agent is engaged on
terms substantially similar (including the
same commission schedule as set forth hereto
as Schedule A) to the applicable terms of
this Agreement and (ii) each Agent is given
notice of such purchase promptly, including
the terms thereof and a copy of the agreement
setting forth the terms of engagement of such
agent by the Company, in each case after the
purchase is agreed to.
Except as otherwise expressly provided herein, the Distribution
Agreement is in all respects ratified and confirmed, and all the terms,
provisions and conditions thereof shall be and remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have cause this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By:
-------------------------------
BANPONCE CORPORATION
By:
-------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------
CS FIRST BOSTON CORPORATION
By:
-------------------------------
2
<PAGE> 1
Exhibit (4)(a)
[Include if this Note is a Global Note -- THIS NOTE IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS NOTE MAY NOT
BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE
NAME OF, ANY PERSON OTHER THAN THE Depository OR A NOMINEE THEREOF AND NO SUCH
TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE. EVERY NOTE AUTHENTICATED AND DELIVERED UPON REGISTRATION OF
TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS NOTE SHALL BE A GLOBAL
SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.]
REGISTERED NO. FXR- CUSIP NO.
BANPONCE FINANCIAL CORP.
MEDIUM-TERM FIXED RATE NOTE, SERIES B
Due Nine Months or More From Date of Issue
Payment of Principal, Premium, if any, and Interest
Guaranteed by
BANPONCE CORPORATION
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: INITIAL DATE ON WHICH THE PRINCIPAL AMOUNT
NOTE IS REPAYABLE AT THE $
OPTION OF THE HOLDER:
ISSUE PRICE: REDEEMABLE ON OR AFTER: MATURITY DATE:
(AT OPTION OF THE COMPANY)
INTEREST RATE PER ANNUM: INITIAL REDEMPTION OLD DEFAULT AMOUNT:
PERCENTAGE: (Only applicable if Note
issued at original issue
discount)
INTEREST PAYMENT DATES: ANNUAL REDEMPTION DEFAULT RATE:
PERCENTAGE REDUCTION: (Only applicable if Note
issued at original issue
discount)
Depository: REGULAR RECORD DATE(S):
(Only applicable if Note is
a Global Note)
OTHER PROVISIONS:
</TABLE>
<PAGE> 2
BANPONCE FINANCIAL CORP., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to_______________________ , or
registered assigns, the principal sum of____________at the office or agency of
the Company maintained for such purpose in the Borough of Manhattan, The City
of New York (the "Paying Agent"), on the maturity date specified above (the
"Maturity Date"), or if such date is not a Business Day (as defined below), the
next succeeding Business Day, in such coin or currency as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest on said principal sum at the rate per annum (computed on the
basis of a 360-day year of twelve 30-day months) specified above, in like coin
or currency, from and including the original issue date of this Note specified
above (the "Original Issue Date") or from and including the most recent
Interest Payment Date to which interest has been duly paid or provided for, on
the Interest Payment Date(s) specified above in each year (each an "Interest
Payment Date") and at Maturity, until the principal sum hereof has been paid or
duly provided for. The first payment of interest on a Note originally issued
between a Regular Record Date and an Interest Payment Date will be due and
payable on the Interest Payment Date following the next succeeding Regular
Record Date to the Holder on such next succeeding Regular Record Date. The
interest so payable on any Interest Payment Date will be paid to the Holder at
the close of business on the Regular Record Date (specified above) next
preceding such Interest Payment Date and interest payable at Maturity will be
paid to the Person to whom said principal sum is payable. Any such interest not
so punctually paid or duly provided for ("Defaulted Interest") will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee referred to on the
reverse hereof, notice whereof shall be given to the Holder of this Note not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner, all as more fully provided in the Indenture (as
defined on the reverse hereof).
Payment of interest on this Note due on any Interest Payment Date
(other than interest on this Note due to the Holder hereof at Maturity) shall
be paid by check mailed to the Person entitled thereto at his last address as
it appears on the Security Register or, if a Depository with
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respect to this Note is specified above or if $10,000,000 aggregate principal
amount of Notes of this series with the Interest Payment Dates specified above
are registered in the name of the Holder hereof, in immediately available funds
by wire transfer to such account as may have been designated by the Person
entitled thereto as set forth herein in time for the paying agent (the "Paying
Agent") under the Indenture to make such payments in accordance with its normal
procedures. Payment of the principal of and any premium and interest on this
Note due to the Holder hereof at Maturity shall be paid in immediately
available funds upon presentation of this Note for surrender at the office or
agency of the Paying Agent in the Borough of Manhattan, The City of New York,
provided that this Note is presented for surrender in time for the Paying Agent
to make such payment in such funds in accordance with its normal procedures.
Any such designation for wire transfer purposes shall be made by filing
the appropriate information with the Trustee at its Corporate Trust Office in
the Borough of Manhattan, The City of New York and, unless revoked by written
notice to the Trustee received on or prior to the Regular Record Date
immediately preceding the applicable Interest Payment Date or the fifteenth
calendar day preceding Maturity shall remain in effect with respect to any
further payments with respect to this Note payable to such Holder.
Any payment of principal, premium or interest on this Note due on any
day which is not a Business Day in The City of New York need not be made on
such day, but may be made on the next succeeding Business Day in The City of
New York with the same force and effect as if made on the due date and no
interest shall accrue for the period from and after such date. "Business Day"
shall mean, as used herein with respect to any particular location, any day,
other than Saturday and Sunday, which is not a day on which banking
institutions in such location are authorized or obligated by law or executive
order to close.
Additional provisions of this Note are contained on the reverse hereof
and such provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Note shall not be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by an
authorized signatory of
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the Trustee or its duly authorized agent under the Indenture referred to on the
reverse hereof.
IN WITNESS WHEREOF, BANPONCE FINANCIAL CORP. has caused this
instrument to be signed by its duly authorized officer, and has caused a
facsimile of its corporate seal to be affixed hereto or imprinted hereon.
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION BANPONCE FINANCIAL CORP.
This Note is one of a designated series
of Debt Securities described in the
Indenture referred to on the reverse
hereof By:
Executive Vice President
CITIBANK, N.A.,
as Trustee,
Attest:
By:
Authorized Signatory Assistant Secretary
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BANPONCE FINANCIAL CORP.
MEDIUM-TERM FIXED RATE NOTE, SERIES B
Due Nine Months or More From Date of Issue
This Note is one of a duly authorized issue of debentures, notes and
other evidences of indebtedness of the Company (hereinafter called the "Debt
Securities"), all unconditionally guaranteed by BanPonce Corporation
(hereinafter called the "Guarantor") and issued or to be issued under and
pursuant to an indenture dated as of October 1, 1991 (hereinafter called the
"Indenture"), duly executed and delivered by the Company and the Guarantor to
Citibank, N.A., as Trustee (hereinafter called the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, duties and immunities thereunder of the Trustee
and the rights thereunder of the Holders of the Debt Securities. As provided
in the Indenture, the Debt Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts,
may mature at different times, may bear interest, if any, at different rates,
may be subject to different redemption provisions, if any, may be subject to
different sinking, purchase or analogous funds, if any, may be subject to
different covenants and events of default, and may otherwise vary as provided
or permitted in the Indenture. This Note is one of a series of the Debt
Securities, which series is limited in aggregate initial offering price of up
to $500,000,000, designated as the Medium-Term Notes, Series B (the "Notes") of
the Company. The Notes may mature at different times, bear interest, if any,
at different rates, be redeemable at different times or not at all, be
repayable at the option of the Holder at different times or not at all, be
issued at an original issue discount, and be denominated in different
currencies.
In case an Event of Default, as defined in the Indenture, with respect
to the Notes shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become, due and payable in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities of each series to
be affected under the Indenture at any time by the Company and
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<PAGE> 6
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Debt Securities at the time Outstanding of each series
to be affected. The Indenture also contains provisions permitting the Holders
of specified percentages in principal amount of the Debt Securities of each
series at the time Outstanding, on behalf of the Holders of all Debt Securities
of such series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
In the event that the Guarantor shall be obligated to pay any
Additional Amounts due to a change in law, regulation or interpretation, the
Company may, at its option, redeem the Note as a whole at a redemption price of
100% of the principal amount thereof (or, if such Note is an original issue
discount note, 100% of the OID Default Amount) together with accrued interest.
If so provided on the face of this Note, this Note may also be
redeemed by the Company on and after the date so indicated on the face hereof;
provided, however, that the first two paragraphs of Section 1103 of the
Indenture shall not apply to this Note, and if less than all of the Notes are
to be redeemed, the Company may select, from Notes that are subject to
redemption pursuant to the terms thereof, the Note or Notes, or portion or
portions thereof, to be redeemed. On and after the date, if any, from which
this Note may be redeemed, this Note may be redeemed in whole or in part, at
the option of the Company at a redemption price equal to the product of the
principal amount of this Note to be redeemed multiplied by the Redemption
Percentage, together with accrued interest, if any, to the date fixed for
redemption. The Redemption Percentage shall initially equal the Initial
Redemption Percentage specified on the face of this Note, and shall decline at
each anniversary of the initial date that this Note is redeemable by the amount
of the Annual Redemption Percentage Reduction specified on the face of this
Note, until the Redemption Percentage is equal to 100%.
If so provided on the face of this Note, this Note will be repayable
in whole or in part in increments of $1,000, provided that the remaining
principal amount of any Note surrendered for partial repayment shall be at
least $1,000, on any Business Day on or after the "Initial Date on
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which the Note is Repayable at the Option of the Holder" (as stated on the face
hereof), at the option of the Holder, at 100% of the principal amount to be
repaid, plus accrued interest, if any, to the repayment date. In order for the
exercise of the option to be effective and the Note to be repaid, the Company
must receive at the applicable address of the Paying Agent set forth below or
at such other place or places of which the Company shall from time to time
notify the Holder of this Note, on or before the thirtieth, but not earlier
than the sixtieth calendar day, or, if such day is not a Business Day, the next
succeeding Business Day, prior to the repayment date, either (i) this Note,
with the form below entitled "Option to Elect Repayment" duly completed, or
(ii) a telegram, telex, facsimile transmission, or letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or a trust company in the United States of America
setting forth (a) the name, address, and telephone number of the Holder of this
Note, (b) the principal amount of this Note and the amount of this Note to be
repaid, (c) a statement that the option to elect repayment is being exercised
thereby, and (d) a guarantee stating that the Paying Agent on behalf of the
Company will receive this Note, with the form below entitled "Option to Elect
Repayment" duly completed, not later than five Business Days after the date of
such telegram, telex, facsimile transmission, or letter (and this Note and form
duly completed are received by the Paying Agent on behalf of the Company by
such fifth Business Day). Any such election shall be irrevocable. The address
to which such deliveries are to be made is Citibank, N.A., Attention:
Corporate Trust Services, 111 Wall Street, New York, New York 10043 (or, at
such other places as the Company shall notify the Holders of the Notes). All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Note for repayment will be determined by the Company, whose
determination will be final and binding.
If this Note is issued with an original issue discount, (i) if an
Event of Default with respect to the Notes shall have occurred and be
continuing, the amount of principal of this Note which may be declared due and
payable in the manner, with the effect and subject to the conditions provided
in the Indenture, shall be determined in the manner set forth under "OID
Default Amount" on the face hereof, and (ii) in the case of a default of
payment in principal upon acceleration, redemption, repayment at the option of
the Holder or at the Maturity Date hereof, in lieu of any interest otherwise
payable, the overdue principal of this Note shall bear interest at a rate of
interest per annum
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<PAGE> 8
equal to the Default Rate stated on the face hereof (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such acceleration, redemption, repayment at the option of the
Holder or Maturity Date, as the case may be, to the date payment has been made
or duly provided for or such default has been waived in accordance with the
terms of the Indenture.
The Notes are issuable in definitive form without coupons in
denominations of $1,000 and integral multiples thereof. Upon due presentment
for registration of transfer of this Note at the office or agency of the
Company maintained for such purpose in the Borough of Manhattan, The City of
New York, a new Note or Notes in authorized denominations for an equal
aggregate principal amount and like tenor will be issued to the transferee in
exchange therefor, subject to the limitations provided in the Indenture and to
the limitations described below if applicable, without charge except for any
tax or other governmental charge imposed in connection therewith.
If this Note is a Global Note (as specified on the face hereof), this
Note is exchangeable only if (x) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for this Global Note or if at any
time the Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (y) the Company in its sole
discretion determines that this Global Note shall be exchangeable for
definitive Notes in registered form or (z) an Event of Default, or an event
which with notice or lapse of time or both would become an Event of Default,
with respect to the Notes represented hereby has occurred and is continuing.
If this Note is exchangeable pursuant to the preceding sentence, it shall be
exchangeable for definitive Notes in registered form, bearing interest (if any)
at the same rate or pursuant to the same formula, having the same date of
issuance, redemption provisions, if any, Maturity Date and other terms and of
differing denominations aggregating a like amount.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the places, at the respective times, at the rate and in the currency herein
prescribed.
The Company, the Guarantor, the Trustee and any paying agent may deem
and treat the Holder hereof as the absolute owner of this Note at such Holder's
address as it appears on the Security Register as kept by the Trustee or
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<PAGE> 9
duly authorized agent of the Company (whether or not this Note shall be
overdue), for the purpose of receiving payment of or on account hereof and for
all other purposes, and neither the Company nor the Guarantor nor the Trustee
nor any Paying Agent shall be affected by any notice to the contrary. All
payments made to or upon the order of such registered Holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for moneys
payable on this Note.
Terms used herein which are defined in the Indenture and are not
defined herein shall have the respective meanings assigned thereto in the
Indenture.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
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GUARANTEE
OF
BANPONCE CORPORATION
BanPonce Corporation (the "Guarantor") hereby unconditionally
guarantees to the Holder of this Security duly authenticated and delivered by
the Trustee, the due and punctual payment of the principal, and premium, if
any, of (including any amount in respect of original issue discount), and
interest, if any (together with any Additional Amounts payable pursuant to the
terms of this Security), on this Security and the due and punctual payment of
the sinking fund payments, if any, and analogous obligations, if any, provided
for pursuant to the terms of this Security, when and as the same shall become
due and payable, whether at Stated Maturity or upon redemption, repayment or
upon declaration of acceleration or otherwise according to the terms of this
Security and of the Indenture. In case of default by the Company in the
payment of any such principal (including any amount in respect of original
issue discount), any premium or interest (together with any Additional Amounts
payable pursuant to the terms of this Security), sinking fund payment, or
analogous obligation, the Guarantor agrees duly and punctually to pay the same.
The Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional
irrespective of any extension of the time for payment of this Security, any
modification of this Security, any invalidity, irregularity or unenforceability
of this Security or the Indenture, any failure to enforce the same or any
waiver, modification, consent or indulgence granted to the Company with respect
thereto by the Holder of this Security or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of
a surety or guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a demand or proceeding first
against the Company, protest or notice with respect to this Security or the
indebtedness evidenced thereby and all demands whatsoever, and covenants that
this guarantee will not be discharged as to this Security except by payment in
full of the principal of (including any amount payable in respect of original
issue discount), and any premium or interest (together with any Additional
Amounts payable pursuant to the terms of this Security), thereon.
The Guarantor irrevocably waives any and all rights to which it may be
entitled, by operation of law or
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<PAGE> 11
otherwise, upon making any payment hereunder (i) to be subrogated to the rights
of a Holder against the Company with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by the Company in respect thereof or (ii)
to receive any payment, in the nature of contribution or for any other reason,
from any other obligor with respect to such payment.
This guarantee shall not be valid or become obligatory for any purpose
with respect to this Security until the certificate of authentication on this
Security shall have been signed by the Trustee.
This guarantee is governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, BanPonce Corporation has caused this guarantee to
be signed by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
BANPONCE CORPORATION
By:
Executive Vice President
By:
Vice President
Attested:
Assistant Secretary
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<PAGE> 12
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the repayment date, to the undersigned, at
________________________________________________________________________________
________________________________________________________________________________
(Please print or type name and address of the undersigned)
For this Note to be repaid the Company must receive at the Corporate
Trust Office of the Trustee in The City of New York or at such other place or
places of which the Company shall from time to time notify the Holder of the
within Note, on or before the thirtieth, but not earlier than the sixtieth,
calendar day, or, if such day is not a Business Day, the next succeeding
Business Day, prior to the repayment date, (i) this Note, with this "Option to
Elect Repayment" form duly completed, or (ii) a telegram, telex, facsimile
transmission, or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a
trust company in the United States of America setting forth (a) the name,
address, and telephone number of the Holder of the Note, (b) the principal
amount of the Note and the amount of the Note to be repaid, (c) a statement
that the option to elect repayment is being exercised thereby, and (d) a
guarantee stating that the Note to be repaid with this form duly completed will
be received by the Paying Agent on behalf of the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission,
or letter (and such Note and form duly completed are received by the Paying
Agent on behalf of the Company by such fifth Business Day). Exercise of the
repayment option by the Holder shall be irrevocable.
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof (which shall be an integral multiple of
$1,000) which the Holder elects to have repaid:___________________; and
specify the denomination or denominations (which shall be $1,000 or an integral
multiple thereof) of the Note or Notes to be issued to the Holder for the
portion of the within Note not being repaid (in the absence of any
specification, one such Note will be issued for the portion not being
repaid):_______________________
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<PAGE> 13
Date:_____________________
____________________________________________________________________________
Notice: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of the Note in every particular without
alteration or enlargement or any other change whatsoever.
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<PAGE> 14
----------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- Custodian
TEN ENT -- as tenants by the ---- -------
entireties (Cust) (Minor)
JT TEN -- as joint tenants with
right of survivorship Under Uniform Gifts to Minors Act
and not as tenants
in common -----------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
/ /
-------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
the within Note of BANPONCE FINANCIAL CORP. and does hereby irrevocably
constitute and appoint
- - -------------------------------------------------------------------------------
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
Dated:
------------------- --------------------------------------
--------------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatsoever.
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<PAGE> 1
Exhibit (4)(b)
[Include if this Note is a Global Note -- THIS NOTE IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS NOTE MAY NOT
BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE
NAME OF, ANY PERSON OTHER THAN THE Depository OR A NOMINEE THEREOF AND NO SUCH
TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE. EVERY NOTE AUTHENTICATED AND DELIVERED UPON REGISTRATION OF
TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS NOTE SHALL BE A GLOBAL
SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.]
REGISTERED NO. FLR- CUSIP NO.
BANPONCE FINANCIAL CORP.
MEDIUM-TERM FLOATING RATE NOTE, SERIES B
Due Nine Months or More From Date of Issue
Payment of Principal, Premium, if any, and Interest
Guaranteed by
BANPONCE CORPORATION
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE: PRINCIPAL AMOUNT
$
MATURITY DATE: INTEREST RATE BASIS: INDEX MATURITY:
IF LIBOR:
[ ] LIBOR REUTERS SPREAD: +
REDEEMABLE ON OR AFTER [ ] LIBOR TELERATE -
(AT OPTION OF THE COMPANY): INDEX CURRENCY:
IF THE CMT RATE: INTEREST PAYMENT PERIOD:
INITIAL REDEMPTION [ ] 7055
PERCENTAGE: [ ] 7052 INTEREST RATE RESET
MATURITY INDEX: PERIOD:
MAXIMUM INTEREST RATE:
Depository:
INITIAL DATE ON WHICH THE SPREAD MULTIPLIER:
NOTE IS REPAYABLE AT THE (Only applicable if this Note
OPTION OF THE HOLDER: ANNUAL REDEMPTION is a Global Note)
PERCENTAGE REDUCTION:
INTEREST PAYMENT DATES:
MINIMUM INTEREST RATE:
INTEREST CALCULATION DATES:
(If other than ten calendar CALCULATION AGENT:
days after the Interest
Determination Date)
OTHER PROVISIONS:
</TABLE>
<PAGE> 2
BANPONCE FINANCIAL CORP., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to________________________
____________________________________________________, or registered assigns,
the principal sum of _____________________________________________ at the
office or agency of the Company maintained for such purposes in the Borough of
Manhattan, The City of New York (the "Paying Agent"), on the maturity date
shown above (the "Maturity Date"), or if such date is not a Business Day, the
next succeeding Business Day, in such coin or currency as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest commencing with the first Interest Payment Date specified above
following the Original Issue Date specified above or from and including the
most recent Interest Payment Date to which interest has been duly paid or
provided for monthly, quarterly, semi-annually or annually as specified above
under "Interest Payment Period", on the Interest Payment Dates specified above
and at Maturity, on said principal sum at said offices or agencies, in like
coin or currency, at a rate per annum equal to the Initial Interest Rate
specified above until the first Interest Reset Date following the Original
Issue Date specified above and thereafter at a rate per annum determined in
accordance with the provisions on the reverse hereof under the heading
"Determination of Interest Rate Per Annum for Certificate of Deposit Rate
Notes", "Determination of Interest Rate Per Annum for Commercial Paper Rate
Notes", "Determination of Interest Rate Per Annum for CMT Rate", "Determination
of Interest Rate Per Annum for Eleventh District Cost of Funds Rate Notes",
"Determination of Interest Rate Per Annum for Federal Funds Rate Notes",
"Determination of Interest Rate Per Annum for LIBOR Notes", "Determination of
Interest Rate Per Annum for Prime Rate Notes" or "Determination of Interest
Rate Per Annum for Treasury Rate Notes", depending upon whether the Interest
Rate Basis specified above is Certificate of Deposit Rate, Commercial Paper
Rate, CMT Rate, Eleventh District Cost of Funds Rate, Federal Funds Rate,
LIBOR, Prime Rate or Treasury Rate; provided, however, that if any Interest
Payment Date specified above would otherwise fall on a day that is not a
Business Day (as defined herein), such Interest Payment Date will be the next
succeeding Business Day, except that in the event that the Interest Rate Basis
for this Note is LIBOR, if such day falls in the next calendar month, such
Interest Payment Date will be the next preceding day that is a Business Day.
Interest on this Note shall accrue (a) if the rate at which interest on this
Note is payable shall be adjusted monthly, quarterly, semi-annually or
annually, as specified above
-2-
<PAGE> 3
under "Interest Rate Reset Period" and as determined in accordance with the
provisions on the reverse hereof, from the Interest Payment Date next preceding
the date of this Note to which interest has been paid, unless the date hereof
is an Interest Payment Date to which interest has been paid, in which case from
the date of this Note, or unless no interest has been paid on this Note, in
which case from the Original Issue Date specified above, until the principal
sum hereof has been paid or duly provided for or (b) if the rate at which
interest on this Note is payable shall be adjusted daily or weekly, as
specified above under "Interest Rate Reset Period" and as determined in
accordance with the provisions on the reverse hereof, from the Regular Record
Date (as defined herein) next preceding the date of this Note through which
interest has been paid, unless the date hereof is a Regular Record Date through
which interest has been paid, in which case from the day after the date of this
Note, or unless no interest has been paid on this Note, in which case from the
Original Issue Date specified above, until the principal sum hereof has been
paid or duly provided for; provided, however, that if the Original Issue Date
is after any Regular Record Date preceding any Interest Payment Date and before
such Interest Payment Date, interest on this Note shall accrue from such
Interest Payment Date unless the rate at which interest on this Note is payable
shall be adjusted daily or weekly, as provided above under "Interest Rate Reset
Period" and as determined in accordance with the provisions on the reverse
hereof, in which case interest on this Note shall accrue from such Regular
Record Date, or, in either case, if no interest has been paid on this Note,
from the Original Issue Date specified above. The interest so payable on any
Interest Payment Date will be paid to the Holder at the close of business on
the Regular Record Date next preceding such Interest Payment Date, and interest
payable at Maturity will be paid to the Person to whom said principal sum is
payable; provided, however, that the first payment of interest on a Note
originally issued between a Regular Record Date and an Interest Payment Date
will be made on the Interest Payment Date following the next succeeding Regular
Record Date to the Holder on such next succeeding Regular Record Date. Any
such interest not so punctually paid or duly provided for ("Defaulted
Interest") will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Note (or
one or more predecessor Notes) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee referred to on the reverse hereof, notice whereof shall be given to
the Holder of this Note not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner, all as more fully
-3-
<PAGE> 4
provided in the Indenture (as defined on the reverse hereof). "Regular Record
Date" shall mean the fifteenth day, whether or not such date shall be a
Business Day, prior to any Interest Payment Date. "Business Day" shall mean,
as used herein with respect to any particular location, any day, other than a
Saturday or Sunday, which is (a) not a day on which banking institutions in
such location are authorized or obligated by law or executive order to close
and (b), in the event that the Interest Rate Basis for this Note is LIBOR, a
London Banking Day. "London Banking Day" shall mean any day on which dealings
in deposits in U.S. dollars are transacted in the London interbank market.
Payment of interest on this Note due on any Interest Payment Date
(other than interest on this Note due to the Holder hereof at Maturity) shall
be made by check mailed to the Person entitled thereto at his last address as
it appears on the Security Register or, if a Depository with respect to this
Note is specified above or if $10,000,000 aggregate principal amount of Notes
of this series with the Interest Payment Dates specified above are registered
in the name of the Holder hereof, in immediately available funds by wire
transfer to such account as may have been appropriately designated by the
Person entitled thereto as set forth herein in time for the Paying Agent to
make such payment in such funds in accordance with its normal procedures.
Payment of the principal of, and any premium and interest on this Note due to
the Holder hereof at Maturity shall be made in immediately available funds upon
presentation of this Note at the office or agency of the Paying Agent in the
Borough of Manhattan, The City of New York, provided that this Note is
presented for surrender in time for the Paying Agent to make such payment in
such funds in accordance with its normal procedures.
Any such designation for wire transfer purposes shall be made by
filing the appropriate information with the Paying Agent at its Corporate Trust
Office or agency in the Borough of Manhattan, The City of New York and, unless
revoked by written notice to the Paying Agent received on or prior to the
Regular Record Date immediately preceding the applicable Interest Payment Date
or the fifteenth day preceding Maturity, shall remain in effect with respect to
any further payments with respect to this Note payable to such Holder.
If any Interest Payment Date with respect to this Note would otherwise
fall on a day that is not a Business Day such Interest Payment Date shall be
postponed to the next day that is a Business Day
-4-
<PAGE> 5
provided, however, that in the event that the Interest Rate Basis for this Note
is LIBOR, if such Business Day falls in the next succeeding calender month,
such payment shall be made on the immediately preceding Business Day. If the
date of Maturity of this Note would fall on a day that is not a Business Day,
the payment of principal, premium, if any, and interest shall be made on the
next succeeding Business Day, and no interest on such payment shall accrue for
the period from and after Maturity.
Additional provisions of this Note are contained on the reverse hereof
and such provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Note shall not be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by an
authorized signatory of the Trustee or its duly authorized agent under the
Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, BANPONCE FINANCIAL CORP. has caused this instrument
to be signed by its duly authorized officer, and has caused a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION BANPONCE FINANCIAL CORP.
This Note is one of a designated series
of Debt Securities described in the
Indenture referred to on the reverse
hereof By:
Executive Vice President
CITIBANK, N.A.,
as Trustee,
Attest:
By:
Authorized Signatory Assistant Secretary
-5-
<PAGE> 6
BANPONCE FINANCIAL CORP.
MEDIUM-TERM FLOATING RATE NOTE, SERIES B
Due Nine Months or More From Date of Issue
This Note is one of a duly authorized issue of debentures, notes or
other evidences of indebtedness of the Company (hereinafter called the "Debt
Securities"), all unconditionally guaranteed by BanPonce Corporation
(hereinafter called the "Guarantor") and issued or to be issued under and
pursuant to an indenture dated as of October 1, 1991 (hereinafter called the
"Indenture"), duly executed and delivered by the Company and the Guarantor to
Citibank, N.A., as Trustee (hereinafter called the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, duties and immunities thereunder of the Trustee
and the rights thereunder of the Holders of the Debt Securities. As provided
in the Indenture, the Debt Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts,
may mature at different times, may bear interest, if any, at different rates,
may be subject to different redemption provisions, if any, may be subject to
different sinking, purchase or analogous funds, if any, may be subject to
different covenants and events of default, and may otherwise vary as provided
or permitted in the Indenture. This Note is one of a series of the Debt
Securities, which series is limited in aggregate initial offering price of up
to $500,000,000, designated as the Medium-Term Notes, Series B (the "Notes")
of the Company. The Notes may mature at different times, bear interest, if
any, at different rates, be redeemable at different times or not at all, be
repayable at the option of the Holder at different times or not at all, and be
denominated in different currencies.
The interest rate in effect from the date of issue to the first
Interest Reset Date shall be the Initial Interest Rate specified on the face
hereof. Commencing with the first Interest Reset Date following the Original
Issue Date specified on the face hereof, the rate at which interest on this
Note is payable shall be adjusted daily, weekly, monthly, quarterly,
semi-annually or annually as specified on the face hereof under "Interest Rate
Reset Period". Each such adjusted rate shall be applicable from and including
the Interest Reset Date to which it relates but not including the next
succeeding Interest Reset Date or until Maturity, as the case may be. Subject
to applicable provisions of law and except as specified herein, on each
-6-
<PAGE> 7
Interest Reset Date, the rate of interest on this Note shall be the rate
determined with respect to the Interest Determination Date next preceding such
Interest Reset Date in accordance with the provisions of the applicable heading
below.
If the Interest Rate Basis specified on the face of this Note is the
Certificate of Deposit Rate, Commercial Paper Rate, CMT Rate, Federal Funds
Rate or Prime Rate, the Interest Determination Date with respect to any
Interest Reset Date shall be the second Business Day immediately preceding such
Interest Reset Date. If the Interest Rate Basis specified on the face hereof
is the Treasury Rate, the Interest Determination Date with respect to any
Interest Reset Date shall be the day of the week in which such Interest Reset
Date falls on which Treasury bills are auctioned; provided, however, that if,
as a result of a legal holiday, an auction with respect to any week is held on
the preceding Friday, such Friday shall be the Interest Determination Date with
respect to the Interest Reset Date occurring in the next succeeding week. If
the Interest Rate Basis specified on the face of this Note is the Eleventh
District Cost of Funds Rate, the Interest Determination Date with respect to
any Interest Reset Date shall be the last Business Day of the month immediately
preceding such Interest Reset Date on which the Federal Home Loan Bank of San
Francisco publishes the Eleventh District Cost of Funds Index (as defined
below). If the Interest Rate Basis specified on the face of this Note is
LIBOR, the Interest Determination Date with respect to any Interest Reset Date
shall be the second London Banking Day preceding such Interest Reset Date.
If the Interest Rate Reset Period specified on the face hereof is
daily, the Interest Reset Dates with respect to this Note shall be each
Business Day. If the Interest Rate Reset Period specified on the face of this
Note is weekly, the Interest Reset Dates with respect to this Note shall be
Wednesday of each week; provided, however, that if the Interest Rate Basis
specified on the face of this Note is the Treasury Rate, the Interest Reset
Dates with respect to this Note shall be Tuesday of each week. If the Interest
Rate Reset Period specified on the face of this Note is monthly, the Interest
Reset Dates with respect to this Note shall be the third Wednesday of each
month; provided, however, if the Interest Rate Basis specified on the face of
this Note is the Eleventh District Cost of Funds Rate, the Interest Reset Date
with respect to this Note shall be the first Business Day of each month. If
the Interest Rate Reset Period specified on the face of this Note is quarterly,
the Interest Reset Dates with respect to this
-7-
<PAGE> 8
Note shall be the third Wednesday of March, June, September and December of
each year. If the Interest Rate Reset Period specified on the face of this
Note is semi-annual, the Interest Reset Dates with respect to this Note shall
be the third Wednesday of the two months in each year specified on the face
hereof under Interest Rate Reset Period. If the Interest Rate Reset Period
specified on the face of this Note is annual, the Interest Rate Reset Dates
with respect to this Note shall be the third Wednesday of the month in each
year specified on the face hereof under Interest Rate Reset Period.
Notwithstanding the foregoing, if the Interest Rate Basis specified on the face
hereof is Treasury Rate and any Interest Reset Date with respect to this Note
falls on a day on which Treasury bills are to be auctioned, then such Interest
Reset Date shall be postponed to the next succeeding Business Day. If any
Interest Reset Date with respect to this Note would otherwise be a day that is
not a Business Day, such Interest Reset Date shall be postponed to the next
succeeding Business Day; provided, however, if the Interest Rate Basis
specified on the face hereof is LIBOR, if such next succeeding Business Day is
in the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. Unless otherwise specified on the face
hereof, the Calculation Date with respect to any Interest Determination Date
shall be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or if any such day is not a Business Day (as defined in the
Indenture) the next succeeding Business Day or (ii) the Business Day preceding
the applicable Interest Payment Date or Maturity, as the case may be.
Determination of Interest Rate Per Annum for Certificate of Deposit
Rate Notes. If the Interest Rate Basis specified on the face hereof is
Certificate of Deposit Rate, the Interest Rate per annum determined with
respect to any Interest Determination Date shall equal the rate on such date,
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, and/or by multiplication by the Spread Multiplier, if any,
specified on the face hereof and calculated to the nearest one hundred-
thousandth of a percentage point, with five one-millionths of a percentage
point rounded upwards, for negotiable certificates of deposit having the Index
Maturity specified on the face hereof 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 of the Board of Governors of the Federal
Reserve System ("H.15(519)") under the heading "CDs (Secondary Market)." In
the event that such rate is not published prior to 3:00 P.M., New York City
time, on the Calculation Date with respect to such Interest Determination Date,
then the
-8-
<PAGE> 9
Certificate of Deposit Rate with respect to such Interest Reset Date shall be
the rate (adjusted and/or multiplied and calculated as described above) on such
Interest Determination Date for negotiable certificates of deposit having the
Index Maturity specified on the face hereof as published by the Federal Reserve
Bank of New York in its daily statistical release, "Composite 3:30 P.M.
Quotations for U.S. Government Securities," or any successor publication of the
Federal Reserve Bank of New York ("Composite Quotations"), under the heading
"Certificates of Deposit." If by 3:00 P.M., New York City time, on the
Calculation Date with respect to such Interest Determination Date such rate is
not published in either H.15(519) or Composite Quotations, the Certificate of
Deposit Rate with respect to such Interest Determination Date shall be
calculated by the Calculation Agent and shall be the arithmetic mean (adjusted
and/or multiplied and calculated as described above) of the secondary market
offered rates, as of 10:00 A.M., New York City time, on such Interest
Determination Date, of three leading nonbank dealers of negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money
center banks (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the Index Maturity, specified on the face hereof
in denominations of U.S. $5,000,000; provided, however, that, if fewer than
three dealers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Certificate of Deposit Rate with respect to
such Interest Determination Date will be the Certificate of Deposit Rate in
effect on such Interest Determination Date.
Determination of Interest Rate Per Annum for Commercial Paper Rate
Notes. If the Interest Rate Basis specified on the face hereof is Commercial
Paper Rate, the interest rate per annum determined with respect to any Interest
Determination Date shall equal (a) the Money Market Yield (as defined herein)
of the rate on such Interest Determination Date for commercial paper having the
Index Maturity specified on the face hereof, (i) as such rate is published in
H.15(519), under the heading "Commercial Paper," or (ii) if such rate is not so
published on or prior to 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, as published in Composite
Quotations, under the heading "Commercial Paper," or (b) if by 3:00 P.M., New
York City time, on the Calculation Date with respect to such Interest
Determination Date, such rate is not published in either of such publications,
the Money Market Yield of the arithmetic mean of the offered rates, as of 11:00
A.M., New York City time,
-9-
<PAGE> 10
on such Interest Determination Date, of three leading dealers in commercial
paper in The City of New York selected by the Calculation Agent for commercial
paper having the Index Maturity specified on the face hereof placed for
industrial issuers whose bond rating is "AA," or the equivalent, from a
nationally recognized rating agency, in each of the above cases, adjusted by
the addition or subtraction of the Spread, if any, specified on the face
hereof, and/or by multiplication by the Spread Multiplier, if any, specified on
the face hereof and calculated to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upwards; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting rates as described above, the
interest rate per annum hereon with respect to such Interest Determination Date
shall be the Commercial Paper Rate in effect hereon on such Interest
Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = 100 x 360 x D
---------------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal calculated to seven decimal places,
without rounding; and "M" refers to the actual number of days in the interest
period for which interest is being calculated.
Determination of Interest Rate Per Annum for CMT Rate Notes. If the
Interest Rate Basis specified on the face hereof is CMT Rate, the Interest Rate
per annum determined with respect to any Interest Determination Date shall
equal the rate displayed on the Designated CMT Telerate Page (as defined
herein) 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 (as defined herein) for (i) if the
Designated CMT Telerate Page is 7055, the rate on such 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
Interest Determination Date occurs. If such rate is no longer displayed on the
relevant page, or if not displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as
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<PAGE> 11
published in the relevant H.15(519). If such rate is no longer published, or
if not published by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate for the Interest Determination Date will be such
treasury constant maturity rate for the Designated CMT Maturity Index (or other
United States Treasury rate for the Designated CMT Maturity Index) for the
Interest Determination Date with respect to such 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 for such 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 the Interest Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers (each, a "Reference Dealer") in The City
of New York 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 cannot obtain three such Treasury
Note quotations, the CMT Rate for such 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 offer side prices as of
approximately 3:30 P.M., New York City time, on the 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 closest 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
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<PAGE> 12
highest nor the lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers selected by the Calculation Agent
are quoting as described herein, the CMT Rate will be the CMT Rate in effect on
such Interest Determination Date. If two Treasury Notes with an original
maturity as described in the third preceding sentence have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated above (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,
the Designated CMT Telerate Page shall be 7052, for the most recent week.
"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 on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified, the Designated CMT Maturity
Index shall be 2 years.
Determination of Interest Rate Per Annum for Eleventh District Cost of
Funds Notes. If the Interest Rate Basis specified on the face hereof is
Eleventh District Cost of Funds, the interest rate per annum determined with
respect to any Interest Determination Date shall be the rate equal to the
monthly weighted average cost of funds for the calendar month immediately
preceding the month in which such 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 Interest Determination Date. If such rate does not
appear on Telerate Page 7058 on any related Interest Determination Date, the
Eleventh District Cost of Funds Rate for such Interest Determination Date shall
be the monthly weighted average cost of funds paid by member institutions of
the Eleventh Federal Home Loan Bank District that was most recently announced
(the "Index") by the FHLB of San Francisco as such cost of funds for the
calendar month immediately preceding the date of such announcement. If the
FHLB of San Francisco fails to announce such rate for the calendar month
immediately preceding such Interest Determination Date, then the Eleventh
District Cost of Funds Rate determined as of the Interest Determination Date
will be the Eleventh District Cost of Funds Rate in effect on such Interest
Determination
-12-
<PAGE> 13
Date. In determining that the Federal Home Loan Bank of San Francisco has
failed in any month to publish the Eleventh District Cost of Funds Index, the
Calculation Agent may conclusively rely on any written advice of the Federal
Home Loan Bank of San Francisco to such effect.
Determination of Interest Rate Per Annum for Federal Funds Rate Notes.
If the Interest Rate Basis specified on the face hereof is Federal Funds Rate,
the interest rate per annum determined with respect to any Interest
Determination Date shall equal the rate, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, and/or by
multiplication by the Spread Multiplier, if any, specified on the face hereof
and calculated to the nearest one hundred-thousandth of a percentage point,
with five one-millionths of a percentage point rounded upwards, on such
Interest Determination Date for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)." In the event that such rate is not so
published prior to 3:00 P.M., New York City time, on the Calculation Date with
respect to such Interest Determination Date, then the Federal Funds Rate with
respect to such Interest Determination Date will be the rate (adjusted or
multiplied and calculated as described above) on such Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If by 3:00 P.M., New York City time, on the Calculation
Date with respect to such Interest Determination Date such rate is not
published in either H.15(519) or Composite Quotations, the Federal Funds Rate
with respect to such Interest Reset Date shall be calculated by the Calculation
Agent and shall be the arithmetic mean (adjusted and/or multiplied and
calculated as described above) of the rates 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 as of
9:00 A.M., New York City time, on such Interest Determination Date; provided,
however, that if fewer than three brokers selected as aforesaid by the
Calculation Agent are quoting rates as mentioned in this sentence, the Federal
Funds Rate with respect to such Interest Determination Date shall be the
Federal Funds Rate in effect on such Interest Determination Date.
Determination of Interest Rate Per Annum for LIBOR Notes. If the
Interest Rate Basis specified on the face hereof is LIBOR, the interest rate
per annum determined with respect to any Interest Determination Date relating
to a LIBOR Note (a "LIBOR Interest Determination Date") shall equal LIBOR,
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, and/or by
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<PAGE> 14
multiplication by the Spread Multiplier, if any, specified on the face
hereof and calculated to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards,
determined by the Calculation Agent in accordance with the following
provisions: (i) LIBOR will be determined as set forth on the face hereof, as
either (a) the arithmetic mean of the offered rates for deposits in U.S.
dollars having the Index Maturity specified on the face hereof, commencing on
the second London Banking Day immediately following such LIBOR Interest
Determination Date, that appear on the Reuters Screen LIBO Page as of 11:00
A.M., London time, on such 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 specified
on the face hereof, commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date, that appears on Telerate Page
3750 as of 11:00 A.M., London time, on such 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 page LIBO 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 Telerate Service (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 above, LIBOR will be
determined if LIBOR Telerate had been specified. If LIBOR Reuters is specified
above and at least two such offered rates appear on the Reuters Screen LIBO
Page, the rate in respect of such LIBOR Interest Determination Date will be the
arithmetic mean of such offered rates as determined by the Calculation Agent.
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 such
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 for the applicable Index Maturity 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 specified above are offered at approximately
11:00
-14-
<PAGE> 15
A.M., London time, on such LIBOR Interest Determination Date by four major
banks in the London interbank market selected by the Calculation Agent (the
"Reference Banks") to prime banks in the London interbank market, commencing on
the second London Banking Day immediately following such LIBOR Interest
Determination Date and in a principal amount equal to an amount of not less
than U.S. $1 million 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 rates. 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 by 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 for loans in U.S.
dollars to leading European banks, having the Index Maturity specified in the
applicable Pricing Supplement, commencing on the second London Banking Day
immediately following such LIBOR Interest Determination Date and in a principal
amount equal to an amount of not less than U.S. $1 million 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 will be LIBOR in effect on
such LIBOR Interest Determination Date.
Determination of Interest Rate Per Annum for Prime Rate Notes. If the
Interest Rate Basis specified on the face hereof is Prime Rate, Prime Rate
determined with respect to any Interest Determination Date shall equal the rate
adjusted by the addition or subtraction of the spread, if any, specified on the
face hereof, and/or by multiplication by the Spread Multiplier, if any,
specified on the face hereof and calculated to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upwards, set forth in H.15(519) for such date opposite
the caption "Bank Prime Loan." If such rate is not yet published by 9:00 A.M.,
New York City time, on the Calculation Date, the Prime Rate for such Prime Rate
Interest Determination Date will be the arithmetic mean of the rates of
interest publicly announced by each bank named on the Reuters screen NYMF Page
as such bank's prime rate or base lending rate as in effect for such Prime Rate
Interest Determination Date as quoted on the Reuters Screen NYMF Page on such
Prime Rate Interest Determination Date, or, if fewer than four such rates
appear on the Reuters Screen NYMF Page for such Prime Rate Interest
Determination Date, the rate
-15-
<PAGE> 16
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 Rate Interest Determination Date by at least two of the three major
money center banks in The City of New York selected by the Calculation Agent
from which quotations are requested. If fewer than two quotations are
provided, the Prime Rate shall be calculated by the Calculation Agent and shall
be determined as the arithmetic mean of the prime rates quoted in The City of
New York on such date by the approximate number of banks or trust companies
organized and doing business under the laws of the United States, or any State
thereof, each having total equity capital of at least $500 million and being
subject to supervision or examination by a Federal or State authority, selected
by the Calculation Agent to quote such rate or rates; provided, however, that
if the Prime Rate is not published in H.15(519) and the banks or trust
companies selected as aforesaid are not quoting as mentioned in this sentence,
the Prime Rate with respect to such Prime Rate Interest Determination Date will
be the interest rate otherwise in effect on such Prime Rate Interest
Determination Date. "Reuters Screen NYMF Page" means the display designated as
page "NYMF" on the Reuters Monitor Money Rates Service (or such other page as
may replace page NYMF on that service for the purpose of displaying prime rates
or base lending rates of major United States banks).
Determination of Interest Rate Per Annum for Treasury Rate Notes. If
the Interest Rate Basis specified on the face hereof is Treasury Rate, the
interest rate per annum determined with respect to any Interest Determination
Date shall equal the rate adjusted by the addition or subtraction of the
spread, if any, specified on the face hereof, and/or by multiplication by the
Spread Multiplier, if any, specified on the face hereof and calculated to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upwards, for the most recent auction of direct
obligations of the United States ("Treasury bills") having the Index Maturity
specified on the face hereof as published in H.15(519), under the heading
"Treasury bills -- Auction Average (Investment)" or, if not so published by
3:00 P.M., New York City time, on or prior to the Calculation Date pertaining
to such Interest Determination Date, the auction average rate for the
aforementioned auction for such Interest Determination Date (expressed as a
bond equivalent, calculated to the nearest one hundred-thousandth of a
percentage point, rounded upwards, on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) for such auction as otherwise
announced by the United
-16-
<PAGE> 17
States Department of the Treasury, in either case, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, and/or by
multiplication by the Spread Multiplier, if any, specified on the face hereof
and calculated to the nearest one hundred-thousandth of a percentage point,
with five one-millionths of a percentage point rounded upwards. In the event
that the results of the auctions of Treasury bills having the Index Maturity
specified on the face hereof are not published or reported as provided above by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date or if no such auction is held for a particular
week, then the Treasury Rate with respect to such Interest Determination Date
shall be a yield to maturity (expressed as a bond equivalent, calculated to one
hundred-thousandth of a percentage point, without rounding, on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean (adjusted and/or multiplied and calculated as described above)
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent, for the
issue of Treasury bills with a remaining maturity closest to the Index Maturity
specified on the face hereof; provided, however, that if fewer than three
dealers selected as aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Treasury Rate with respect to such Interest Determination
Date shall be the Treasury Rate in effect on such Interest Determination Date.
Notwithstanding the foregoing, the interest rate per annum hereon
shall not be greater than the Maximum Interest Rate, if any, or less than the
Minimum Interest Rate, if any, specified on the face hereof. The Calculation
Agent shall calculate the interest rate hereon in accordance with the foregoing
on or before each Interest Determination Date.
The interest rate on this Note shall 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.
At the request of the Holder hereof, the Calculation Agent will
provide to the Holder hereof the interest rate hereon then in effect and, if
different, the interest rate which will become effective as a result of a
determination made on the most recent Interest Determination Date with respect
to this Note.
-17-
<PAGE> 18
Interest payments hereon will include interest accrued to but excluding
the applicable Interest Payment Date. Accrued Interest hereon from the
Original Issue Date or from the last date to which interest hereon has been
paid, as the case may be, shall be an amount calculated by multiplying the face
amount hereof by an accrued interest factor. Such accrued interest factor
shall be computed by adding the interest factors calculated for each day from
the Original Issue Date or from the last date to which interest shall have been
paid or duly provided for, as the case may be, up to but not including the date
for which accrued interest is being calculated. The interest factor for each
such day shall be computed by dividing the interest rate per annum applicable
to such day by 360 if the Interest Rate Basis specified on the face hereof is
Certificate of Deposit Rate, Commercial Paper Rate, Eleventh District Cost of
Funds Rate, Federal Funds Rate, LIBOR or Prime Rate or by the actual number of
days in the year if the Interest Rate Basis specified on the face hereof is
Treasury Rate or CMT Rate.
In case an Event of Default, as defined in the Indenture, with respect
to the Notes shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become, due and payable in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Debt Securities
of each series to be affected under the Indenture at any time by the Company,
the Guarantor and the Trustee with the consent of the Holders of not less than
a majority in principal amount of the Debt Securities at the time Outstanding
of each series to be affected. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the Debt
Securities of each series at the time Outstanding, on behalf of the Holders of
all Debt Securities of such series, to waive compliance by the Company and the
Guarantor with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
-18-
<PAGE> 19
In the event that the Guarantor shall be obligated to pay any
Additional Amounts due to a change in law, regulation or interpretation, the
Company may, at its option, redeem the Note as a whole at a redemption price of
100% of the principal amount thereof together with accrued interest.
If so provided on the face of this Note, this Note may be redeemed by
the Company on and after the date so indicated on the face hereof; provided,
however, that the first two paragraphs of Section 1103 of the Indenture shall
not apply to this Note, and if less than all of the Notes are to be redeemed,
the Company may select, from Notes that are subject to redemption pursuant to
the terms thereof, the Note or Notes, or portion or portions thereof, to be
redeemed. On and after the date, if any, from which this Note may be redeemed,
this Note may be redeemed in whole or in part, at the option of the Company at
a redemption price equal to the product of the principal amount of this Note to
be redeemed multiplied by the Redemption Percentage together with accrued
interest to the date fixed for redemption. The Redemption Percentage shall
initially equal the Initial Redemption Percentage specified on the face of this
Note, and shall decline at each anniversary of the initial date that this Note
is redeemable by the amount of the Annual Redemption Percentage Reduction
specified on the face of this Note, until the Redemption Percentage is equal to
100%.
If so provided on the face of this Note, this Note will be repayable
in whole or in part in increments of $1,000, provided that the remaining
principal amount of any Note surrendered for partial repayment shall be at
least $1,000, on any Business Day on or after the "Initial Date on which the
Note is Repayable at the Option of the Holder" (as stated on the face hereof),
at the option of the Holder, at 100% of the face amount hereof, plus accrued
interest, if any, to the repayment date. In order for the exercise of the
option to be effective and the Notes to be repaid, the Company must receive at
the applicable address of the Paying Agent set forth below or at such other
place or places of which the Company shall from time to time notify the Holder
of this Note, on or before the thirtieth, but not earlier than the sixtieth
day, or, if such day is not a Business Day, the next succeeding Business Day,
prior to the repayment date, either (i) this Note, with the form below entitled
"Option to Elect Repayment" duly completed, or (ii) a telegram, telex,
facsimile transmission, or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc., or a
commercial bank or a trust company in the United States of America setting
forth (a) the name, address and telephone
-19-
<PAGE> 20
number of the Holder of this Note, (b) the principal amount of this
Note and the amount of this Note to be repaid, (c) a statement that the option
to elect repayment is being exercised thereby, and (d) a guarantee stating that
the Paying Agent on behalf of the Company will receive this Note, with the form
below entitled "Option to Elect Repayment" duly completed, not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (and this Note and form duly completed are received by the Paying Agent
on behalf of the Company by such fifth Business Day). Any such election shall
be irrevocable. The address to which such deliveries are to be made is
Citibank, N.A., Attention: Corporate Trust Services, 111 Wall Street, New York,
New York 10043 (or at such other places as the Company shall notify the Holders
of the Notes). All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Note for repayment will be determined by the
Company, whose determination will be final and binding.
The Notes are issuable in definitive form without coupons in
denominations of $1,000 and integral multiples thereof. Upon due presentment
for registration of transfer of this Note at the office or agency of the
Company maintained for such purposes in the Borough of Manhattan, The City of
New York, a new Note or Notes in authorized denominations for an equal
aggregate principal amount and like tenor will be issued to the transferee in
exchange therefor, subject to the limitations provided in the Indenture and to
the limitations described below, if applicable, without charge except for any
tax or other governmental charge imposed in connection therewith.
If this Note is a Global Note (as specified on the face hereof), this
Note is exchangeable only if (x) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for this Global Note or if at any
time the Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (y) the Company in its sole
discretion determines that this Global Note shall be exchangeable for
definitive Notes in registered form or (z) an Event of Default, or an event
which with notice or lapse of time or both would be an Event of Default, with
respect to the Notes represented hereby has occurred and is continuing. If
this Note is exchangeable pursuant to the preceding sentence, it shall be
exchangeable for definitive Notes in registered form, bearing interest (if any)
at the same rate or pursuant to the same formula, having the same date of
issuance, redemption provisions, if any, Maturity Date and other terms and of
differing denominations aggregating a like amount.
-20-
<PAGE> 21
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the places, at the respective times, at the rate and in the currency herein
prescribed.
The Company, the Guarantor, the Trustee and any paying agent may deem
and treat the registered Holder hereof as the absolute owner of this Note at
such Holder's address as it appears on the Security Register of the Company as
kept by the Trustee or duly authorized agent of the Company (whether or not
this Note shall be overdue), for the purpose of receiving payment of or on
account hereof and for all other purposes, and neither the Company nor the
Guarantor nor the Trustee nor any paying agent shall be affected by any notice
to the contrary. All payments made to or upon the order of such registered
Holder shall, to the extent of the sum or sums paid, effectually satisfy and
discharge liability for moneys payable on this Note.
Terms used herein which are defined in the Indenture and not defined
herein shall have the respective meanings assigned thereto in the Indenture.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
-21-
<PAGE> 22
GUARANTEE
OF
BANPONCE CORPORATION
BanPonce Corporation (the "Guarantor") hereby unconditionally
guarantees to the Holder of this Security duly authenticated and delivered by
the Trustee, the due and punctual payment of the principal, and premium, if
any, of (including any amount in respect of original issue discount) and
interest, if any (together with any Additional Amounts payable pursuant to the
terms of this Security), on this Security and the due and punctual payment of
the sinking fund payments, if any, and analogous obligations, if any, provided
for pursuant to the terms of this Security, when and as the same shall become
due and payable, whether at Stated Maturity or upon redemption, repayment or
upon declaration of acceleration or otherwise according to the terms of this
Security and of the Indenture. In case of default by the Company in the
payment of any such principal, any premium or interest (together with any
Additional Amounts payable pursuant to the terms of this Security), sinking
fund payment, or analogous obligation, the Guarantor agrees duly and punctually
to pay the same. The Guarantor hereby agrees that its obligations hereunder
shall be as principal and not merely as surety, and shall be absolute and
unconditional irrespective of any extension of the time for payment of this
Security, any modification of this Security, any invalidity, irregularity or
unenforceability of this Security or the Indenture, any failure to enforce the
same or any waiver, modification, consent or indulgence granted to the Company
with respect thereto by the Holder of this Security or the Trustee, or any
other circumstances which may otherwise constitute a legal or equitable
discharge of a surety or guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger or bankruptcy of the Company, any right to require a demand or
proceeding first against the Company, protest or notice with respect to this
Security or the indebtedness evidenced thereby and all demands whatsoever, and
covenants that this guarantee will not be discharged as to this Security except
by payment in full of the principal of, and any premium or interest (together
with any Additional Amounts payable pursuant to the terms of this Security),
thereon.
The Guarantor irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, upon making any payment hereunder
(i) to be subrogated to the rights of a Holder against the Company with respect
to such payment or otherwise to be reimbursed,
-22-
<PAGE> 23
indemnified or exonerated by the Company in respect thereof or (ii) to receive
any payment, in the nature of contribution or for any other reason, from any
other obligor with respect to such payment.
This guarantee shall not be valid or become obligatory for any purpose
with respect to this Security until the certificate of authentication on this
Security shall have been signed by the Trustee.
This guarantee is governed by and construed in accordance with the laws
of the State of New York.
IN WITNESS WHEREOF, BanPonce Corporation has caused this guarantee to
be signed by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
BANPONCE CORPORATION
By:
Executive Vice President
By:
Vice President
Attested:
Assistant Secretary
-23-
<PAGE> 24
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the repayment date, to the undersigned, at___________________________________
________________________________________________________________________________
(please print or type name and address of the undersigned).
For this Note to be repaid the Company must receive at the Corporate
Trust Office of the Trustee in The City of New York or at such other place or
places of which the Company shall from time to time notify the Holder of the
within Note, on or before the thirtieth, but not earlier than the sixtieth day,
or, if such day is not a Business Day, the next succeeding Business Day, prior
to the repayment date, (i) this Note, with this "Option to Elect Repayment"
form duly completed, or (ii) a telegram, telex, facsimile transmission, or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or a trust company
in the United States of America setting forth (a) the name, address, and
telephone number of the Holder of the Note, (b) the principal amount of the
Note and the amount of the Note to be repaid, (c) a statement that the option
to elect repayment is being exercised thereby, and (d) a guarantee stating that
the Note to be repaid with this form duly completed will be received by the
Paying Agent on behalf of the Company not later than five Business Days after
the date of such telegram, telex, facsimile transmission or letter (and such
Note and form duly completed are received by the Paying Agent on behalf of the
Company by such fifth Business Day). Exercise of the repayment option by the
Holder is irrevocable.
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof (which shall be an integral multiple of
$1,000) which the Holder elects to have repaid: ______________________; and
specify the denomination or denominations (which shall be $1,000 or an integral
multiple thereof) of the Note or Notes to be issued to the Holder for the
portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid):
____________
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<PAGE> 25
Date: ___________________________
________________________________________________________________________________
Notice: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of the Note in every particular without
alteration or enlargement or any other change whatsoever.
-25-
<PAGE> 26
----------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- Custodian
TEN ENT -- as tenants by the ---- -------
entireties (Cust) (Minor)
JT TEN -- as joint tenants with
right of survivorship Under Uniform Gifts to Minors Act
and not as tenants
in common -----------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
/ /
-------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
the within Note of BANPONCE FINANCIAL CORP. and does hereby irrevocably
constitute and appoint
- - --------------------------------------------------------------------------------
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
Dated:
------------------- --------------------------------------
--------------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatsoever.
-26-
<PAGE> 1
Exhibit (8)
August 1, 1994
BanPonce Corporation,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
BanPonce Financial Corp.,
c/o CT Corporation,
1209 Orange Street,
Wilmington, Delaware 19801.
Dear Sirs:
We have acted as your counsel in connection with the registration
under the Securities Act of 1933 (the "Act") of up to $500,000,000 aggregate
initial offering price, or the equivalent thereof in other currencies or
currency units, of Medium Term Notes, Series B (the "Notes") of BanPonce
Financial Corp. and the related guarantees thereof (the "Guarantees") by
BanPonce Corporation, and hereby confirm to you our opinion as set forth under
the heading "United States Taxation" in the Prospectus Supplement relating to
the Notes and Guarantees filed under the Act on August 1, 1994.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an exhibit to the Registration Statement and the
reference to us in the above-mentioned Prospectus Supplement under the heading
"United States Taxation". In giving such consent,
<PAGE> 2
BanPonce Corporation
BanPonce Financial Corp.
we do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
/s/ SULLIVAN & CROMWELL
<PAGE> 1
Exhibit (10)(a)
BANPONCE FINANCIAL CORP.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(DATED AS OF AUGUST 1, 1994)
Medium-Term Notes (collectively, the "Notes") in the aggregate
principal amount of up to $500,000,000 are to be offered on a continuous basis
by BanPonce Financial Corp. (the "Company") through Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), CS First
Boston Corporation ("CS First Boston") and First Chicago Capital Markets, Inc.
("First Chicago") who, as agents (each an "Agent"), have agreed to use their
reasonable efforts to solicit offers to purchase the Notes from the Company.
The Agents also may purchase Notes as principal for resale.
The Notes are being sold pursuant to a Distribution Agreement among
the Company, BanPonce Corporation (the "Guarantor") and the Agents, dated
October 11, 1991, as amended on December 2, 1993 and supplemented on June 16,
1993 and August 1, 1994 (the "Distribution Agreement"). The Notes will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest by the Guarantor (the "Guarantees"). The Notes and related Guarantees
will be issued pursuant to the Indenture (the "Indenture"), dated as of October
1, 1991, among the Company, the Guarantor and Citibank, N.A., as trustee (the
"Trustee"). A Registration Statement (the "Registration Statement", which term
shall include any additional registration statements filed in connection with
the Notes and related Guarantees as provided in the Distribution Agreement)
with respect to the Notes and related Guarantees has been filed with the
Securities and Exchange Commission (the "Commission"). The most recent base
Prospectus included in the Registration Statement, as supplemented with respect
to the Notes and related Guarantees, is herein referred to as the "Prospectus".
The most recent supplement to the Prospectus with respect to the specific
terms of the Notes is herein referred to as the "Pricing Supplement."
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered to
the appropriate Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated
form (each, a "Certificated Note") delivered to the purchaser thereof or a
person designated by such purchaser. Owners of beneficial interests in
Book-Entry Notes will be entitled to physical delivery of Certificated Notes
equal in principal amount to their respective beneficial interests only upon
certain limited circumstances described in the Prospectus.
<PAGE> 2
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in Part III hereof.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/Authentication: Each Note will be dated as
of the date of its
authentication by the Trustee
or its duly appointed
authenticating agent. Each
Note shall also bear an
original issue date (the
"Original Issue Date"). The
Original Issue Date shall
remain the same for all
Notes subsequently issued
upon transfer, exchange or
substitution of an original
Note regardless of their
dates of authentication.
Maturities: Each Note will mature on a
date selected by the
purchaser and agreed to
by the Company which is not
less than nine months nor
more than thirty years from
its Original Issue Date;
provided, however, that Notes
bearing interest at rates
determined by reference to
selected indices ("Floating
Rate Notes") will mature on
an Interest Payment Date.
Currencies: Each Note shall be
denominated in one of the
currencies or currency units,
as specified in the relevant
Pricing Supplement, or in
such other currency or
currency unit as may be
agreed from time to time
between the Company and each
Agent and as specified in the
relevant Pricing Supplement,
or, if no currency or
currency unit is specified
therein, in U.S. dollars.
Notes denominated in one or
more currencies or currency
units other than in U.S.
dollars are herein referred
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<PAGE> 3
to as "Multi-Currency Notes." Notes
that have the amount of principal
payments determined by reference to
an index currency are herein
referred to as "Indexed Notes."
Denominations: The Notes will be issued in
denominations of $1,000 and integral
multiples thereof. Any Notes
denominated other than in U.S.
dollars will be issuable in
denominations as set forth in the
relevant Multi-Currency and Indexed
Note Prospectus Supplement. For
special provisions relating to
Multi-Currency Notes and Indexed
Notes, see the related Multi-
Currency and Indexed Note
Supplement.
Registration: Notes will be issued only in fully
registered form.
Redemption/Repayment: The Notes will be subject to
repayment at the option of the
Holders thereof in accordance with
the terms of the Notes on their
respective Optional Repayment Dates,
if any. Optional Repayment Dates,
if any, will be fixed at the time of
sale and set forth in the applicable
Pricing Supplement and in the
applicable Note. If no Optional
Repayment Dates are indicated with
respect to a Note, such Note will
not be repayable at the option of
the Holder prior to Maturity.
The Notes will be subject to
redemption by the Company on and
after their respective Initial
Redemption Dates, if any. Initial
Redemption Dates, if any, will be
fixed at the time of sale and set
forth in the applicable Pricing
Supplement and in the applicable
Note. If no Initial Redemption
Dates are indicated with respect to
a Note, such Note will not be
redeemable prior to Maturity.
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<PAGE> 4
Calculation of
Interest: In the case of Fixed Rate Notes,
interest (including payments for
partial periods) will be calculated
and paid on the basis of a 360-day
year of twelve 30-day months. In
the case of Floating Rate Notes,
interest will be calculated and
paid on the basis of the actual
number of days in the interest
period divided by 360 with the
exception of Treasury Rate Notes
for which interest will be
calculated on the basis of the
actual number of days in the
interest period divided by the
actual number of days in the year.
If an Interest Payment Date with
respect to any Fixed Rate Note
falls on a day that is not a
Business Day (as hereinafter
defined), the payment of interest
required to be made on such
Interest Payment Date need not be
made on such day, but may be made
on the next succeeding Business Day
with the same force and effect as
if made on such Interest Payment
Date and no interest shall accrue on
such payment for the period from
and after such Interest Payment
Date. If an Interest Payment Date
with respect to any Floating Rate
Note would otherwise fall on a day
that is not a Business Day, such
Interest Payment Date will be the
following day that is a Business
Day, except that in the case of a
LIBOR Note, if such day falls in
the next calendar month, such
Interest Payment Date will be the
preceding day that is a Business
Day. If the Stated Maturity, or
date of earlier redemption or
repayment, as the case may be, of a
Note is not a Business Day, the
payment of principal and interest
due on such day shall be made on
the next succeeding Business Day
and no interest shall accrue on
such payment for the period from
and after such
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<PAGE> 5
Stated Maturity, or date of earlier
redemption or repayment. For
special provisions relating to
Multi-Currency Notes and Indexed
Notes, see the related
Multi-Currency and Indexed Note
Prospectus Supplement.
Acceptance and
Rejection of Offers: The Company shall have the sole
right to accept offers to purchase
Notes from the Company and may
reject any such offer in whole or
in part. Each Agent shall
communicate to the Company, orally
or in writing, each reasonable offer
to purchase Notes from the Company
received by it. Each Agent shall
have the right, in its discretion
reasonably exercised, without notice
to the Company, to reject any offer
to purchase Notes through it in
whole or in part.
Preparation of
Pricing Supplement: If any offer to purchase a Note is
accepted by the Company, the
Company, with the approval of the
Agent which presented the order (the
"Presenting Agent"), will prepare a
Pricing Supplement reflecting the
terms of such Note and file 10
Pricing Supplements relating to the
Notes with the Commission in
accordance with Rule 424 under the
Act. Information to be included in
the Pricing Supplement shall
include:
1. the name of the Company
and the Guarantor;
2. the title of the
securities, including series
designation, if any;
3. the date of the Pricing
Supplement and the date of the
Prospectus Supplement to which the
Pricing Supplement relates;
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<PAGE> 6
4. the Price to Public (but
only if (a) the trade is being made
on an agency basis and (b) such
Price to Public is other than 100%);
5. Net Proceeds to the
Company (but only if (a) the trade
is being made on a principal basis
and (b) the Net Proceeds to the
Company is other than 100%), less
what would have been the applicable
agency commission; and
6. the information with
respect to the terms of the Notes
set forth below (whether or not the
applicable Note is a Book-Entry
Note) under "Procedures for Notes
Issued in Book-Entry Form -
Settlement Procedures", items 2, 3,
7, 8 and 9; and
7. any other terms of the
Notes not otherwise specified in the
Prospectus of Prospectus Supplement.
One copy of such filed document
will be sent by telecopy or overnight
express (for delivery not later
than 11:00 A.M. on the Business Day
next following the trade date) to the
applicable Presenting Agent at the
following addresses:
To Merrill Lynch:
Merrill Lynch & Co., Tritech
Services, #4 Corporate Place,
Corporate Park 287, Piscataway, New
Jersey 08854, Attention: Nachman
Kimmerling, Final Prospectus Unit,
Telephone: (908) 878-6526
Telecopy: (908) 878-6430.
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<PAGE> 7
To CS First Boston:
CS First Boston Corporation, 55
East 52nd Street, New York, New York
10055, Attention: Joseph D. Fashano,
Transaction Advisory Group
Telephone: (212) 909-2107
Telecopy: (212) 312-0532
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0327
Chicago, Illinois 60670
Attention: MTN Operations Manager
Telephone: (317) 732-9631
The Presenting Agent will cause a
stickered supplemented Prospectus
with the trade confirmation to be
delivered to the purchaser of the
Note.
For record keeping purposes, one copy
of each Pricing Supplement shall
also be mailed or telecopied to each
Agent and the Trustee at the
following respective addresses:
To Merrill Lynch:
Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner &
Smith Incorporated, Merrill Lynch
World Headquarters, World Financial
Center, North Tower, 10th Floor, New
York, New York 10281-1310,
Attention: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234;
To CS First Boston:
CS First Boston Corporation,
55 East 52nd Street,
New York, New York 10055,
Attention: Joseph D. Fashano,
Transaction Advisory Group
Telephone: (212) 909-2107
Telecopy: (212) 312-0532
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<PAGE> 8
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: George L. Woolsey
Telephone: (312) 732-5294
Fax: (312) 732-4172
To the Trustee:
Citibank, N.A.,
120 Wall Street,
New York, New York 10043,
Attention: Florence Mills
In each instance that a Pricing
Supplement is prepared, the
Presenting Agent will affix the
Pricing Supplement to supplemented
Prospectuses prior to its use.
Outdated Pricing Supplements and the
Prospectuses to which they are
attached (other than those retained
for files) will be destroyed.
Settlement: The receipt of immediately available
funds by the Company in payment for
a Note and the authentication and
delivery of such Note, including the
related Guarantee, shall, with
respect to such Note, constitute
"settlement." Offers accepted by
the Company will be settled at a
time as the purchaser and the
Company shall agree and pursuant to
the timetable for settlement set
forth in Parts II and III hereof
under "Settlement Procedures" with
respect to Book-Entry Notes and
Certificated Notes, respectively
(each such date fixed for
settlement, a "Settlement Date").
If procedures A and B of the
applicable Settlement Procedures
with respect to a particular offer
are not completed on or before the
time set forth under the applicable
"Settlement Procedures Timetable",
such offer shall not be settled
until the Business Day following the
completion of Settlement Procedures
A and B or such
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<PAGE> 9
later date as the purchaser and the
Company shall agree.
In the event of a purchase of Notes
by the Presenting Agent as principal,
appropriate settlement details will
be set forth in the applicable Terms
Agreement to be entered into between
the Presenting Agent and the Company
pursuant to the Distribution
Agreement.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been
reached to change the interest rate
or any other variable term on any
Notes being offered by the Company,
the Company will promptly advise the
Agents and the Agents will forthwith
suspend solicitation of offers to
purchase such Notes. Each Agent
will telephone the Company with
recommendations as to the changed
interest rates or other variable
terms. At such time as the Company
advises the Agents of the new
interest rates or other variable
terms, the Agents may resume
solicitation of offers to purchase
such Notes. Until such time, only
"indications of interest" may be
recorded. Immediately after
acceptance by the Company of an
offer to purchase at a new interest
rate or new variable term, the
Company, the Agents and the Trustee
shall follow the procedures set
forth under the applicable
"Settlement Procedures."
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the
Agents to suspend solicitation of
purchases at any time. Upon receipt
of such instructions, the Agents
will forthwith suspend solicitation
of offers to purchase from the
Company until such time as the
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<PAGE> 10
Company has advised them that
solicitation of offers to purchase
may be resumed. If the Company and
the Guarantor decide to amend the
Registration Statement (including
incorporating any documents by
reference therein) or supplement any
of such documents (other than to
change rates or other variable
terms), they will promptly advise
the Agents and, except in the case
of an amendment by the filing of a
document incorporated by reference
in the Registration Statement, will
furnish each Agent and its counsel
with copies of the proposed
amendment or supplement. One copy
of such filed document, along with a
copy of the cover letter sent to the
Commission, will be delivered or
mailed to the Agents at the
following addresses:
To Merrill Lynch:
Product Management MTNs, Merrill
Lynch Money Markets, Merrill Lynch
World Headquarters, North Tower,
World Financial Center, 23rd Floor,
New York, New York 10281-1218.
To CS First Boston:
CS First Boston Corporation, 55
East 52nd Street, New York, New
York 10055, Attention: Joseph D.
Fashano, Transaction Advisory Group
Telephone: (212) 909-2107
Telecopy: (212) 312-0532
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: George L. Woolsey
Telephone: (312) 732-5294
Fax: (312) 732-4172
In the event that at the time
the solicitation of offers to
purchase from the Company is
suspended (other than to change
interest
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<PAGE> 11
rates or other variable terms) there
shall be any offers to purchase
Notes that have been accepted by the
Company which have not been settled,
the Company will promptly advise the
Agents and the Trustee whether such
offers may be settled and whether
copies of the Prospectus as
theretofore amended and/or
supplemented as in effect at the
time of the suspension may be
delivered in connection with the
settlement of such orders. The
Company will have the sole
responsibility for such decision and
for any arrangements which may be
made in the event that the Company
determines that such orders may not
be settled or that copies of such
Prospectus may not be so delivered.
Delivery of Prospectus: A copy of the most recent Prospectus
and Pricing Supplement must
accompany or precede the earlier of
(a) the written confirmation of a
sale sent to a customer or his agent
and (b) the delivery of Notes to a
customer or his agent.
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<PAGE> 12
Authenticity of
Signatures: The Agents will have no obligation
or liability to the Company or the
Trustee in respect of the
authenticity of the signature of
any officer, employee or agent of
the Company, the Guarantor or the
Trustee on any Note or related
Guarantee.
Documents Incorporated
by Reference: The Company and the Guarantor shall
supply each Agent with an adequate
supply of all documents
incorporated by reference in the
Registration Statement.
Business Day: "Business Day" means any day other
than a Saturday, Sunday, or other
day on which banks in The City of
New York (and, with respect to LIBOR
Notes, the City of London) are
authorized or obligated by law or
executive order to close. For the
definition of "Business Day" with
respect to Multi-Currency Notes or
Indexed Notes, see the Prospectus
Supplement.
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<PAGE> 13
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Book-Entry Notes for eligibility
in the book-entry system maintained by DTC, the Trustee will perform the
custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representations from the
Company, the Guarantor and the Trustee to DTC, dated August 1, 1994, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC, dated
October 21, 1988 (the "Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Book-Entry Notes
having the same Original Issue Date,
interest rate, terms of redemption
or repayment, if any, and Stated
Maturity (collectively, the "Fixed
Rate Terms") will be represented
initially by a single global
security in fully registered form
without coupons; and all Floating
Rate Book-Entry Notes having the
same Original Issue Date, interest
rate basis or bases upon which
interest may be determined (each, an
"Interest Rate Basis"), which may be
one or more of the Commercial Paper
Rate, the Treasury Rate, LIBOR, the
CD Rate, the CMT Rate, the Federal
Funds Rate, the Prime Rate, the
Eleventh District Cost of Funds
Rate, any other rate set forth by
the Company, Initial Interest Rate,
Index Maturity, Spread and/or Spread
Multiplier, if any, Minimum Interest
Rate, if any, Maximum Interest Rate,
if any, terms of redemption or
repayment, if any, and Stated
Maturity (collectively, "Floating
Rate Terms") will be represented
initially by a single Book-Entry
Note.
Each Book-Entry Note will be dated
and issued as of the date of its
authentication by the Trustee or its
duly appointed authenticating
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<PAGE> 14
agent. Each Book-Entry Note will
bear interest from a date (the
"Interest Accrual Date") which will
be (a) with respect to an original
Book-Entry Note (or any portion
thereof), its Original Issue Date
and (b) with respect to any
Book-Entry Note (or portion thereof)
issued subsequently upon exchange or
transfer of a Book-Entry Note or in
lieu of a destroyed, lost or stolen
Book-Entry Note, the most recent
Interest Payment Date (or, in the
case of Floating Rate Notes with
interest rates which reset daily or
weekly, the day following the most
recent Record Date to which interest
has been paid or duly provided for
on the predecessor Book-Entry Note
or Notes (or if no such payment or
provision has been made, the
Original Issue Date of the
predecessor Book-Entry Note or
Notes), regardless of the date of
authentication of such subsequently
issued Book-Entry Note. No
Book-Entry Note shall represent any
Certificate Note.
Identification: The Agents have arranged with the
CUSIP Service Bureau (the "CUSIP
Service Bureau") of Standard &
Poor's Corporation ("Standard &
Poor's") for the reservation of
approximately 900 CUSIP numbers for
each rank of Notes which have been
reserved for future assignment to
Book-Entry Notes representing Notes
issued in book-entry form and have
delivered to the Company, the
Trustee and DTC an initial written
list of such CUSIP numbers. The
Trustee will assign CUSIP numbers to
Book-Entry Notes as described below
under Settlement Procedure B. DTC
will notify the CUSIP Service Bureau
periodically of the CUSIP numbers
that the Trustee has assigned to
Book-Entry Notes. The Trustee will
notify the Company at
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<PAGE> 15
any time when fewer than 100 of the
respective reserved CUSIP numbers
remain unassigned to Book-Entry
Notes, and, if it deems necessary,
the Company will reserve additional
CUSIP numbers for assignment to
Book-Entry Notes representing Notes
issued in book-entry form. Upon
obtaining such additional CUSIP
numbers, the Company will deliver a
list of such additional numbers to
the Trustee and DTC. Book-Entry
Notes having an aggregate principal
amount in excess of $150,000,000 and
otherwise required to be represented
by the same Global Certificate will
instead be represented by two or
more Global Certificates which shall
be assigned the same CUSIP number.
Registration: Each Book-Entry Note will be
registered in the name of CEDE &
CO., as nominee for DTC, on the
register maintained by the Trustee
under the Indenture. The beneficial
owner of a Book-Entry Note (i.e., an
owner of a beneficial interest in a
Book-Entry Note), or one or more
indirect participants in DTC
designated by such owner, will
designate one or more participants
in DTC (with respect to such
Book-Entry Note, the "Participants")
to act as agent for such beneficial
owner in connection with the
book-entry system maintained by DTC,
and DTC will record in book-entry
form, in accordance with
instructions provided by such
Participants, a credit balance with
respect to such Book-Entry Note in
the account of such Participants.
The ownership interest of such
beneficial owner in such Book-Entry
Note will be recorded through the
records of such Participants or
through the separate records of such
Participants and one or more
indirect participants in DTC.
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<PAGE> 16
Transfers: Transfers of beneficial interests in
a Book-Entry Note will be
accomplished by book entries made by
DTC and, in turn, by Participants
(and in certain cases, one or more
indirect participants in DTC) acting
on behalf of beneficial transferors
and transferees of such Book-Entry
Note.
Exchanges: The Trustee may deliver to DTC and
the CUSIP Service Bureau at any time
a written notice specifying (a) the
CUSIP numbers of two or more
Book-Entry Notes Outstanding on such
date that represent Book-Entry Notes
having the same Fixed Rate Terms or
Floating Rate Terms, as the case
may be, other than Original Issue
Dates, and for which interest has
been paid to the same date; (b) a
date, occurring at least 30 days
after such written notice is
delivered and at least 30 days
before the next Interest Payment
Date for the related Book-Entry
Notes, on which such Book-Entry
Notes shall be exchanged for a
single replacement Book-Entry Note;
and (c) a new CUSIP number to be
assigned to such replacement
Book-Entry Note. Upon receipt of
such a notice, DTC will send to its
Participants (including the Trustee)
a written reorganization notice to
the effect that such exchange will
occur on such date. Prior to the
specified exchange date, the Trustee
will deliver to the CUSIP Service
Bureau written notice setting forth
such exchange date and the new CUSIP
number and stating that, as of such
exchange date, the CUSIP numbers of
the Book-Entry Notes to be exchanged
will no longer be valid. On the
specified exchange date, the Trustee
will exchange such Book-Entry Notes
for a single Book-Entry Note bearing
the new CUSIP number and the CUSIP
numbers of the
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<PAGE> 17
exchanged Book-Entry Notes will, in
accordance with CUSIP Service Bureau
procedures, be cancelled and not
immediately reassigned.
Notwithstanding the foregoing, if
the Book-Entry Notes to be
exchanged exceed $150,000,000 in
aggregate principal amount, one
replacement Book-Entry Note will be
authenticated and issued to
represent each $150,000,000 of
principal amount of the exchanged
Book-Entry Notes and an additional
Book-Entry Note will be
authenticated and issued to
represent any remaining principal
amount of such Book-Entry Notes (see
"Denominations" below).
Denominations: All Book-Entry Notes will be
denominated in U.S. dollars and will
be issued in denominations of $1,000
and integral multiples thereof.
Book-Entry Notes will be denominated
in principal amounts not in excess
of $150,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of
$150,000,000 would, but for the
preceding sentence, be represented
by a single Book-Entry Note, then
one Book-Entry Note will be issued
to represent each $150,000,000
principal amount of such Note or
Notes issued in book-entry form and
an additional Book-Entry Note will
be issued to represent any remaining
principal amount of such Note or
Notes issued in book-entry form. In
such a case, each of the Book-Entry
Notes shall be assigned the same
CUSIP number.
Interest: General. Interest on each Note
issued in book-entry form will
accrue from the Interest Accrual
Date of the Book-Entry Note
representing such Note. Each
payment of interest on a Book-Entry
Note will include interest accrued
through the day preceding, as the
case may
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<PAGE> 18
be, the Interest Payment Date
(provided that in the case of
Floating Rate Notes with interest
rates which reset daily or weekly
interest payments will include
interest accrued to and including
the Regular Record Date immediately
preceding the Interest Payment
Date), the Stated Maturity Date,
Redemption Date or Repayment Date.
Interest payable at Maturity of a
Book-Entry Note will be payable to
the Person to whom the principal of
such Note is payable. DTC will
arrange for each pending deposit
message described under Settlement
Procedure C below to be transmitted
to Standard & Poor's Corporation
("S&P"), which will use the
information in the message to
include certain terms of the related
Book-Entry Note in the appropriate
daily bond report published by S&P.
Interest Payment Dates. Interest
payments will be made on each
Interest Payment Date commencing
with the first Interest Payment Date
following the Original Issue Date;
provided, however, the first payment
of interest on any Book-Entry Note
originally issued between a Regular
Record Date and an Interest Payment
Date will occur on the Interest
Payment Date following the next
Regular Record Date.
Fixed Rate Notes. Interest
payments on Fixed Rate Book-Entry
Notes will be made semiannually on
June 15 and December 15 of each year
and at Maturity.
Floating Rates Notes. Except as
provided in Part I under
"Calculation of Interest", the
Interest Payment Date for a Floating
Rate Note will be, in the case of
Floating Rate Notes which reset
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<PAGE> 19
daily, weekly or monthly, on
the third Wednesday of each month or
on the third Wednesday of March,
June, September and December of each
year as specified in the applicable
Pricing Supplement; in the case of
Floating Rate Notes which reset
quarterly, on the third Wednesday of
March, June, September and December
of each year; in the case of
Floating Rate Notes which reset
semiannually, on the third Wednesday
of the two months of each year
specified in the applicable Pricing
Supplement; or, in the case of
Eleventh District Cost of Funds Rate
Notes, on the first Business Day of
each month or the first Business Day
of each March, June, September or
December as specified in the
applicable Pricing Supplement and in
the case of Floating Rate Notes
which reset annually, on the third
Wednesday of the month specified in
the applicable Pricing Supplement;
and, in each case, at Maturity. For
additional special provisions
relating to Floating Rate Notes, see
the Prospectus Supplement.
Regular Record Dates. The Regular
Record Date with respect to any
Interest Payment Date for a Fixed
Rate Note shall be the May 31 or
November 30 preceding such Interest
Payment Date. The Regular Record
Date with respect to any Interest
Payment Date for any Floating Rate
Note shall be the date 15 calendar
days (whether or not a Business Day)
preceding such Interest Payment
Date.
Notice of Interest Payments and
Regular Record Dates. On the first
Business Day of January, April, July
and October of each year, the
Trustee will deliver to the Company
and DTC a written list of Regular
Record Dates and Interest Payment
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<PAGE> 20
Dates that will occur during the
six-month period beginning on such
first Business Day with respect to
Floating Rate Book-Entry Notes.
Promptly after each Interest
Determination Date for Floating Rate
Book-Entry Notes, the Company will
notify S&P of the interest rates
determined on such Interest
Determination Date.
Payments of Principal
and Interest: Payments of Interest Only.
Promptly after each Regular Record
Date, the Trustee will deliver to
the Company and DTC a written
notice specifying by CUSIP number
the amount of interest to be paid
on each Book-Entry Note issued
under the Indenture on the
following Interest Payment Date
(other than an Interest Payment
Date coinciding with Maturity) and
the total of such amounts. DTC
will confirm the amount payable on
each Book-Entry Note on such
Interest Payment Date by reference
to the daily bond reports published
by Standard & Poor's. On such
Interest Payment Date, the Company
will pay to the Trustee, and the
Trustee in turn will pay to DTC,
such total amount of interest due
(other than at Maturity), at the
times and in the manner set forth
below under "Manner of Payment."
Payments at Maturity.
On or about the first Business Day
of each month, the Trustee will
deliver to the Company and DTC a
written list of principal, interest
and premium, if any, to be paid on
each Book-Entry Note issued under
the Indenture having a Maturity in
the following month. The Trustee
and DTC will confirm the amounts of
such principal, premium and
interest payments with respect to a
Book-Entry Note on or about the fifth
Business Day preceding the
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<PAGE> 21
Maturity of such Book-Entry Note. At
such maturity, the Company will pay
to the Trustee, and the Trustee in
turn will pay to DTC, the principal
amount of such Note, together with
interest and premium, if any, due
at such Maturity, at the times and
in the manner set forth below under
"Manner of Payment." Promptly after
payment to DTC of the principal,
interest and premium, if any, due
at the Maturity of such Book-Entry
Note, the Trustee will cancel and
destroy such Book-Entry Note and
deliver to the Company a
certificate of destruction therefor.
Manner of Payment. The total
amount of any principal, premium, if
any, and interest due on Book-Entry
Notes on any Interest Payment Date
or at Maturity shall be paid by the
Company to the Trustee in funds
available for use as of 9:30 a.m.,
New York City time, on such date.
The Company will make such payment
on such Book-Entry Notes by
instructing the Trustee to withdraw
funds from an account maintained by
the Company with the Trustee. The
Company will confirm such
instructions in writing to the
Trustee. Prior to 10:00 a.m., New
York City time, on such date or as
soon as possible thereafter, the
Trustee will pay by separate wire
transfer (using Fedwire message
entry instructions in a form
previously specified by DTC) to an
account at the Federal Reserve Bank
of New York previously specified by
DTC, in funds available for
immediate use by DTC, each payment
of principal (together with
interest and premium, if any) due
on a Book-Entry Note on such date.
Thereafter on such payment date,
DTC will pay, in accordance with
its SDFS operating procedures then in
effect, such amounts in funds
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<PAGE> 22
available for immediate use to the
respective Participants in whose names
such Notes are recorded in the
book-entry system maintained by
DTC. Neither the Company nor the
Trustee shall have any responsibility
or liability for the payment by DTC of
the principal of, or interest on, the
Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any
taxes required under applicable
law to be withheld from any interest
payment on a Note will be determined
and withheld by the Participant,
indirect participant in DTC or other
Person responsible for forwarding
payments and materials directly to the
beneficial owner of such Note.
Settlement Procedures: Settlement Procedures with regard to
each Book-Entry Note sold by the
Agents, as agents of the Company,
will be as follows:
A. The Presenting Agent will advise
the Company by telephone of the
following Settlement information:
1. Taxpayer identification
number of the purchaser.
2. Principal amount of the Note.
3. Fixed Rate Notes:
(a) interest rate
Floating Rate Notes:
(a) interest rate basis;
(b) initial interest rate;
(c) spread and/or spread
multiplier, if any;
(d) initial interest reset
dates;
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<PAGE> 23
(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest rate,
if any;
(j) minimum interest rate,
if any;
(k) alternate rate event
spread; and
(l) interest rate reset
dates.
5. Price to public of the Note.
6. Trade date.
7. Settlement Date (Original
Issue Date).
8. Stated Maturity.
9. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption
Percentage
(c) Annual Redemption
Percentage Reduction
10. Optional Repayment Date(s),
if any.
11. Net proceeds to the Company.
12. Presenting Agent's commission.
B. The Company will advise the Trustee
by telecopy or other method
acceptable to the Trustee of the
above settlement information
received with respect to each Note
from the
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<PAGE> 24
Presenting Agent and shall
confirm to the Trustee that the
principal amount of Notes,
including such Note, issued as of
the relevant Settlement Date shall
not exceed the limit with respect to
the principal amount of Notes
specified in the most recent Company
Order delivered to the Trustee
pursuant to Section 303 of the
Indenture.
C. The Trustee will assign a CUSIP
Number to the Book-Entry Note
and will telephone and advise the
Company and the Presenting Agent of
such CUSIP Number. The Trustee will
communicate to DTC and the
Presenting Agent through DTC's
Participant Terminal System a
pending deposit message specifying
the following settlement
information:
1. The information set forth in
Settlement Procedure A.
2. Identification numbers of the
participant accounts
maintained by DTC on behalf
of the Trustee and the
Presenting Agent.
3. Identification as a Fixed Rate
Book-Entry Note or Floating
Rate Book-Entry Note.
4. Initial Interest Payment Date
for such Note, number of days
by which such date succeeds
the related record date for
DTC purposes (or, in the case
of Floating Rate Notes which
reset daily or weekly, the
date five calendar days
preceding the Interest
Payment
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<PAGE> 25
Date) and, if then
calculable, the amount of
interest payment on such
Interest Payment Date (which
amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Book-Entry
Note representing such Note.
6. Whether such Book-Entry Note
represents any other Notes
issued or to be issued in
book-entry form.
D. The Company will deliver to the
Trustee a Book-Entry Note
representing such Note in a form
that has been approved by the
Company, the Agents and the Trustee.
E. The Trustee will complete and
authenticate the Book-Entry Note.
F. DTC will credit such Note to the
participant account of the
Trustee maintained by DTC.
G. The Trustee will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit such
Note to the Trustee's participant
account and credit such Note to the
participant account of the
Presenting Agent maintained by DTC
and (ii) to debit the settlement
account of the Presenting Agent and
credit the settlement account of the
Trustee maintained by DTC, in an
amount equal to the price of such
Note less the Presenting Agent's
commission. Any entry of such a
deliver order shall
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<PAGE> 26
be deemed to constitute a
representation and warranty by the
Trustee to DTC that (i) the
Book-Entry Note has been issued and
authenticated and (ii) the Trustee
is holding such Book-Entry Note
pursuant to the Certificate
Agreement between the Trustee and
DTC.
H. The Presenting Agent will enter an
SDFS deliver order through
DTC's Participant Terminal System
instructing DTC (i) to debit such
Note to the Presenting Agent's
participant account and credit such
Note to the participant account of
the Participants maintained by DTC
and (ii) to debit the settlement
accounts of such Participants and
credit the settlement account of the
Presenting Agent maintained by DTC,
in an amount equal to the initial
public offering price of such Note.
I. Transfers of funds in accordance
with SDFS delivery orders described
in Settlement Procedures G and H
will be settled in accordance
with SDFS operating procedures in
effect on the Settlement Date.
J. The Trustee will credit to an
account of the Company maintained by
the Trustee funds available for
immediate use in the amount
transferred to the Trustee in
accordance with Settlement Procedure
G.
K. The Trustee will send a copy of the
Book-Entry Note to the Company
together with a statement setting
forth the principal amount of Notes
Outstanding as of the related
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<PAGE> 27
Settlement Date after giving
effect to such transaction and all
other offers to purchase Notes of
which the Company has advised the
Trustee but which have not been
settled.
L. The Presenting Agent will confirm
the purchase of such Note to the
purchaser either by transmitting
to the Participant with respect to
such Note a confirmation order
through DTC's Participant Terminal
System or by mailing a written
confirmation to such purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes
accepted by the Company, Settlement
Procedures "A" through "L" set forth
above shall be completed as soon as
possible but not later than the
respective times (New York City
time) set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade
date
B 12:00 noon on the trade
date
C 2:00 p.m. on the trade
date
D 3:00 p.m. on the Business
Day before Settlement Date
E 9:00 a.m. on Settlement
Date
F 10:00 a.m. on Settlement
Date
G-H No later than 2:00 p.m.
on Settlement Date
I 4:45 p.m. on Settlement
Date
J-L 5:00 p.m. on Settlement
Date
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<PAGE> 28
If a sale is to be settled
more than one Business Day after the
trade date, Settlement Procedures A,
B, and C may, if necessary, be
completed at any time prior to the
specified times on the first
Business Day after such trade date.
In connection with a sale which is
to be settled more than one Business
Day after the trade date, if the
initial interest rate for a Floating
Rate Note is not known at the time
that Settlement Procedure A is
completed, Settlement Procedures B
and C shall be completed as soon as
such rates have been determined, but
no later than 11:00 a.m. and 2:00
p.m., New York City time,
respectively, on the second Business
Day before the Settlement Date.
Settlement Procedure I is subject to
extension in accordance with any
extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Note is
rescheduled or cancelled, the
Company shall notify the Trustee and
the Trustee will deliver to DTC,
through DTC's Participant Terminal
System, a cancellation message to
such effect by no later than 2:00
p.m., New York City time, on the
Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle: If the Trustee has not entered an
SDFS deliver order with respect to a
Book-Entry Note pursuant to
Settlement Procedure G, then upon
written request (which may be
evidenced by facsimile transmission)
of the Company the Trustee shall
deliver to DTC, through DTC's
Participant Terminal System, as soon
as practicable a withdrawal message
instructing DTC to debit
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<PAGE> 29
such Note to the participant
account of the Trustee maintained at
DTC. DTC will process the
withdrawal message, provided that
such participant account contains a
principal amount of the Book-Entry
Note representing such Note that is
at least equal to the principal
amount to be debited. If withdrawal
messages are processed with respect
to all the Notes represented by a
Book-Entry Note, the Trustee will
mark such Book-Entry Note
"cancelled", make appropriate
entries in its records and send such
cancelled Book-Entry Note to the
Company. The CUSIP number assigned
to such Book-Entry Note shall, in
accordance with CUSIP Service Bureau
procedures, be cancelled and not
immediately reassigned. If
withdrawal messages are processed
with respect to a portion of the
Notes represented by a Book-Entry
Note, the Trustee will exchange such
Book-Entry Note for two Book-Entry
Notes, one of which shall represent
the Book-Entry Notes for which
withdrawal messages are processed
and shall be cancelled immediately
after issuance, and the other of
which shall represent the other
Notes previously represented by the
surrendered Book-Entry Note and
shall bear the CUSIP number of the
surrendered Book-Entry Note.
If the purchase price for any
Book-Entry Note is not timely paid
to the Participants with respect to
such Note by the beneficial
purchaser thereof (or a person,
including an indirect participant in
DTC, acting on behalf of such
purchaser), such Participants and,
in turn, the Presenting Agent may
enter SDFS deliver orders through
DTC's Participant Terminal System
reversing Settlement Procedures G
and H, respectively. Thereafter,
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<PAGE> 30
the Trustee will deliver the
withdrawal message and take the
related actions described in the
preceding paragraph. If such
failure shall have occurred for any
reason other than default by the
Presenting Agent to perform its
obligations hereunder or under the
Distribution Agreement, the Company
will reimburse the Presenting Agent
on an equitable basis for its loss
of the use of funds during the
period when the funds were credited
to the account of the Company.
Notwithstanding the foregoing,
upon any failure to settle with
respect to a Book-Entry Note, DTC
may take any actions in accordance
with its SDFS operating procedures
then in effect. In the event of a
failure to settle with respect to a
Note that was to have been
represented by a Book-Entry Note
also representing other Notes, the
Trustee will provide, in accordance
with Settlement Procedures D and E,
for the authentication and issuance
of a Book-Entry Note representing
such remaining Notes and will make
appropriate entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Certificated Notes, other than
Index Notes and Multi-Currency
Notes, will be issued in
denominations of $1,000 and integral
multiples thereof. Index Notes and
Multi-Currency Notes will be issued
in the denominations specified in a
related Multi-Currency and Indexed
Note Prospectus Supplement and
Pricing Supplement.
Interest: Each Certificated Note will bear
interest in accordance with its
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<PAGE> 31
terms. Interest will begin to accrue
on the Original Issue Date of a
Certificated Note for the first
Interest Payment Period and on the
most recent Interest Payment Date to
which interest has been paid for all
subsequent Interest Payment Periods.
Each payment of interest shall
include interest accrued to, but
excluding, the date of such payment.
Interest payments in respect of
Fixed Rate Certificated Notes will
be made semiannually on June 15 and
December 15 of each year and at
Maturity. However, the first
payment of interest on any
Certificated Note issued between a
Regular Record Date and an Interest
Payment Date will be made on the
Interest Payment Date following the
next succeeding Regular Record Date.
The Regular Record Date with respect
to any Interest Payment Date for a
Fixed Rate Certificated Note shall
be the May 31 or November 30
preceding such Interest Payment
Date. Interest at Maturity will be
payable to the person to whom the
principal is payable.
Except as provided in Part I under
"Calculation of Interest", the
Interest Payment Date for a Floating
Rate Certificated Note will be, in
the case of Floating Rate Notes
which reset daily, weekly or
monthly, on the third Wednesday of
each month or on the third Wednesday
of March, June, September and
December of each year as specified
in the applicable Pricing
Supplement; in the case of Floating
Rate Notes which reset quarterly, on
the third Wednesday of March, June,
September and December of each year;
in the case of Floating Rate Notes
which reset semiannually, on the
third Wednesday of the two months of
each year specified in the
applicable Pricing Supplement;
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<PAGE> 32
or, in the case of Eleventh District
Cost of Funds Rate Notes, on the
first Business Day of each month
or the first Business Day of each
March, June, September or December as
specified in the applicable Pricing
Supplement and in the case of
Floating Rate Notes which reset
annually, on the third Wednesday of
the month specified in the
applicable Pricing Supplement; and,
in each case, at Maturity. The
Regular Record Date with respect to
a Floating Rate Note shall be the
date 15 calendar days (whether or
not a Business Day) preceding an
Interest Payment Date.
Notwithstanding the above, in the
case of Floating Rate Certificated
Notes having interest rates which
reset daily or weekly, interest
payments shall include accrued
interest from, and including, the
date of issue or from, but
excluding, the last date in respect
of which interest has been accrued
and paid, as the case may be,
through, and including, the Regular
Record Date, except that at Maturity
the interest payable will include
interest accrued to, but excluding,
the date of Maturity. For
additional special provisions
relating to Floating Rate
Certificated Notes, see the
Prospectus Supplement.
Payments of Principal
and Interest: Upon presentment and delivery of the
Certificated Note, the Trustee or the
Company's duly authorized agent will
pay the principal amount of each
Certificated Note at Maturity and the
final installment of interest in
immediately available funds. All
interest payments in U.S. dollars on
a Certificated Note, other than
interest due at Maturity, will be
made by check drawn on the Trustee or
the
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<PAGE> 33
Company's duly authorized agent and
mailed by such Trustee or agent to
the person entitled thereto as
provided in the Certificated Note.
However, the Registered Owners (as
hereinafter defined) of ten million
dollars or more in aggregate
principal amount of the same series
of Certificated Notes (whether
having identical or different terms
and provisions) shall be entitled to
receive payments of interest, other
than at Maturity, by wire transfer
of immediately available funds if
appropriate wire transfer
instructions have been received in
writing by the appropriate Trustee
or such agent not less than 16 days
prior to the applicable Interest
Payment Date.
For special provisions relating to
Multi-Currency Notes and Indexed
Notes, see the related
Multi-Currency and Indexed Note
Prospectus Supplement.
The Trustee will provide monthly to
the Company a list of the principal
and interest in each currency to be
paid on Certificated Notes maturing
in the next succeeding month. Such
Trustee or agent will be responsible
for withholding taxes on interest
paid as required by applicable law,
but shall be relieved from any such
responsibility if it acts in good
faith and in reliance upon an
opinion of counsel.
Certificated Notes presented to the
Trustee or the Company's duly
authorized agent at Maturity for
payment will be cancelled by such
Trustee or agent. All cancelled
Certificated Notes held by such
Trustee shall be destroyed, and the
Trustee shall furnish to the Company
a certificate with respect to such
destruction.
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<PAGE> 34
Settlement Procedures: Settlement Procedures with regard to
each Certificated Note purchased
through the Agents, as agents, shall
be as follows:
A. Each Agent will advise the Company
by telephone of the following
Settlement information with regard
to each Certificated Note:
1. Exact name in which the
Certificated Note is to be
registered (the "Registered
Owner").
2. Exact address or addresses of
the Registered Owner for
delivery, notices and
payments of principal,
premium, if any, and
interest.
3. Taxpayer identification number
of the Registered Owner.
4. Principal amount of the
Certificated Note.
5. Denomination of the
Certificated Note.
6. Fixed Rate Notes:
(a) interest rate
Floating Rate Notes:
(a) interest rate basis
or bases;
(b) initial interest rate;
(c) spread or spread
multiplier, if any;
(d) initial interest reset
date;
(e) interest reset dates;
(f) interest payment dates;
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<PAGE> 35
(g) index maturity;
(h) calculation agent;
(i) maximum interest
rates, if any;
(j) minimum interest rate,
if any;
(k) alternate rate event
spread; and
(l) interest determination
dates
Indexed Notes:
(a) specified currency;
(b) indexed currency; and
(c) base rate of exchange.
8. Currency or currency unit in
which the Certificated Note
is to be denominated.
9. Price to public of the
Certificated Note.
10. Settlement Date (Original
Issue Date).
11. Stated Maturity.
12. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption
Percentage
(c) Annual Redemption
Percentage Reduction
13. Optional Repayment Date(s), if
any.
14. Net proceeds to the Company.
15. Presenting Agent's commission.
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<PAGE> 36
B. The Company shall provide to the
Trustee by telecopy or other
method acceptable to the Trustee the
above Settlement information with
respect to each Certificated Note
received from the Agents, the name
of the Presenting Agent and shall
confirm to the Trustee that the
principal amount of Notes, including
such Certificated Note, issued as
of the relevant Settlement Date
shall not exceed the limit with
respect to the principal amount of
Notes specified in the most recent
Company Order delivered to the
Trustee pursuant to Section 303 of
the Indenture. The Company also
shall cause the Trustee or its duly
appointed agent to issue,
authenticate and deliver
Certificated Notes in accordance
with the Settlement Procedures
Timetable set forth below. The
Company also shall provide to the
Trustee and the Presenting Agent a
copy of the applicable Pricing
Supplement. The Company also shall
provide to the Trustee and the
Presenting Agent a copy of a
Multi-Currency and Indexed Note
Supplement, if applicable.
C. The Trustee or its duly appointed
agent will complete and authenticate
the Certificated Notes, including
the Guarantee, in forms approved by
the Company and the Guarantor, as
the case may be.
D. With respect to each trade, the
Trustee will deliver the
Certificated Notes and one
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<PAGE> 37
photocopy thereof to the applicable
Presenting Agent at the following
addresses:
Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith
Incorporated, 75 Barclay Street,
Ground Floor, Window C, New York,
New York 10080, Attention: Kevin
Brennan.
CS First Boston Corporation, Five
World Trade Center, New York,
New York 10048, Attention: Paul
Riley.
First Chicago Capital Markets, Inc.
c/o Bankers Trust, 16 Wall
Street, 5th Floor, Window 51, New
York, New York, 10015,
Attention: Jim Murray,
Telephone: (212) 618-2370.
The Trustee will keep Stub 1. The
Presenting Agent will acknowledge
receipt of the Certificated Note
through a broker's receipt and
will keep the photocopy. Delivery
of the Certificated Note will be
made only against such
acknowledgement of receipt.
Upon determination that the
Certificated Note, including
the related Guarantee, has been
authorized, delivered and completed
as aforementioned, the Presenting
Agent will wire the net proceeds of
the Certificated Note after
deduction of its applicable
commission to the Company pursuant
to standard wire instructions given
by the Company.
E. The Presenting Agent will deliver
the Certificated Note, the related
Guarantee endorsed
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<PAGE> 38
thereon, as well as a copy of
the Prospectus and any applicable
Pricing Supplement or Supplements
received from the Trustee, to the
purchaser against payment in
immediately available funds.
F. The Trustee will send a photocopy
of the Certified Note to the Company.
Settlement Procedures
Timetable: For offers to purchase Certificated
Notes accepted by the Company,
Settlement Procedures "A" through "F"
set forth above shall be completed on
or before the respective times set
forth below:
Settlement
Procedure Time
--------- ----
A-B 3:00 PM on Business Day
prior to Settlement
C-D 2:15 PM on Settlement Date
E 3:00 PM on Settlement Date
F 5:00 PM on Settlement Date
Failure to Settle: In the event that a purchaser of a
Certificated Note from the Company
shall either fail to accept delivery of
or make payment for a Certificated Note
on the date fixed for settlement, the
Presenting Agent will forthwith notify
the Trustee and the Company by
telephone, confirmed in writing, and
return the Certificated Note to such
Trustee.
The Trustee or the Company's duly
authorized agent, upon receipt of
the Certificated Note from the
Presenting Agent, will immediately
advise the Company, and the Company
will promptly arrange to credit the
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<PAGE> 39
account of the Presenting Agent
in an amount of immediately available
funds equal to the amount previously
paid by the Presenting Agent in
settlement for the Certificated Note.
Such credits will be made on the
Settlement Date if possible, and in any
event not later than the Business Day
following the Settlement Date; provided
that the Company has received notice on
the same day. If such failure shall
have occurred for any reason other than
failure by the Presenting Agent to
perform its obligations hereunder or
under the Distribution Agreement, the
Company will reimburse the Presenting
Agent on an equitable basis for its
loss of the use of funds during the
period when the funds were credited to
the account of the Company.
Immediately upon receipt of the
Certificated Note in respect of which
the failure occurred, the Trustee or
the Company's duly authorized agent
will cancel and destroy the
Certificated Note, make appropriate
entries in its records to reflect the
fact that the Certificated Note was
never issued, and accordingly notify in
writing the Company.
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<PAGE> 1
Exhibit (10)(b)
INTEREST CALCULATION AGENCY AGREEMENT
INTEREST CALCULATION AGENCY AGREEMENT between BanPonce Financial
Corp., a Delaware corporation (the "Issuer"), and CITIBANK, N.A., dated as of
August 1, 1994.
PRELIMINARY STATEMENT
1. The Issuer proposes to issue and sell Medium-Term Notes, Series B
(the "Notes") from time to time under, and pursuant to, the terms of an
Indenture, dated as of October 1, 1991 (the "Indenture," the terms defined
being used herein as defined therein or in the Notes), among the Issuer,
BanPonce Corporation, a Puerto Rico corporation, and Citibank, N.A., trustee
under the Indenture (acting in such capacity, the "Trustee").
2. The Issuer desires to appoint an agent of the Issuer to calculate
the base rates applicable to those Notes on which interest is to accrue at a
variable or floating rate ("Floating Rate Notes"), determined by references to
LIBOR, the Eleventh District Cost of Funds Rate, the Commercial Paper Rate, the
Treasury Rate, the Certificate of Deposit Rate, the CMT Rate, the Prime Rate or
the Federal Funds Rate (collectively, the "Base Rates") as are specified and
described in the Floating Rate Notes, a copy of which is attached hereto as
Exhibit A.
NOW, THEREFORE, the Issuer and Citibank, N.A. hereby agree as follows:
<PAGE> 2
Section 1. Appointment of Calculation Agent. The Issuer hereby
appoints Citibank, N.A. as Calculation Agent (in such capacity, the
"Calculation Agent") of the Issuer with respect to any Floating Rate Notes to
be issued by the Issuer under and pursuant to the terms of the Indenture, and
the Calculation Agent hereby accepts its obligations as set forth in this
Agreement upon the terms and conditions set forth herein.
Section 2. Calculation of Base Rates. Unless otherwise specified to
the Calculation Agent with respect to any particular note, the calculation date
for each applicable Interest Determination Date for any Note shall be the
earlier of (i) the tenth calendar day after such Interest Determination Date,
or if any such day is not a Business Day (as defined in the Indenture) the next
succeeding Business Day or (ii) the Business Day preceding the applicable
Interest Payment Date or Maturity, as the case may be. The Calculation Agent
shall notify the Issuer and the Trustee of such Base Rate on such calculation
date. If at any time the Calculation Agent is not also acting as Trustee under
the Indenture, the Issuer shall, upon the issuance of each Floating Rate Note
having a different Base Rate or different Interest Determination Dates than the
Base Rate or Interest Determination Dates for any prior Floating Rate Note,
notify such Calculation Agent of such Interest
-2-
<PAGE> 3
Determination Dates and Base Rate for such Floating Rate Note.
Section 3. New Base Rates. If the Issuer proposes to issue Floating
Rate Notes whose interest rate will be determined on a basis or formula not
referred to above (a "New Base Rate"), the Issuer shall give a description of
such New Base Rate to the Calculation Agent. The Calculation Agent shall
determine if it is able and willing to calculate the New Base Rate and upon its
agreement in writing to do so the term "Base Rate" shall be deemed to include
the New Base Rate. If the Calculation Agent notifies the Issuer that it is not
able or willing to calculate the New Base Rate, or that it is only willing to
do so on the basis of an increase of its fees not acceptable to the Issuer, the
Calculation Agent shall have no responsibility with respect to such New Base
Rate and the Issuer shall appoint a different calculation agent to determine
the New Base Rate.
Section 4. Fees and Expenses. The Calculation Agent shall be
entitled to such compensation for its services under this Agreement as may be
agreed upon with the Issuer, and the Issuer shall pay such compensation and
shall reimburse the Calculation Agent for all reasonable expenses,
disbursements and advances incurred or made by the Calculation Agent in
connection with the services rendered by it under this Agreement, including
reasonable legal fees
-3-
<PAGE> 4
and expenses, upon receiving an accounting therefor from the Calculation Agent.
Section 5. Right and Liabilities of Calculation Agent. The
Calculation Agent shall incur no liability for, or in respect of, any action
taken, omitted to be taken or suffered by it in reliance upon any Floating Rate
Note, certificate, affidavit, instruction, notice, request, direction, order,
statement or other paper, document or communication reasonably believed by it
to be genuine. Any order, certificate, affidavit, instruction, notice,
request, direction, statement or other communication from the Issuer made or
given by it and sent, delivered or directed to the Calculation Agent under,
pursuant to or as permitted by any provision of this Agreement shall be
sufficient for purposes of this Agreement if such communication is in writing
and signed by any officer of the Issuer. The Calculation Agent may consult
with counsel satisfactory to it and the opinion of such counsel shall
constitute full and complete authorization and protection of the Calculation
Agent with respect to any action taken, omitted to be taken or suffered by it
hereunder in good faith and in accordance with and in reliance upon the opinion
of such counsel. In acting under this Agreement, the Calculation Agent (in its
capacity as such) does not assume any obligation towards, or any relationship
of agency or trust for or with the holders of the Notes.
-4-
<PAGE> 5
Section 6. Right of Calculation Agent to Own Floating Rate Notes.
The Calculation Agent may act as Trustee under the Indenture and it, its
officers, employees and shareholders may become owners of, or acquire any
interests in, Floating Rate Notes, with the same rights as if the Calculation
Agent were not the Calculation Agent, and may engage in, or have an interest
in, any financial or other transaction with the Issuer as if the Calculation
Agent were not the Calculation Agent.
Section 7. Duties of Calculation Agent. The Calculation Agent shall
be obliged only to perform such duties as are specifically set forth herein and
no other duties or obligations on the part of the Calculation Agent, in its
capacity as such, shall be implied by this Agreement.
Section 8. Termination, Resignation or Removal of Calculation Agent.
The Calculation Agent may at any time terminate this Agreement by giving no
less than 90 days' written notice to the Issuer unless the Issuer consents in
writing to a shorter time. Upon receipt of notice of termination by the
Calculation Agent, the Issuer agrees promptly to appoint a successor
Calculation Agent. The Issuer may terminate this Agreement at any time by
giving written notice to the Calculation Agent and specifying the date when
the termination shall become effective; provided, however, that no termination
by the Calculation Agent or by the Issuer shall become effective prior to the
date of the
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appointment by the Issuer, as provided in Section 9 hereof, of a successor
Calculation Agent and the acceptance of such appointment by such successor
Calculation Agent. If an instrument of acceptance by a successor Calculation
Agent shall not have been delivered to the Calculation Agent within 30 days
after the giving of such notice of resignation, the resigning Calculation Agent
may petition any court of competent jurisdiction for the appointment of a
successor Calculation Agent. Upon termination by either party pursuant to the
provisions of this Section, the Calculation Agent shall be entitled to the
payment of any compensation owed to it by the Issuer hereunder and to the
reimbursement of all reasonable expenses, disbursements and advances incurred
or made by the Calculation Agent in connection with the services rendered by it
hereunder, as provided by Section 4 hereof.
Section 9. Appointment of Successor Calculation Agent. Any successor
Calculation Agent appointed by the Issuer or by a court following termination
of this Agreement pursuant to the provisions of Section 8 hereof shall execute
and deliver to the Calculation Agent and to the Issuer an instrument accepting
such appointment, and thereupon such successor Calculation Agent shall, without
any further act or instrument, become vested with all the rights, immunities,
duties and obligations of the Calculation Agent, with the effect as if
originally named as Calculation Agent
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hereunder, and the Calculation Agent shall thereupon be obligated to transfer
and deliver, and such successor Calculation Agent shall be entitled to receive
and accept, copies of any available records maintained by the Calculation Agent
in connection with performance of its obligations hereunder.
Section 10. Indemnification. The Issuer shall indemnify and hold
harmless the Calculation Agent, its officers and employees from and against all
actions, claims, damages, liabilities, losses and expenses (including
reasonable legal fees and expenses) relating to or arising out of actions or
omissions in any capacity hereunder, except actions, claims, damages,
liabilities, losses and expenses caused by the gross negligence or wilful
misconduct of the Calculation Agent, its officers or employees. This Section
10 shall survive the payment in full of all obligations under the Notes,
whether by redemption, repayment or otherwise.
Section 11. Merger, Consolidation or Sale of Business by Calculation
Agent. Any corporation into which the Calculation Agent may be merged,
converted or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Calculation Agent may be a party, or
any corporation to which the Calculation Agent may sell or otherwise transfer
all or substantially all of its corporate trust business, shall, to the extent
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permitted by applicable law, become the Calculation Agent under this Agreement
without the execution of any paper or any further act by the parties hereto.
Section 12. Notices. Any notice or other communication given
hereunder shall be delivered in person, sent by letter, telecopy or telex or
communicated by telephone (subject, in the case of communication by telephone,
to written confirmation dispatched within 24 hours) to the addresses given
below or such other address as the party to receive such notice may have
previously specified:
To the Issuer:
BanPonce Financial Corp.
c/o BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: Chief Financial Officer
Facsimile: (809) 767-8948
To the Calculation Agent:
Citibank, N.A.
120 Wall Street
New York, New York 10043
Attention: Corporate Trust Department
Facsimile: (212) 480-1614
To the Trustee:
Citibank, N.A.
120 Wall Street
New York, New York 10043
Attention: Corporate Trust Department
Facsimile: (212) 480-1614
Any notice hereunder given by letter, telecopy or telex shall be deemed to have
been received when it would have
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been received in the ordinary course of post or transmission, as the case may
be.
Section 13. Benefit of Agreement. Except as provided herein, this
Agreement is solely for the benefit of the parties hereto and their successors
and assigns and no other persons shall acquire or have any rights under or by
virtue hereof.
Section 14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, this Agreement has been entered into the day and
year first above written.
BANPONCE FINANCIAL CORP.
By:_________________________________
Title:
CITIBANK, N.A.
By:_________________________________
Title:
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