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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):
October 6, 1995
BANPONCE CORPORATION
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(Exact name of registrant as specified in its charter)
COMMONWEALTH OF PUERTO RICO NO. 0-13818 NO. 66-0416582
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(State or other jurisdiction (Commission File (IRS employer
of incorporation) 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)(b) Distribution Agreement, dated October 6, 1995, among
BanPonce Corporation, Merrill Lynch & Co., CS First Boston
Corporation and First Chicago Capital Markets, Inc.
(1)(c) Amendment, dated October 6, 1995, to the Distribution
Agreement, dated October 11, 1991, as amended on December 2,
1993, and as supplemented on June 16, 1993 and August 1, 1994,
among BanPonce Financial Corporation, BanPonce Corporation,
Merrill Lynch & Co., CS First Boston Corporation and First
Chicago Capital Markets, Inc.
(4)(l) Form of Fixed Rate Medium-Term Note, Series 2, of BanPonce
Corporation.
(4)(m) Form of Floating Rate Medium-Term Note, Series 2, of BanPonce
Corporation.
(4)(n) Form of Fixed Rate Medium-Term Note, Series C, of BanPonce
Financial Corp., endorsed with the guarantee of BanPonce
Corporation.
(4)(o) Form of Floating Rate Medium-Term Note, Series C, of BanPonce
Financial Corp., endorsed with the guarantee of BanPonce
Corporation.
(5)(c) Opinion of Brunilda Santos de Alvarez, Esq., regarding
BanPonce Corporation Medium-Term Notes, Series 2.
(5)(d) Opinion of Brunilda Santos de Alvarez, Esq., regarding
BanPonce Financial Corp. Medium-Term Notes, Series C.
(5)(e) Opinion of Sullivan & Cromwell BanPonce Corporation
Medium-Term Notes, Series 2.
(5)(f) Opinion of Sullivan & Cromwell regarding BanPonce Financial
Corp. Medium-Term Notes, Series C.
(8)(a) Tax opinion of Sullivan & Cromwell in connection with BanPonce
Corporation Medium-Term Notes, Series 2.
(8)(b) Tax opinion of Sullivan & Cromwell in connection with BanPonce
Financial Corp. Medium-Term Notes, Series C.
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(8)(c) Tax opinion of McConnell Valdes in connection with BanPonce
Corporation Medium-Term Notes, Series 2.
(10)(a) Administrative Procedures governing Medium-Term Notes, Series
2, of BanPonce Corporation.
(10)(b) Administrative Procedures governing Medium-Term Notes, Series
C, of BanPonce Financial Corp., fully guaranteed by BanPonce
Corporation.
(10)(c) Interest Calculation Agency Agreement, dated as of October 6,
1995, between BanPonce Corporation and The First National Bank
of Chicago.
(10)(d) Interest Calculation Agency Agreement, dated as of October 6,
1995, between BanPonce Financial Corp. and The First National
Bank of Chicago.
(23)(c) Consents of Counsel (included in Exhibits (5)(c), (5)(d),
(5)(e), (5)(f), (8)(a), (8)(b), and (8)(c)).
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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
(Registrant)
Date: October 6, 1995 By: /s/ Jose Luis Lopez Calderon
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Name: Jose Luis Lopez Calderon
Title: (Senior Vice President)
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EXHIBIT (1)(b)
BANPONCE CORPORATION
MEDIUM-TERM NOTES DUE FROM
9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
October 6, 1995
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
CS FIRST BOSTON CORPORATION
55 East 52nd Street
New York, New York 10055
FIRST CHICAGO CAPITAL MARKETS, INC.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Ladies and Gentlemen:
BanPonce Corporation, a Puerto Rico corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, CS First Boston Corporation and First Chicago Capital
Markets, Inc. (each, an "Agent" and collectively, the "Agents") with respect to
the issue and sale by the Company of its Medium-Term Notes described herein
(the "Notes"). The Notes are to be issued pursuant to an Indenture, dated as
of February 15, 1995 (the "Indenture"), between the Company and The First
National Bank of Chicago, as trustee (the "Trustee").
As of the date hereof, the Company has authorized the issuance and
sale of Notes with an aggregate initial offering price of up to $1,000,000,000
through the Agents pursuant to the terms of this Agreement. It is understood,
however, that the Company may from time to time authorize the issuance of
additional Notes and that such additional Notes may be sold through or to the
Agents pursuant to the terms of this Agreement, all as though the issuance of
such Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers, in which case the Agents will act as agents of the
Company in soliciting Note purchasers, and, as may from time to time be agreed
to by the Company and any Agent, to such Agent as principal for resale to
purchasers.
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The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (No. 33-61601) for the registration
of debt securities, including the Notes, under the Securities Act of 1933, as
amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the SEC under the 1933
Act (the "1933 Act Regulations"). Such registration statement has been
declared effective by the SEC and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration
statement (and any further registration statements which may be filed by the
Company for the purpose of registering additional Notes and in connection with
which this Agreement is included as an exhibit) and the prospectus constituting
a part thereof, and any prospectus supplements relating to the Notes, including
all documents incorporated therein by reference, as from time to time amended
or supplemented by the filing of documents pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), or the 1933 Act or otherwise, are
referred to herein collectively as the "Registration Statement" and the
"Prospectus", respectively, except that if any revised prospectus shall be
provided to the Agents by the Company for use in connection with the offering
of the Notes which is not required to be filed by the Company pursuant to Rule
424(b) of the 1933 Act Regulations, the term "Prospectus" shall refer to such
revised prospectus from and after the time it is first provided to the Agents
for such use.
SECTION 1. Appointment as Agents.
(a) Appointment of Agents. Subject to the terms and conditions
stated herein and subject to the reservation by the Company of the right to
sell Notes directly on its own behalf, the Company hereby appoints each Agent
as its agent for the purpose of soliciting purchases of the Notes from the
Company by others and agrees that, except as otherwise contemplated herein,
whenever the Company determines to sell Notes directly to an Agent as principal
for resale to others, it will enter into a Terms Agreement (hereafter defined)
relating to such sale in accordance with the provisions of Section 3(b) hereof.
The Agents are not authorized to appoint sub-agents or to engage the services
of any other broker or dealer in connection with the offer or sale of the
Notes. The Company agrees that, during the period that the Agents are acting
as the Company's agents hereunder, the Company will not contact or solicit
potential investors introduced to it by the Agents to purchase the Notes.
Notwithstanding anything to the contrary contained herein, the Company may,
upon one day's prior written notice to the Agents, authorize any other person,
partnership or corporation (an "Additional Agent") to act as its agent to
solicit offers for the purchase of all or part of the Notes of the Company.
Unless the Agents otherwise agree, the appointment of an Additional Agent shall
be effected by the Company's addition of the name and address of the Additional
Agent to the signature page of a
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counterpart of this Agreement, the execution of such counterpart by the
Additional Agent, and the delivery of executed copies of such counterpart to
each Agent and its counsel. Thereafter the term "Agents" as used in this
Agreement shall mean the Agents and such Additional Agent. At such time, the
Additional Agent shall specify its requirement for the delivery of
certificates, letters and opinions as are set forth in Section 5 hereof. 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.
(b) Reasonable Efforts Solicitations; Right to Reject Offers.
Upon receipt of instructions from the Company, each Agent will use its
reasonable efforts to solicit purchases of such principal amount of the Notes
as the Company and such Agent shall agree upon from time to time during the
term of this Agreement, it being understood that the Company shall not approve
the solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the principal
amount of Notes registered pursuant to the Registration Statement. The Agents
will have no responsibility for maintaining records with respect to the
aggregate principal amount of Notes sold, or of otherwise monitoring the
availability of Notes for sale under the Registration Statement. Each Agent
will communicate to the Company, orally or in writing, each offer to purchase
Notes from such Agent, other than those offers rejected by such Agent. Each
Agent shall have the right, in its discretion reasonably exercised, to reject
any proposed purchase of Notes, as a whole or in part, and any such rejection
shall not be deemed a breach of such Agent's agreement contained herein. The
Company may accept or reject any proposed purchase of the Notes, in whole or in
part.
(c) Solicitations as Agent; Purchases as Principal. In soliciting
purchases of the Notes on behalf of the Company, each Agent shall act solely as
agent for the Company and not as principal. Each Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company. No Agent shall have any liability to the Company in the event any
such purchase is not consummated for any reason, except in the event that such
sale is not consummated due to the failure of such Agent to perform its
obligations hereunder. No Agent shall have an obligation to purchase Notes
from the Company as principal, but any Agent may agree from time to time to
purchase Notes as principal. Any such purchase of Notes by an Agent as
principal
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shall be made pursuant to a Terms Agreement in accordance with Section 3(b)
hereof.
(d) Reliance. The Company and each Agent agree that any Notes the
placement of which such Agent arranges shall be placed by such Agent, and any
Notes purchased by an Agent shall be purchased in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties of the Company.
(a) The Company represents and warrants to the Agents as of the
date hereof, as of the date of each acceptance by the Company of an offer for
the purchase of Notes (whether through an Agent as agent or to an Agent as
principal), as of the date of each delivery of Notes (whether through an Agent
as agent or to an Agent as principal) (the date of each such delivery to an
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of any time that the Registration Statement or the Prospectus shall be amended
or supplemented (other than by an amendment or supplement providing solely for
a change in the interest rates of Notes or similar changes and other than an
amendment or supplement that relates to an offering of debt securities other
than the Notes) or there is filed with the SEC any document incorporated by
reference into the Prospectus (other than any Current Report on Form 8-K
relating exclusively to the issuance of debt securities other than the Notes
under the Registration Statement) (each of the times referenced above being
referred to herein as a "Representation Date") as follows:
(i) Due Incorporation and Qualification. The Company has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the Commonwealth of Puerto Rico with
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus; the
Company is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "Bank Holding Company
Act"); and the Company is not required to register as a foreign
corporation in any jurisdiction in order to conduct the business
presently conducted by it.
(ii) Subsidiaries. Each subsidiary of the Company which
is a significant subsidiary as defined in Rule 405 of Regulation C of
the 1933 Act Regulations (each, a "Significant Subsidiary") has been
duly incorporated and is validly existing as a corporation or a bank
in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business
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and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify and be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; and all of the
issued and outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable (subject to the provisions of Section 55 of Title
12 of the United States Code in the case of Significant Subsidiaries
which are national banking associations) and, except as otherwise
disclosed in the Prospectus and except for directors' qualifying
shares, is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity or, if such is not the case, that any
such security interest, mortgage pledge, lien, encumbrance, claim or
equity, when exercised, enforced or otherwise asserted, will not have
a material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(iii) Registration Statement and Prospectus. At the time
the Registration Statement became effective, the Registration
Statement complied, and as of the applicable Representation Date will
comply, in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the SEC promulgated thereunder. The Registration
Statement, at the time it became effective, did not, and at each time
thereafter at which any amendment to the Registration Statement
becomes effective and any Annual Report on Form 10-K is filed by the
Company with the SEC and as of each Representation Date will not,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus, as of the date
hereof does not, and as of each Representation Date will not, contain
an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by
the Agents expressly for use in the Registration Statement or
Prospectus.
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(iv) Incorporated Documents. The documents incorporated
or deemed to be incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the SEC, complied or when
so filed will comply, as the case may be, in all material respects
with the requirements of the 1934 Act and the rules and regulations
promulgated thereunder (the "1934 Act Regulations"), and, when read
together and with the other information in the Prospectus, did not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were or are made, not misleading.
(v) Accountants. The accountants who certified the
financial statements and supporting schedules included or incorporated
by reference in the Prospectus are independent public accountants
within the meaning of the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial
statements and any supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the
consolidated results of their operations for the periods specified;
except as stated therein, said financial statements have been prepared
in conformity with generally accepted accounting principles in the
United States applied on a consistent basis during the periods
involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated
therein.
(vii) Authorization and Validity of this Agreement, the
Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company; the Indenture has been duly
authorized and is a valid and binding obligation of the Company
enforceable in accordance with its terms subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
similar laws of general applicability relating to or affecting
creditors rights and to general equity principles; the Notes have been
duly and validly authorized for issuance, offer and sale pursuant to
this Agreement and, when issued, authenticated and delivered pursuant
to the provisions of this Agreement and the Indenture against payment
of the consideration therefor specified in the Prospectus or pursuant
to any Terms Agreement, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws relating to or affecting
creditors'
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rights generally and to general equity principles; the Notes and the
Indenture will be substantially in the form heretofore delivered to
the Agents and conform in all material respects to all statements
relating thereto contained in the Prospectus; and the Notes will be
entitled to the benefits provided by the Indenture.
(viii) Material Changes or Material Transactions. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as may otherwise be stated
therein or contemplated thereby, there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business.
(ix) No Defaults; Regulatory Approvals. Neither the
Company nor any of the Significant Subsidiaries is in violation of its
charter or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or any of them or
their properties may be bound; the execution, delivery and performance
of this Agreement and the Indenture and the consummation of the
transactions contemplated herein, therein and pursuant to any
applicable Terms Agreement have been duly authorized by all necessary
corporate action and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of the Significant Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company or any of its subsidiaries is a party or by which
it or any of them may be bound or to which any of the property or
assets of the Company or any such subsidiary is subject, nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any such subsidiary or any law,
administrative regulation or administrative or court order or decree
which breach, default, imposition or violation would, in each case,
have a material adverse effect on the Company and its subsidiaries
taken as a whole; and no consent, approval, authorization, order or
decree of any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this
Agreement, except such as have already been obtained or as may be
required under the 1933 Act or the 1933 Act Regulations (which have
been obtained), the 1939 Act or state securities or Blue Sky laws.
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(x) Legal Proceedings; Contracts. Except as may be set
forth in the Registration Statement, there is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against or affecting, the Company or any of its
subsidiaries, which might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, or might materially and adversely affect
the consummation of this Agreement or any Terms Agreement; and there
are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed or incorporated by
reference as exhibits to the Registration Statement by the 1933 Act or
by the 1933 Act Regulations which have not been so filed or
incorporated by reference.
(xi) Regulatory Certificates, Authorities and Permits.
The Company and the Significant Subsidiaries possess adequate
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them except for such certificates,
authorities or permits as are not material to the business,
operations, financial condition or income of the Company or the
Significant Subsidiaries; and neither the Company nor any of the
Significant Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially
adversely affect the conduct of the business, operations, financial
condition or income of the Company and its subsidiaries considered as
one enterprise.
(b) Additional Certifications. Any certificate signed by any
officer of the Company and delivered to the Agents or to counsel for the Agents
in connection with an offering of Notes or the sale of Notes to an Agent as
principal shall be deemed a representation and warranty by the Company to the
Agents (or, in the case of a sale of Notes to an Agent as principal, to such
Agent) as to the matters covered thereby on the date of such certificate.
SECTION 3. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions herein
set forth, each Agent agrees, as agent of the Company, to use its reasonable
efforts to solicit offers to purchase the Notes upon the terms and conditions
set forth herein and in the Prospectus.
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The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agents, as agents,
commencing at any time for any period of time or permanently. Upon receipt of
instructions from the Company, the Agents will forthwith suspend solicitation
of purchases from the Company until such time as the Company has advised the
Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as
set forth in Schedule A hereto. Each such Agent may reallow any portion of the
commission payable pursuant hereto to dealers or purchasers in connection with
the offer and sale of any Notes.
The purchase price, interest rate, maturity date and other terms of
the Notes shall be agreed upon by the Company and each Agent and set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance
by the Company of an offer for the purchase of Notes. Except as may be
otherwise provided in such supplement to the Prospectus, the Notes will be
issued in denominations of $1,000 and integral multiples thereof. All Notes
sold through any Agent as agent will be sold at 100% of their principal amount
unless otherwise agreed to by the Company and such Agent.
(b) Purchases as Principal. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms contained herein and
(unless the Corporation and such Agent shall otherwise agree) pursuant to a
separate agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, such Agent. Each such separate agreement
(which may be an oral agreement confirmed in writing) between such Agent and
the Company is herein referred to as a "Terms Agreement". Unless the context
otherwise requires, each reference contained herein to "this Agreement" shall
be deemed to include any applicable Terms Agreement between the Company and an
Agent. Each such Terms Agreement, whether oral or in writing, shall be with
respect to such information (as applicable) as is specified in Exhibit A
hereto. Each Agent's commitment to purchase Notes as principal pursuant to any
Terms Agreement or otherwise shall be deemed to have been made on the basis of
the representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Notes to be purchased by the Agent
pursuant thereto, the price to be paid to the Company for such Notes (which, if
not so specified in a Terms Agreement, shall be at a discount equivalent to the
applicable commission set forth in Schedule A hereto), the time and place of
delivery of and payment for such Notes and such other provisions (including
further terms of the Notes) as may be mutually agreed upon. Each Agent may
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utilize a selling or dealer group in connection with the resale of the Notes
purchased. Unless expressly provided for in the Terms Agreement, no opinions,
letters or certificates shall be delivered by the Company in connection with
the sale of Notes to each Agent as principal.
(c) Administrative Procedures. Administrative procedures with
respect to the sale of Notes shall be agreed upon from time to time by the
Agents and the Company (the "Procedures"). The Agents and the Company agree to
perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of Certain Events. The Company will notify each Agent
immediately (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the filing of any supplement to the Prospectus relating to
the Notes or any document to be filed pursuant to the 1934 Act which will be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the SEC with respect to the Registration Statement or the
Prospectus, (iv) of any request by the SEC for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Company will use reasonable efforts to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof.
(b) Notice of Certain Proposed Filings. Except as otherwise
provided in subsection (1) of this Section, the Company will give each Agent
notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
(other than an amendment or supplement providing solely for a change in the
interest rates of Notes and other than an amendment or supplement that relates
to an offering of debt securities other than the Notes), whether by the filing
of documents pursuant to the 1934 Act, the 1933 Act or otherwise, and will
furnish each Agent with copies of any such amendment or supplement or other
documents proposed to be filed or prepared a reasonable time in advance of such
proposed filing or preparation, as the case may be, except for documents filed
pursuant to the 1934 Act, which the Company shall furnish to each Agent
immediately after the filing thereof, and will not file any such amendment or
supplement other than a document filed pursuant to the 1934 Act in a form to
which you or your counsel shall reasonably object.
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(c) Copies of the Registration Statement and the Prospectus. The
Company will deliver to each Agent as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as such Agent may
reasonably request. The Company will furnish each Agent with as many copies of
the Prospectus (as amended or supplemented) as such Agent shall reasonably
request so long as such Agent is required to deliver a Prospectus in connection
with sales or solicitations of offers to purchase the Notes.
(d) Preparation of Pricing Supplements. The Company will prepare,
with respect to any Notes to be sold through the Agents pursuant to this
Agreement, a Pricing Supplement with respect to such Notes and will file such
Pricing Supplement pursuant to Rule 424(b)(3) under the 1933 Act not later than
the close of business of the SEC on the fifth business day after the date on
which such Pricing Supplement is first used.
(e) Revisions of Prospectus -- Material Changes. Except as
otherwise provided in subsection (l) of this Section, if at any time during the
term of this Agreement any event shall occur or condition exist as a result of
which it is necessary, to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances in which they were made, not misleading or if it
shall be necessary to amend or supplement the Registration Statement or the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, immediate notice shall be given, and confirmed in writing, to
the Agents to cease the solicitation of offers to purchase the Notes in the
Agents' capacity as agents and to cease sales of any Notes any Agent may then
own as principal pursuant to a Terms Agreement, and the Company will promptly
prepare and file with the SEC such amendment or supplement, whether by filing
documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information.
Except as otherwise provided in subsection (l) of this Section, on the date on
which there shall be released to the general public interim consolidated
financial statement information related to the Company with respect to each of
the first three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and promptly thereafter shall
cause the Registration Statement and the Prospectus to be amended or
supplemented to include or incorporate
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by reference capsule financial information with respect to the results of
operations of the Company and its consolidated subsidiaries for such period.
(g) Prospectus Revisions -- Audited Financial Information. Except
as otherwise provided in subsection (l) of this Section, on the date on which
there shall be released to the general public financial information included in
the audited consolidated financial statements of the Company for the preceding
fiscal year, the Company shall cause the Registration Statement and the
Prospectus to be amended, whether by the filing of documents pursuant to the
1934 Act, the 1933 Act or otherwise, to include or incorporate by reference
such audited financial statements and the report or reports, and consent or
consents to such inclusion or incorporation by reference, of the independent
accountants with respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) Earnings Statements. The Company will make generally
available to the security holders of the Company as soon as practicable, but
not later than 90 days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of Rule 158 under the
1933 Act) covering each twelve month period beginning, in each case, not later
than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in such Rule 158) of the Registration Statement
with respect to each sale of Notes.
(i) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Agents and the Company shall agree and, unless the Company
otherwise notifies the Agents, will maintain such qualifications in effect for
as long as may be required for the distribution of the Notes; provided,
however, that the Company shall not be required to submit to general service of
process in any jurisdiction. The Company will promptly advise the Agents of
their receipt of any notification with respect to the suspension of the
qualification of the Notes for sale in any such state or jurisdiction or the
initiating or threatening of any proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the
time that Prospectus is required to be delivered under the 1933 Act, will file
promptly all documents required to be filed with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act.
(k) Stand-Off Agreement. If required pursuant to the terms of a
Terms Agreement between the Company and any Agent, between the date of any
Terms Agreement and the Settlement Date with respect to
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such Terms Agreement, the Company will not, without such Agent's prior consent,
offer or sell, or enter into any agreement to sell, any debt securities of the
Company (other than the Notes that are to be sold pursuant to such Terms
Agreement and commercial paper).
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (b), (e), (f) or (g) of
this Section during any period from the time (i) the Agents shall have
suspended solicitation of purchases of the Notes in their capacity as agents
pursuant to a request from the Company and (ii) no Agent shall then hold any
Notes as principal purchased pursuant to a Terms Agreement, to the time the
Company shall determine that solicitation of purchases of the Notes should be
resumed or shall subsequently enter into a new Terms Agreement with such Agent.
(m) Public Reports. The Company will furnish to the Agents, at
the earliest time the Company makes the same available to others, copies of
their annual reports and other financial reports furnished or made available to
the public generally.
SECTION 5. Conditions of Obligations.
The obligations of each Agent to solicit offers to purchase the Notes
as agent of the Company, the obligations of any purchasers of the Notes sold
through such Agent as agent, and any obligation of an Agent to purchase Notes
pursuant to a Terms Agreement or otherwise will be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
and to the accuracy of the statements of the officers of the Company made in
any certificate furnished pursuant to the provisions hereof, to the performance
and observance by the Company of all their respective covenants and agreements
herein contained and to the following additional conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and in form
and substance satisfactory to the Agents:
(1) Opinion of Counsel to the Company. The opinion of
Sullivan & Cromwell, Counsel to the Company to the effect that:
(i) The Company is duly registered as a bank
holding company under the Bank Holding Act.
(ii) The Indenture has been duly authorized,
executed and delivered by the Company and duly qualified under
the Trust Indenture Act of 1939 and constitutes a valid and
legally binding obligation to the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer,
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reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
(iii) The series of Notes has been duly authorized
and established in conformity with the Indenture, and, when
the terms of a particular Note and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, such Note
has been duly prepared, executed, authenticated and issued in
accordance with the Indenture and delivered against payment in
accordance with this Agreement, such Note will constitute a
valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(iv) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company on or prior to the date hereof under the federal laws
of the United States and the laws of the State of New York for
the issuance, sale and delivery of the Notes by the Company to
or through one or more Agents have been obtained or made;
provided, however, that such counsel need express no opinion
with respect to state securities laws.
(v) This Agreement has been duly authorized,
executed and delivered by the Company.
(vi) The execution and delivery by the Company of
the Indenture did not, and the execution and delivery by the
Company of this Agreement do not, and the preparation,
execution and issuance of each particular Note in accordance
with the Indenture, the sale by the Company of such Note in
accordance with this Agreement, and the performance by the
Company of its obligations under the Indenture, this Agreement
and the Notes will not (a) violate the articles of
incorporation or by-laws of the Company as in effect on the
date hereof, or (b) violate any existing federal law of the
United States applicable to the Company; provided, however,
that, for the purposes of this paragraph (xi), such counsel
need express no opinion with respect to federal or state
securities laws, other antifraud laws, fraudulent transfer
laws, the Employee Retirement Income Security Act of 1974 and
related laws, and laws that restrict transactions between
United States persons and certain foreign countries; provided,
further, that insofar as
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performance by the Company of its obligations under the Indenture,
this Agreement and the Notes is concerned, such counsel need express
no opinion as to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights.
(vii) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge, (i)
no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and (ii) no
proceedings therefor have been initiated or threatened by the
SEC.
(viii) As counsel to the Company such counsel has
reviewed the Registration Statement and the Prospectus,
participated in discussions with representatives of the
Agents, the Company and their accountants, and advised the
Company as to the requirements of the 1933 Act and the
applicable rules and regulations thereunder, and on the basis
of the information that such counsel gained in the course of
the performance of their services considered in the light of
their understanding of the applicable law, including the
requirements of Form S-3 and the character of the prospectus
contemplated thereby, and the experience they have gained
through their practice under the 1933 Act, such counsel
confirm that, in their opinion, each part of the Registration
Statement, when such part became effective, and the
Prospectus, as of the date of the prospectus supplement
forming part thereof, appeared on their face to be
appropriately responsive in all material respects to the
requirements of the 1933 Act, the Trust Indenture Act, and the
applicable rules and regulations of the SEC thereunder; and
that nothing has come to their attention in the course of
their review that has caused them to believe that any part of
the Registration Statement, when such part became effective or
(if such opinion is being delivered in connection with a Terms
Agreement pursuant to Section 3(b) hereof) at the date of any
Terms Agreement and at the Settlement Date with respect
thereto, as the case may be, contains or contained any untrue
statement of a material fact or omits or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading; or that the
Prospectus, on the date of the Prospectus Supplement forming
part thereof, or (if such opinion is being delivered in
connection with a Terms Agreement pursuant to Section 3(b)
hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto, as the case may be,
contains or contained any untrue statement of a material fact
or omits or omitted to state a
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material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. Such counsel may say that the limitations inherent in the
independent verification of factual matters and the character of
determinations involved in the registration process are such that they
do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus except (i) for those made under the captions
"Description of Debt Securities and Guarantees" and "Plan of
Distribution" and the appropriate sections in any Prospectus
Supplement describing the securities offered thereby, insofar as they
relate to provisions of documents therein described and (ii) the
accuracy of the descriptions of the Federal laws of the United States
contained in the Registration Statement and Prospectus under the
captions "Certain Regulatory Matters" and "United States Taxation" and
that they do not express any opinion or belief as to the financial
statements or other financial data contained in the Registration
Statement and the Prospectus, as to the statement of the eligibility
and qualification of the Trustee under the Indenture; and that their
letter is furnished as counsel for the Company to the Agents and is
solely for the benefit of the Agents.
Such counsel may base their opinions, as to certain questions of fact,
on certificates of officers of the Company and may rely as to all matters
relating to the laws of the Commonwealth of Puerto Rico upon the opinion of
Brunilda Santos de Alvarez, delivered pursuant to Section 5(b)(2) hereof.
(2) Opinion of Puerto Rico Counsel to the Company. The opinion of
Brunilda Santos de Alvarez, Puerto Rico Counsel to the Company, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the Commonwealth of Puerto Rico.
(ii) The Company has corporate power and authority
to own, lease and operate its properties and conduct its
business as described in the Registration Statement.
(iii) The Company is not required to register as a
foreign corporation in any jurisdiction in order to conduct
the business presently conducted by it.
(iv) Each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation or
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a bank in good standing under the laws of the
jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties and
conduct its business as described in the Registration
Statement, and, to the best of such counsel's knowledge and
information, is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which it owns or leases substantial properties or in which
such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business;
except where the failure to so qualify and be in good standing
would not have a material adverse effect on the Company and
its subsidiaries taken as a whole; and all of the issued and
outstanding capital stock of each such Significant Subsidiary
has been duly authorized and validly issued and is fully paid
and non-assessable (subject to the provisions of Section 55 of
Title 12 of the United States code in the case of Significant
Subsidiaries which are national banking associations) and,
except for directors' qualifying shares, is owned, directly or
through such subsidiaries, by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(v) This Agreement has been duly authorized,
executed and delivered by the Company.
(vi) The Indenture has been duly and validly
authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(vii) The series of Notes has been duly authorized
and established in conformity with the Indenture, and, when
the terms of a particular Note and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, such Note
has been duly prepared, executed, authenticated and issued in
accordance with the Indenture and delivered against payment in
accordance with this Agreement, such Note will constitute a
valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
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(viii) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company on or prior to the date hereof under the federal laws
of the United States and the General Corporation Law of the
Commonwealth of Puerto Rico for the issuance, sale and
delivery of the Notes by the Company to or through one or more
Agents have been obtained or made; provided, however, that
such counsel need express no opinion with respect to state
securities laws.
(ix) To the best of such counsel's knowledge, neither
the Company nor any of the Significant Subsidiaries is in
violation of its charter or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note or lease known to such counsel to which it or
any of them is a party or by which their properties may be
bound; the execution and delivery by the Company of the
Indenture and the Distribution Agreement and any Terms
Agreement do not, and the preparation, execution and issuance
of each particular Note in accordance with the Indenture, the
sale by the Company of such Note in accordance with the
Distribution Agreement, and the performance by the Company of
its respective obligations under the Indenture, the
Distribution Agreement, the Notes and any Terms Agreement will
not (a) violate the articles of incorporation or by-laws of
the Company, (b) violate any Federal law of the United States
or any law of the Commonwealth of Puerto Rico existing on the
date of such opinion or any administrative regulation or
administrative or court decree applicable to the Company or
any Significant Subsidiary or (c) conflict with or constitute
a breach of, or a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Significant
Subsidiaries pursuant to any contract, indenture, mortgage,
loan agreement, note, lease or other instrument known to such
counsel to which the Company or any of the Significant
Subsidiaries is a party or by which any of them may be bound,
or to which any of the property or assets of the Company or
any of the Significant Subsidiaries is subject, which breach,
default, imposition or violation would, in each case, have a
material adverse effect on the Company and its subsidiaries
taken as a whole; provided, however, that such counsel need
express no opinion with respect to Federal securities laws,
other antifraud laws, fraudulent transfer laws, the Employee
Retirement Income Security Act of 1974 and related laws, and
laws that restrict
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transactions between United States persons and citizens
or residents of certain foreign countries; provided, further,
that insofar as performance by the Company of its obligations
under the Indenture, the Distribution Agreement, any Terms
Agreement and the Notes is concerned, such counsel need
express no opinion as to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights.
(x) To the best of such counsel's knowledge and
information, there are no legal or governmental proceedings
pending or threatened which are required to be disclosed in
the Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the Company
or any of its subsidiaries is a party or to which any of its
property or assets is subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business of the Company or any such
subsidiary, are, considered in the aggregate, not material.
(xi) To the best of such counsel's knowledge,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments or documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto; and the descriptions thereof or
references thereto are correct in all material respects.
(xii) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the SEC.
(xiii) At the time the Registration Statement became
effective, the Registration Statement (other than the
financial statements, schedules and other financial data
included or incorporated by reference therein as to which no
opinion need be rendered by such counsel) complied as to form
in all material respects with the requirements of the 1933
Act, the 1939 Act and the regulations under each of those
acts.
(xiv) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus compiled
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when filed as to form in all material respects with the 1934
Act and the 1934 Act Regulations thereunder.
(xv) As counsel to the Company such counsel has reviewed
the Registration Statement and the Prospectus, participated in
discussions with representatives of the Agents, the Company
and their accountants, and advised the Company as to the
requirements of the 1933 Act and the applicable rules and
regulations thereunder, and on the basis of the information
that such counsel gained in the course of the performance of
her services considered in the light of her understanding of
the applicable law, including the requirements of Form S-3 and
the character of the prospectus contemplated thereby, such
counsel confirms that, in her opinion, each part of the
Registration Statement, when such part became effective, and
the Prospectus, as of the date of the prospectus supplement
forming part thereof, appeared on their face to be
appropriately responsive in all material respects to the
requirements of the 1933 Act, the Trust Indenture Act, and the
applicable rules and regulations of the SEC thereunder; and
that nothing has come to her attention in the course of her
review that has caused her to believe that any part of the
Registration Statement, when such part became effective
(within the meaning of the 1933 Act) or (if such opinion is
being delivered in connection with a Terms Agreement pursuant
to Section 3(b) hereof) at the date of any Terms Agreement and
at the Settlement Date with respect thereto, as the case may
be, contains or contained any untrue statement of a material
fact or omits or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading; or that the Prospectus, on the date of
the Prospectus Supplement forming part thereof, or (if such
opinion is being delivered in connection with a Terms
Agreement pursuant to Section 3(b) hereof) at the date of any
Terms Agreement and at the Settlement Date with respect
thereto, as the case may be, contains or contained any untrue
statement of a material fact or omits or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading. Such counsel may say that the
limitations inherent in the independent verification of
factual matters and the character of determinations involved
in the registration process are such that she does not assume
any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or
the Prospectus except for those made under the captions
"Certain Regulatory Matters", "Description of Debt Securities
and Guarantees" and "Plan of Distribution" and the appropriate
sections in any
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Prospectus Supplement describing the securities offered
thereby and under "Regulation and Supervision" in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, insofar as they relate to provisions of
documents therein described and that she does not express any
opinion or belief as to the financial statements or other
financial data contained in the Registration Statement and the
Prospectus, as to the statement of the eligibility and
qualification of the Trustee under the Indenture; and that her
letter is furnished as counsel for the Company to the Agents
and is solely for the benefit of the Agents.
Such counsel may base her opinion, as to certain questions of
fact, on certificates of officers of the Company and may rely as to
all matters relating to the laws of the State of New York upon the
opinion of Sullivan & Cromwell, delivered pursuant to Section 5(a)(1).
(3) Opinion of Counsel to the Agents. The opinion of
Brown & Wood, counsel to the Agents, covering the matters referred to
in subparagraph (1) above under the subheadings (i), (v), (vi), (viii)
and (x) and in subparagraph (2) above under the subheading (xi).
(4) In giving its opinion required by subsection (a)(3)
of this Section, Brown & Wood shall additionally state that nothing
has come to their attention that would lead them to believe that the
Registration Statement (other than the financial statements, schedules
and other financial data included or incorporated by reference therein
as to which no opinion need be rendered by such counsel), at the time
it became effective, and if an amendment to the Registration Statement
or an Annual Report on Form 10-K has been filed by the Company with
the SEC subsequent to the effectiveness of the Registration Statement,
then at the time such amendment became effective or at the time of the
most recent such filing, and at the date hereof, or (if such opinion
is being delivered in connection with a Terms Agreement pursuant to
Section 3(b) hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto, as the case may be, contains or
contained an untrue statement of a material fact or omits or omitted
to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the
Prospectus (other than the financial statements, schedules and other
financial data included or incorporated by reference therein as to
which no opinion need be rendered by such counsel), as amended or
supplemented at the date hereof, or (if such opinion is being
delivered in connection with a Terms Agreement pursuant to Section
3(b) hereof) at the date of any Terms Agreement and at the Settlement
Date with respect thereto, as the case may be,
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contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(b) Officer's Certificates. At the date hereof, the Agents shall
have received certificates of the President or Vice President of the Company,
dated as of the date hereof, to the effect that (i) since the respective dates
as of which information is given in the Registration Statement and the
Prospectus or since the time that any applicable Terms Agreement was entered
into, there has not been any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) the other
representations and warranties of the Company contained in Section 2 hereof are
true and correct with the same force and effect as though expressly made at and
as of the date of such certificate, (iii) the Company has performed or complied
with all agreements and satisfied all conditions on their respective parts to
be performed or satisfied at or prior to the date of such certificate, and (iv)
that no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the SEC.
(c) Comfort Letter. The Agents on the date hereof (and any Agent
who is party to a Terms Agreement, on the Settlement Date with respect to such
Terms Agreement, if required by such Terms Agreement), shall receive a letter
from Price Waterhouse LLP, the Company's independent public accountants, dated
as of the date hereof or such Settlement Date, in form and substance reasonably
satisfactory to the Agents containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
contemplated by Statement of Auditing Standards No. 72 with respect to the
financial statements and certain financial information contained in or
incorporated by reference in the Registration Statement and the Prospectus, and
confirming that they are independent accountants within the meaning of the 1933
Act and the 1933 Act Rules.
(d) Other Documents. On the date hereof and on each Settlement
Date with respect to any applicable Terms Agreement, counsel to the Agents
shall have been furnished with such documents as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related proceedings and all
proceedings taken by the Company in connection with the issuance and sale of
Notes as herein contemplated shall be satisfactory in form and substance to the
Agents and to counsel to the Agents.
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If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Agents (or any applicable Terms Agreement may, at the option
of the Agent who is party to such Terms Agreement, be terminated by such Agent)
by notice to the Company at any time and any such termination shall be without
liability of any party to any other party, except that the covenant regarding
provision of an earnings statement set forth in Section 4(h) hereof, the
provisions concerning payment of expenses under Section 10 hereof, the
indemnity and contribution agreement set forth in Sections 8 and 9 hereof, the
provisions of Section 11 hereof concerning the survival of representations,
warranties and agreements following delivery hereof, the provisions set forth
under "Parties" of Section 15 hereof and the provisions of Section 16 hereof
shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold through the Agents.
Delivery of Notes sold through the Agents as agents shall be made by
the Company to the Agents for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, the Agents shall promptly notify the Company and deliver
the Note to the Company, and, if the Agents have theretofore paid the Company
for such Note, the Company will promptly return such funds to the Agents. If
such failure occurred for any reason other than default by the Agents in the
performance of their obligations hereunder, the Company will reimburse the
Agents on an equitable basis for their loss of the use of the funds for the
period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants with the Agents as follows:
(a) Reaffirmation of Representations and Warranties. Each
acceptance by it of an offer for the purchase of Notes, and each delivery of
Notes to an Agent pursuant to a Terms Agreement, shall be deemed to be an
affirmation that the representations and warranties of the Company contained in
this Agreement and in any certificate theretofore delivered to the Agents or an
Agent, as the case may be, pursuant hereto are true and correct at the time of
such acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to the purchaser or his agent, or to the Agents or an Agent, as the case may
be, of the Note or Notes relating to such acceptance or sale, as the case may
be, as though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration
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Statement and Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rates of Notes or similar changes and other than by an amendment or
supplement which relates exclusively to an offering of debt securities other
than the Notes or an offering of preferred stock of the Company or its
subsidiaries) or there is filed with the SEC any document incorporated by
reference into the Prospectus (other than (i) any Current Report on Form 8-K
relating exclusively to the issuance of debt securities or preferred stock
under the Registration Statement or (ii) a document filed pursuant to Section
14 of the 1934 Act unless requested by the Agents) or (if required pursuant to
the terms of a Terms Agreement) the Company sells Notes to an Agent pursuant to
a Terms Agreement, the Company shall furnish or cause to be furnished to the
Agents (or, in the case of a sale of Notes to an Agent pursuant to a Terms
Agreement, to such Agent) forthwith certificates dated the date of filing with
the SEC of such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form satisfactory
to the Agents or such Agent, as the case may be, to the effect that the
statements contained in the certificates referred to in Section 5(b) hereof
which were last furnished to the Agents are true and correct at the time of
such amendment, supplement, filing or sale, as the case may be, as though made
at and as of such time (except that such statements shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented to
such time) or, in lieu of such certificates, certificates of the same tenor as
the certificates referred to in said Section 5(b), modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificates.
(c) Subsequent Delivery of Legal Opinions. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rates of the Notes or similar changes or solely for the inclusion of
additional financial information, and, unless the Agents shall otherwise
specify, other than by an amendment or supplement which relates exclusively to
an offering of debt securities other than the Notes or an offering of preferred
stock of the Company or its subsidiaries) or there is filed with the SEC any
document incorporated by reference into the Prospectus (other than (i) any
Current Report on Form 8-K or (ii) a document filed pursuant to Section 14 of
the 1934 Act, in each case, unless the Agents shall otherwise reasonably
request), or (if required pursuant to the terms of a Terms Agreement) the
Company sells Notes to an Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to the Agents (or,
24
<PAGE> 25
in the case of a sale of Notes to an Agent pursuant to a Terms Agreement, to
such Agent), with a copy to counsel to the Agents, a written opinion or
opinions of Puerto Rico Counsel to the Company satisfactory to the Agents or
such Agent, as the case may be, dated the date of filing with the SEC of such
supplement or document, the date of effectiveness of such amendment, or the
date of such sale, as the case may be, in form and substance satisfactory to
the Agents or such Agent, as the case may be, of the same tenor as the opinion
referred to in Section 5(a)(2) hereof, but modified, as necessary, to relate to
the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such opinion; or, in lieu of such opinion or opinions,
counsel last furnishing such opinion to the Agents or such Agent, as the case
may be, shall furnish the Agents or such Agent, as the case may be, with a
letter to the effect that the Agents or such Agent, as the case may be, may
rely on such last opinion to the same extent as though it was dated the date of
such letter authorizing reliance (except that statements in such last opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter authorizing
reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the SEC any
document incorporated by reference into the Prospectus which contains
additional financial information (other than a Current Report on Form 8-K filed
solely for the purpose of incorporating a press release relating to the
Company's interim or annual financial statements or results of operations or
filed in connection with the issuance of preferred stock by the Company or its
subsidiaries pursuant to the Registration Statement) or (if required pursuant
to the terms of a Terms Agreement) the Company sells Notes to an Agent pursuant
to a Terms Agreement, the Company shall cause Price Waterhouse LLP forthwith to
furnish the Agents (or, in the case of a sale of Notes to an Agent pursuant to
a Terms Agreement, to such Agent) with a letter, dated the date of
effectiveness of such amendment, supplement or document with the SEC, or the
date of such sale, as the case may be, in form satisfactory to the Agents or
such Agent, as the case may be, of the same tenor as the portions of the letter
referred to in Section 5(c) hereof but modified to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date of such
letter; provided, however, that if the Registration Statement or the Prospectus
is amended or supplemented solely to include financial information as of and
for a fiscal quarter, Price Waterhouse LLP may limit the scope of such letter
to the unaudited financial statements included in such amendment or supplement
unless any other information included therein of an accounting, financial or
statistical nature is of such a nature that, in the reasonable judgment of the
Agents or such Agent, as the case may be, such letter should cover such other
information.
25
<PAGE> 26
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls
such Agent within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, unless such untrue statement or omission or alleged untrue
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company by the Agents expressly
for use in the Registration Statement or the Prospectus;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Agents), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above.
The indemnity is subject to the condition that, insofar as it relates to any
untrue statement or omission, or any alleged untrue statement or omission, made
in the Prospectus but eliminated or remedied in an amended or supplemented
Prospectus at the time of the sale of the related Note, it shall not inure to
the benefit of any Agent (or to the benefit of any person who controls any such
Agent) if a copy of the Prospectus as amended or supplemented at the time of
the sale of such Note, excluding documents incorporated
26
<PAGE> 27
therein by reference, was not sent or given to such person at or prior to the
time required by the 1933 Act and the receipt of such Prospectus as amended or
supplemented would have constituted a sufficient defense to the claim asserted
by such person.
(b) Indemnification of the Company. Each Agent agrees to
indemnify and hold harmless the Company, its directors, the officers who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Agent expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) General. Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of
more than one counsel (in addition to any local counsel) for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8 hereof
is for any reason held to be unavailable to or insufficient to hold harmless
the indemnified parties although applicable in accordance with its terms, the
Company and the Agents shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and the Agents, as incurred, in such
proportions that each Agent is responsible for that portion represented by the
percentage that the total commissions and underwriting discounts received by
such Agent to the date of such liability bears to the total sales price
received by the Company from the sale of Notes to the date of such liability,
and the Company is responsible for the balance; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution
27
<PAGE> 28
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls an Agent within the
meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Agent, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company, as the case may be.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) The preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and any
amendments or supplements thereto;
(ii) The preparation, filing and reproduction of this
Agreement;
(iii) The preparation, printing, issuance and delivery of
the Notes, including any fees and expenses relating to the use of
book-entry notes;
(iv) The fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel, and of any
calculation agent or exchange rate agent;
(v) The reasonable fees and disbursements of counsel to
the Agents incurred from time to time in connection with the
transactions contemplated hereby;
(vi) The qualification of the Notes under state securities
laws in accordance with the provisions of Section 4(i) hereof,
including filing fees and the reasonable fees and disbursements of
legal counsel in connection therewith and in connection with the
preparation of any Blue Sky Survey and any Legal Investment Survey;
(vii) The printing and delivery to the Agents in quantities
as hereinabove stated of copies of the Registration Statement and any
amendments thereto, and of the Prospectus and any amendments or
supplements thereto, and the delivery by the Agents of the Prospectus
and any amendments or supplements thereto in connection with
solicitations or confirmations of sales of the Notes;
(viii) The preparation, printing, reproducing and delivery
to the Agents of copies of each Indenture and all supplements and
amendments thereto;
28
<PAGE> 29
(ix) Any fees charged by rating agencies for the rating of
the Notes;
(x) Any advertising and other out-of-pocket expenses of
the Agents incurred with the written approval of the Company;
(xi) The cost of preparing and providing any CUSIP or
other identification numbers for the Notes; and
(xii) The fees and expenses of any Depositary (as defined
in the Indentures) and any nominees thereof in connection with the
Notes.
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of any Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
Terms Agreement) may be terminated for any reason, at any time by either the
Company or an Agent upon the giving of one day's written notice of such
termination to the other party hereto.
(b) Termination of a Terms Agreement. Any Agent may terminate any
Terms Agreement to which such Agent is a party, immediately upon notice to the
Company, at any time prior to the Settlement Date relating thereto (i) if there
has been, since the date of such Terms Agreement or since the respective dates
as of which information is given in the Registration Statement, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company or its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there shall have occurred any material adverse change in
the financial markets in the United States or any outbreak or escalation of
hostilities or other national or international calamity or crisis the effect of
which is such as to make it, in the judgment of such Agent, impracticable to
market the Notes or enforce contracts for the sale of the Notes, or (iii) if
trading in any securities of the Company has been suspended by the SEC or a
national securities exchange, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange shall have been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by
29
<PAGE> 30
either of said exchanges or by order of the SEC or any other governmental
authority, or if a banking moratorium shall have been declared by either
Federal, New York or Puerto Rico authorities, or (iv) if the rating assigned by
any nationally recognized securities rating agency to any debt securities of
the Company as of the date of any applicable Terms Agreement shall have been
lowered since that date or if any such rating agency shall have publicly
announced since the time of the applicable Terms Agreement that it has placed
any debt securities of the Company on what is commonly termed a "watch list"
for possible downgrading.
(c) General. In the event of any such termination, no party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased pursuant to a Terms Agreement with the intention of
reselling them or (b) an offer to purchase any of the Notes has been accepted
by the Company but the time of delivery to the purchaser or his agent of the
Note or Notes relating thereto has not occurred, the covenants set forth in
Sections 4 and 7 hereof shall remain in effect until such Notes are so resold
or delivered, as the case may be, and (iii) the covenant set forth in Section
4(h) hereof, the provisions of Section 5 hereof, the indemnity and contribution
agreements set forth in Sections 8 and 9 hereof, and the provisions of Sections
11, 14 and 16 hereof shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: David H. Chafey,
Executive Vice President
30
<PAGE> 31
If to Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1310
10th Floor
Attention: MTN Product Management
Telephone: (212) 449-7476
Fax: (212) 449-2234
If to CS First Boston Corporation:
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Attention: Short and Medium-Term Note Department
Telephone: (212) 909-3842
Fax: (212) 318-1498
If to First Chicago Capital Markets, Inc.:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Fax: (312) 732-4172
or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State. Any
suit, action or proceeding brought by the Company against one or more Agents in
connection with or arising under this Agreement shall be brought solely in the
state or federal court of appropriate jurisdiction located in the Borough of
Manhattan, The City of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors.
31
<PAGE> 32
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto and their respective successors and the controlling persons and officers
and directors referred to in Sections 8 and 9 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Notes shall be deemed to be a successor by reason merely of
such purchase.
SECTION 16. Consent to Jurisdiction; Appointment of Agent to Accept
Service of Process.
(a) The Company irrevocably consents and agrees, for the benefit
of the holders from time to time of the Notes, the Agents and the other persons
referred to in Section 15 that any legal action, suit or proceeding against it
with respect to its obligations, liabilities or any other matter arising out of
or in connection with the Notes, this Agreement or any Terms Agreement may be
brought in the courts of the State of New York or the courts of the United
States of America located in The City of New York and, until all amounts due
and to become due in respect of all the Notes have been paid, or until any such
legal action, suit or proceeding commenced prior to such payment has been
concluded, hereby irrevocably consent and submit to the non-exclusive
jurisdiction of each such court in personam, generally and unconditionally with
respect to any action, suit or proceeding for themselves and in respect of
their properties, assets and revenues.
(b) The Company hereby irrevocably designates, appoints, and
empowers Orlando Berges, with offices currently at 7 West 51st Street, New
York, New York, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, service of any and all legal process,
summons, notices and documents that may be served in any action, suit or
proceeding brought against the Company in any such United States or State court
with respect to their respective obligations, liabilities or any other matter
arising out of or in connection with this Agreement or any Terms Agreement and
that may be made on such designee, appointee and agent in accordance with legal
procedures prescribed for such courts. If for any reason the Designated Agent
shall cease to be available to act as such, the Company agrees to designate a
new designee, appointee and agent in The City of New York on the terms and for
the purposes of this Section 16 reasonably satisfactory to the Agents. The
Company further hereby irrevocably consents and agrees to the service of any
and all legal process, summons, notices and documents in any such action, suit
or proceeding against it by serving a copy thereof upon the relevant agent for
32
<PAGE> 33
service of process referred to in this Section 16 (whether or not the
appointment of such agent shall for any reason prove to be ineffective or such
agent shall accept or acknowledge such service) or by mailing copies thereof by
the Company at its address specified in or designated pursuant to this
Agreement. The Company agrees that the failure of any such designee, appointee
and agent to give any notice of such service to it shall not impair or affect
in any way the validity of such service or any judgment rendered in any action
or proceeding based thereon. Nothing herein shall in any way be deemed to
limit the ability of the holders of the Notes, the Agents and the other persons
referred to in Section 15 to serve such legal process, summons, notices and
documents in any other manner permitted by applicable law or to obtain
jurisdiction over the Company or bring actions, suits or proceedings against
the Company in such other jurisdictions, and in such manner, as may be
permitted by applicable law. The Company hereby irrevocably and
unconditionally waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of venue of any of the
aforesaid actions, suits or proceedings arising out of or in connection with
this Agreement brought in the United States federal courts located in The City
of New York or the courts of the State of New York located in The City of New
York and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
(c) The provisions of this Section 16 shall survive any
termination of this Agreement, in whole or in part.
33
<PAGE> 34
If the foregoing is in accordance with the Agents' understanding of
our agreement, please sign and return to us a one or more counterparts hereof,
whereupon this instrument along with all counterparts will become a binding
agreement among the Agents and the Company in accordance with its terms.
Very truly yours,
BANPONCE CORPORATION
By:/s/ David H. Chafey, Jr.
------------------------
Name: David H. Chafey, Jr.
Title: Executive Vice President
Accepted:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:/s/ Scott G. Primrose
----------------------------------------
Name: Scott G. Primrose
Title: Authorized Signatory
CS FIRST BOSTON CORPORATION
By:/s/ Martha D. Bailey
----------------------------------------
Name: Martha D. Bailey
Title: Vice President
FIRST CHICAGO CAPITAL MARKETS, INC.
By:/s/ Linda A. Dawson
----------------------------------------
Name: Linda A. Dawson
Title: Managing Director
34
<PAGE> 35
EXHIBIT A
The following terms, if applicable, shall be agreed to by the Company
and any Agent which is a party to a Terms Agreement pursuant to such Terms
Agreement:
Principal Amount: $_______
(or principal amount of foreign currency or currency
unit)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread or Spread Multiplier, if any:
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Dates:
Interest Payment Dates:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Optional Repayment Date(s), if any:
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 7(b)
of the Distribution Agreement.
Legal Opinion pursuant to Section 7(c)of the
Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the
Distribution Agreement.
Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
A-1
<PAGE> 36
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay the Agents, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
<TABLE>
<CAPTION>
PERCENT OF
PRINCIPAL
MATURITY RANGES AMOUNT
- --------------- ----------
<S> <C>
From 9 months but less than 1 year . . . . . . . . . . . . . . . .125%
From 1 year but less than 18 months . . . . . . . . . . . . . . . .150
From 18 months but less than 2 years . . . . . . . . . . . . . . .200
From 2 years but less than 3 years . . . . . . . . . . . . . . . .250
From 3 years but less than 4 years . . . . . . . . . . . . . . . .350
From 4 years but less than 5 years . . . . . . . . . . . . . . . .450
From 5 years but less than 6 years . . . . . . . . . . . . . . . .500
From 6 years but less than 7 years . . . . . . . . . . . . . . . .550
From 7 years but less than 8 years . . . . . . . . . . . . . . . .600
From 8 years but less than 9 years . . . . . . . . . . . . . . . .600
From 9 years but less than 10 years . . . . . . . . . . . . . . . .600
From 10 years but less than 15 years . . . . . . . . . . . . . . .625
From 15 years but less than 20 years . . . . . . . . . . . . . . .700
From 20 years to 30 years . . . . . . . . . . . . . . . . . . . . .750
</TABLE>
<PAGE> 1
EXHIBIT (1)(c)
AMENDMENT NO. 2 TO DISTRIBUTION AGREEMENT
October 6, 1995
WHEREAS, the parties hereto have previously entered into a
Distribution Agreement, dated October 11, 1991, as amended by Amendment No. 1
thereto dated December 2, 1993 and as supplemented on June 16, 1993 and August
1, 1994 (the "Distribution Agreement"), among BanPonce Financial Corp. (the
"Company"), BanPonce Corporation (the "Guarantor") and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, CS First Boston Corporation and First Chicago
Capital Markets, Inc. (each, an "Agent and collectively, the "Agents")
relating to the issue and sale by the Company of its Medium-Term Notes; and
WHEREAS, the Company, the Guarantor and each of the Agents wish to
amend the Distribution Agreement (i) to amend the definition of a "Significant
Subsidiary" contained in Section 2(a)(ii) thereof to include subsidiaries that
may be incorporated as banks, (ii) to except from the requirements of Sections
7(b), 7(c) and 7(d) thereof sales by the Guarantor or its subsidiaries of
preferred stock and (iii) to amend the requirements of Section 7(c) thereof to
provide for the delivery of the legal opinions required thereby by Puerto Rico
counsel to the Company and the Guarantor;
NOW, THEREFORE, the Company, the Guarantor and each of the Agents
hereby agree to amend said Distribution Agreement as follows:
1. Section 2(a)(ii) of the Distribution Agreement is hereby amended
to read as follows:
(ii) Subsidiaries. Each subsidiary of the Guarantor or
the Company which is a significant subsidiary as defined in Rule 405
of Regulation C of the 1933 Act Regulations (each, a "Significant
Subsidiary") has been duly incorporated and is validly existing as a
corporation or a bank in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify and be in good
standing would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
<PAGE> 2
prospects of the Guarantor and its subsidiaries considered as one
enterprise; and all of the issued and outstanding capital stock of
each such Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable (subject to the provisions of
Section 55 of Title 12 of the United States Code in the case of
Significant Subsidiaries which are national banking associations) and,
except as otherwise disclosed in the Prospectus and except for
directors' qualifying shares, is owned by the Company or the
Guarantor, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity or, if such is not the case, that any such security interest,
mortgage pledge, lien, encumbrance, claim or equity, when exercised,
enforced or otherwise asserted, will not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Guarantor and its
subsidiaries considered as one enterprise.
2. Sections 7(b), 7(c) and 7(d) of the Distribution Agreement are
hereby amended to read as follows:
(b) Subsequent Delivery of Certificates. Each time that
the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing
solely for a change in the interest rates of Notes or similar changes
and other than by an amendment or supplement which relates exclusively
to an offering of debt securities other than the Notes or an offering
of preferred stock of the Guarantor or its subsidiaries) or there is
filed with the SEC any document incorporated by reference into the
Prospectus (other than (i) any Current Report on Form 8-K relating
exclusively to the issuance of debt securities or preferred stock
under the Registration Statement or (ii) a document filed pursuant to
Section 14 of the 1934 Act unless requested by the Agents) or (if
required pursuant to the terms of a Terms Agreement) the Company sells
Notes to an Agent pursuant to a Terms Agreement, the Company shall
furnish or cause to be furnished to the Agents (or, in the case of a
sale of Notes to an Agent pursuant to a Terms Agreement, to such
Agent) forthwith certificates dated the date of filing with the SEC of
such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form
satisfactory to the Agents or such Agent, as the case may be, to the
effect that the statements contained in the certificates referred to
in Section 5(b) hereof which were last furnished to the Agents are
true and correct at the time of such amendment, supplement, filing or
sale, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to
2
<PAGE> 3
the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificates,
certificates of the same tenor as the certificates referred to in said
Section 5(b), modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time
of delivery of such certificates.
(c) Subsequent Delivery of Legal Opinions. Each time
that the Registration Statement or the Prospectus shall be amended or
supplemented (other than by an amendment or supplement providing
solely for a change in the interest rates of the Notes or similar
changes or solely for the inclusion of additional financial
information, and, unless the Agents shall otherwise specify, other
than by an amendment or supplement which relates exclusively to an
offering of debt securities other than the Notes or an offering of
preferred stock of the Guarantor or its subsidiaries) or there is
filed with the SEC any document incorporated by reference into the
Prospectus (other than (i) any Current Report on Form 8-K or (ii) a
document filed pursuant to Section 14 of the 1934 Act, in each case,
unless the Agents shall otherwise reasonably request), or (if required
pursuant to the terms of a Terms Agreement) the Company sells Notes to
an Agent pursuant to a Terms Agreement, the Company shall furnish or
cause to be furnished forthwith to the Agents (or, in the case of a
sale of Notes to an Agent pursuant to a Terms Agreement, to such
Agent), with a copy to counsel to the Agents, a written opinion or
opinions of Puerto Rico Counsel to the Company and the Guarantor
satisfactory to the Agents or such Agent, as the case may be, dated
the date of filing with the SEC of such supplement or document, the
date of effectiveness of such amendment, or the date of such sale, as
the case may be, in form and substance satisfactory to the Agents or
such Agent, as the case may be, of the same tenor as the opinion
referred to in Section 5(a)(2) hereof, but modified, as necessary, to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion; or, in lieu of
such opinion or opinions, counsel last furnishing such opinion to the
Agents or such Agent, as the case may be, shall furnish the Agents or
such Agent, as the case may be, with a letter to the effect that the
Agents or such Agent, as the case may be, may rely on such last
opinion to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in such last
opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of delivery of
such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time
that the Registration Statement or the Prospectus shall be
3
<PAGE> 4
amended or supplemented to include additional financial information or
there is filed with the SEC any document incorporated by reference
into the Prospectus which contains additional financial information
(other than a Current Report on Form 8-K filed solely for the purpose
of incorporating a press release relating to the Guarantor's interim
or annual financial statements or results of operations or filed in
connection with the issuance of preferred stock by the Guarantor or
its subsidiaries pursuant to the Registration Statement) or (if
required pursuant to the terms of a Terms Agreement) the Company sells
Notes to an Agent pursuant to a Terms Agreement, the Guarantor shall
cause Price Waterhouse LLP forthwith to furnish the Agents (or, in the
case of a sale of Notes to an Agent pursuant to a Terms Agreement, to
such Agent) with a letter, dated the date of effectiveness of such
amendment, supplement or document with the SEC, or the date of such
sale, as the case may be, in form satisfactory to the Agents or such
Agent, as the case may be, of the same tenor as the portions of the
letter referred to in Section 5(c) hereof but modified to relate to
the Registration Statement and Prospectus, as amended and supplemented
to the date of such letter; provided, however, that if the
Registration Statement or the Prospectus is amended or supplemented
solely to include financial information as of and for a fiscal
quarter, Price Waterhouse LLP may limit the scope of such letter to
the unaudited financial statements included in such amendment or
supplement unless any other information included therein of an
accounting, financial or statistical nature is of such a nature that,
in the reasonable judgment of the Agents or such Agent, as the case
may be, such letter should cover such other information.
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.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have cause this Amendment No. 2
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By: /s/ David H. Chafey, Jr.
-------------------------------
Name: David H. Chafey, Jr.
Title: President
BANPONCE CORPORATION
By: /s/ David H. Chafey, Jr.
-------------------------------
Name: David H. Chafey, Jr.
Title: Executive Vice President
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Scott G. Primrose
-------------------------------
Name: Scott G. Primrose
Title: Authorized Signatory
CS FIRST BOSTON CORPORATION
By: /s/ Martha D. Bailey
-------------------------------
Name: Martha D. Bailey
Title: Vice President
FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ Linda A. Dawson
-------------------------------
Name: Linda A. Dawson
Title: Managing Director
5
<PAGE> 1
EXHIBIT (4)(l)
[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.
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Security
issued upon registration of transfer of, or in exchange for, or in lieu of,
this Note is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of DTC (and any payment hereon is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
REGISTERED NO. FXR- CUSIP NO.
BANPONCE CORPORATION
MEDIUM-TERM FIXED RATE NOTE, SERIES 2
Due Nine Months or More From Date of Issue
Payment of Principal, Premium, if any, and Interest
<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 OID DEFAULT AMOUNT:
PERCENTAGE: (Only applicable if Note
issued at original issue
discount)
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
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>
BANPONCE CORPORATION, a corporation duly organized and
existing under the laws of the Commonwealth of Puerto Rico (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
-2-
<PAGE> 3
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 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 Day 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
-3-
<PAGE> 4
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.
-4-
<PAGE> 5
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 CORPORATION 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:
BANPONCE CORPORATION
By:________________________
By:________________________
Attest:_____________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of a designated series of Debt Securities described
in the Indenture referred to on the reverse hereof
The First National Bank
of Chicago, as Trustee,
By:_____________________
Authorized Signatory
-5-
<PAGE> 6
BANPONCE CORPORATION
MEDIUM-TERM FIXED RATE NOTE, SERIES 2
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"), issued or to be issued under and pursuant to an
indenture dated as of February 15, 1995 (hereinafter called the "Indenture"),
duly executed and delivered by the Company to The First National Bank of
Chicago, 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 designated as the Medium-Term Notes, Series 2 (the
"Notes") of the Company and is limited in aggregate initial offering price of
up to $1,000,000,000, less the aggregate initial offering price of "Securities"
(as defined in the Prospectus, dated September 27, 1995, relating to debt
securities and preferred stock of the Company, Popular International Bank, Inc.
and BanPonce Financial Corp.) authenticated and delivered upon original
issuance, other than the Notes. 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.
-6-
<PAGE> 7
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 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 Company 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
to the date fixed for redemption.
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%.
-7-
<PAGE> 8
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 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 The First National Bank of Chicago,
Attention: Securities Processing Division, 14 Wall Street, Eighth Floor, New
York, New York 10005 (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
-8-
<PAGE> 9
(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 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.
-9-
<PAGE> 10
The Company, 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 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 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.
-10-
<PAGE> 11
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):
________________
-11-
<PAGE> 12
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.
-12-
<PAGE> 13
___________
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:
<TABLE>
<S> <C> <C>
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 Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common ___________________________________________
(State)
</TABLE>
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 CORPORATION 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.
-13-
<PAGE> 1
EXHIBIT (4)(m)
[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.
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
or its agent for registration of transfer, exchange, or payment, and any
Security issued upon registration of transfer of, or in exchange for, or in
lieu of, this Note is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of DTC (and any payment hereon is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
REGISTERED NO. FLR- CUSIP NO.
BANPONCE CORPORATION
MEDIUM-TERM FLOATING RATE NOTE, SERIES 2
Due Nine Months or More From Date of Issue
Payment of Principal, Premium, if any, and Interest
<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:
</TABLE>
<PAGE> 2
INTEREST PAYMENT DATES:
MINIMUM INTEREST RATE:
INTEREST CALCULATION DATES:
(If other than ten calendar CALCULATION AGENT:
days after the Interest
Determination Date)
OTHER PROVISIONS:
BANPONCE CORPORATION, a corporation duly organized and
existing under the laws of the Commonwealth of Puerto Rico (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,
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<PAGE> 3
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 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
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<PAGE> 4
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).
"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.
-4-
<PAGE> 5
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 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 calendar 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.
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<PAGE> 6
IN WITNESS WHEREOF, BANPONCE CORPORATION 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:
BANPONCE CORPORATION
By:________________________
By:________________________
Attest:_____________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of a designated series of Debt Securities described
in the Indenture referred to on the reverse hereof
The First National Bank
of Chicago, as Trustee
By:_______________________
Authorized Signatory
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<PAGE> 7
BANPONCE CORPORATION
MEDIUM-TERM FLOATING RATE NOTE, SERIES 2
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"), issued or to be issued under and pursuant to an indenture
dated as of February 15, 1995 (hereinafter called the "Indenture"), duly
executed and delivered by the Company to The First National Bank of Chicago 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 designated as the Medium-Term Notes, Series 2 (the
"Notes") of the Company and is limited in aggregate initial offering price of
up to $1,000,000,000, less the aggregate initial offering price of "Securities"
(as defined in the Prospectus, dated September 27, 1995, relating to debt
securities and preferred stock of the Company, Popular International Bank, Inc.
and BanPonce Financial Corp.) authenticated and delivered upon original
issuance, other than the Notes. 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
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<PAGE> 8
provisions of law and except as specified herein, on each 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 Note shall be the third Wednesday
of March, June, September and December of each year. If the Interest Rate
Reset
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<PAGE> 9
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 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
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<PAGE> 10
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, 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
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<PAGE> 11
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 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
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<PAGE> 12
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 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 second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for
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<PAGE> 13
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 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
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<PAGE> 14
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 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
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<PAGE> 15
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 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
-15-
<PAGE> 16
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 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
-16-
<PAGE> 17
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 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
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<PAGE> 18
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.
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
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<PAGE> 19
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 rights of the Holders of the Debt Securities
of each series to be affected under the Indenture at any time by the Company
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 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 Company 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 to the date
fixed for redemption.
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
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<PAGE> 20
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 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
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<PAGE> 21
to which such deliveries are to be made is The First National Bank of Chicago,
Attention: Securities Processing Division, 14 Wall Street, Eighth Floor, New
York, New York 10005 (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.
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 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
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<PAGE> 22
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 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.
-22-
<PAGE> 23
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> 24
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> 25
____________________
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:
<TABLE>
<S> <C>
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 Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common _________________________________________
(State)
</TABLE>
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 CORPORATION 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.
-25-
<PAGE> 1
EXHIBIT (4)(n)
[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.
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
or its agent for registration of transfer, exchange, or payment, and any Note
issued upon registration of transfer of, or in exchange for, or in lieu of,
this Note is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of DTC (and any payment hereon is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
REGISTERED NO. FXR- CUSIP NO.
BANPONCE FINANCIAL CORP.
MEDIUM-TERM FIXED RATE NOTE, SERIES C
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
PERCENTAGE: OID DEFAULT AMOUNT:
(Only applicable if Note
issued at original issue
discount)
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
ANNUAL REDEMPTION DEFAULT RATE:
INTEREST PAYMENT DATES: 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>
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 businesson a
Special Record Date for the payment
-2-
<PAGE> 3
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 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 Day 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.
-3-
<PAGE> 4
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:
BANPONCE FINANCIAL CORP.
By:________________________
Attest:___________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of a designated series of Debt Securities
described in the Indenture referred to on the reverse hereof.
THE FIRST NATIONAL BANK
OF CHICAGO,
as Trustee
By:_________________________
Authorized Signatory
-4-
<PAGE> 5
BANPONCE FINANCIAL CORP.
MEDIUM-TERM FIXED RATE NOTE, SERIES C
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, as supplemented by the
First Supplemental Indenture, dated as of February 28, 1995 (together,
hereinafter called the "Indenture"), duly executed and delivered by the Company
and the Guarantor to The First National Bank of Chicago, as Trustee
(hereinafter called the "Trustee") and as Successor Trustee to Citibank, N.A.,
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 designated as the Medium-Term Notes, Series C
(the "Notes") of the Company and is limited in aggregate initial offering price
of up to $1,000,000,000, less the aggregate initial offering price of
"Securities" (as defined in the Prospectus, dated September 27, 1995, relating
to debt securities and preferred stock of the Company, Popular International
Bank, Inc. and BanPonce Financial Corp.) authenticated and delivered upon
original issuance, other than the Notes. 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
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<PAGE> 6
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 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
to the date fixed for redemption.
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
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<PAGE> 7
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 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 The First National Bank of Chicago,
Attention: Securities Processing Division, 14 Wall Street, Eighth Floor, New
York, New York 10005 (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
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<PAGE> 8
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 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
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<PAGE> 9
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 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.
-9-
<PAGE> 10
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 otherwise, upon making any payment
hereunder (i) to be
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<PAGE> 11
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: ________________________
By: ________________________
Attested: ________________________
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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
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<PAGE> 13
specification, one such Note will be issued for the portion not being repaid):
________________
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:
<TABLE>
<S> <C> <C>
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 Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common ___________________________________________
(State)
</TABLE>
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)(o)
[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.
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
or its agent for registration of transfer, exchange, or payment, and any Note
issued upon registration of transfer of, or in exchange for, or in lieu of,
this Note is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of DTC (and any payment hereon is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
REGISTERED NO. FLR- CUSIP NO.
BANPONCE FINANCIAL CORP.
MEDIUM-TERM FLOATING RATE NOTE, SERIES C
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:
</TABLE>
<PAGE> 2
INTEREST PAYMENT DATES:
MINIMUM INTEREST RATE:
INTEREST CALCULATION DATES:
(If other than ten calendar CALCULATION AGENT:
days after the Interest
Determination Date)
OTHER PROVISIONS:
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,
-2-
<PAGE> 3
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 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
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<PAGE> 4
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). "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.
-4-
<PAGE> 5
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 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 calendar 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.
-5-
<PAGE> 6
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:
BANPONCE FINANCIAL CORP.
By:________________________
Attest:___________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of a designated series of Debt Securities
described in the Indenture referred to on the reverse hereof.
THE FIRST NATIONAL BANK
OF CHICAGO,
as Trustee
By:____________________
Authorized Signatory
-6-
<PAGE> 7
BANPONCE FINANCIAL CORP.
MEDIUM-TERM FLOATING RATE NOTE, SERIES C
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, as supplemented by the
First Supplemental Indenture, dated as of February 28, 1995 (together,
hereinafter called the "Indenture"), duly executed and delivered by the Company
and the Guarantor to The First National Bank of Chicago, as Trustee
(hereinafter called the "Trustee") and as Successor Trustee to Citibank, N.A.,
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 designated as the Medium-Term Notes, Series C
(the "Notes") of the Company and is limited in aggregate initial offering price
of up to $1,000,000,000, less the aggregate initial offering price of
"Securities" (as defined in the Prospectus, dated September 27, 1995, relating
to debt securities and preferred stock of the Company, Popular International
Bank, Inc. and BanPonce Financial Corp.) authenticated and delivered upon
original issuance, other than the Notes. 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
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<PAGE> 8
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 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 this 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
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<PAGE> 9
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 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 certifi-
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<PAGE> 10
cates 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
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
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<PAGE> 11
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, 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,
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<PAGE> 12
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 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
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<PAGE> 13
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 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 second 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
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<PAGE> 14
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 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
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<PAGE> 15
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 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
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<PAGE> 16
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 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
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<PAGE> 17
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 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
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<PAGE> 18
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 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.
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<PAGE> 19
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.
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
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<PAGE> 20
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.
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 to the date
fixed for redemption.
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
-20-
<PAGE> 21
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 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 The
First National Bank of Chicago, Attention: Securities Processing Division, 14
Wall Street, Eighth Floor, New York, New York 10005 (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
-21-
<PAGE> 22
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.
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.
-22-
<PAGE> 23
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,
-23-
<PAGE> 24
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: ________________________
By: ________________________
Attested: ________________________
-24-
<PAGE> 25
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
-25-
<PAGE> 26
specification, one such Note will be issued for the portion not being repaid):
_______________
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.
-26-
<PAGE> 27
____________________
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:
<TABLE>
<S> <C>
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 Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common _________________________________________
(State)
</TABLE>
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.
-27-
<PAGE> 1
EXHIBIT (5)(c)
BANPONCE CORPORATION
PO BOX 362708
SAN JUAN, PUERTO RICO 00936-2708
October 6, 1995
BanPonce Corporation,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Ladies and Gentlemen:
In connection with the registration under the Securities Act
of 1933, as amended (the "Act"), of up to $1,000,000,000 aggregate amount, or
the equivalent thereof in other currencies or currency units, less an amount
equal to the aggregate proceeds from the sale of securities other than the
Securities (as defined below) registered under the Act under the Registration
Statement on Form S-3 (No. 33-61601), of Medium-Term Notes, Series 2 (such
series of securities being hereinafter referred to as the "Series" and any
securities to be issued from time to time as part of such Series being
hereinafter referred to individually as a "Security" and collectively as the
"Securities") of BanPonce Corporation, a Puerto Rico corporation (the
"Company"), to be issued pursuant to the Indenture, dated as of February
<PAGE> 2
BanPonce Corporation -2-
15, 1995 (the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"), I, as Counsel to the Company, have
examined such corporate records, certificates and other documents, and such
questions of law, as I have considered necessary or appropriate for the
purposes of this opinion.
Upon the basis of such examination, I advise you that, in my
opinion:
(1) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
Commonwealth of Puerto Rico.
(2) The Series has been duly authorized and established
in conformity with the Indenture, and, when the terms of a particular
Security and of its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity with the
Indenture, and such Security has been duly prepared, executed,
authenticated and issued in accordance with the Indenture and issued
and sold as contemplated in the Registration Statement and the
Prospectus, dated September 27, 1995 (the "Prospectus"), as
supplemented by the Prospectus Supplement, dated October 6, 1995
(the "Prospectus Supplement"), such Security will constitute a valid
and legally binding obligation of
<PAGE> 3
BanPonce Corporation -3-
the Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
In connection with my opinion, I have assumed that at the time
of the issuance, sale and delivery of each particular Security the
authorization of the Series will not have been modified or rescinded and, with
respect to each Security, that such Security will conform to the draft forms of
the Securities examined by us. I have also assumed that at the time of the
issuance, sale and delivery of each particular Security there will not have
occurred any change in law affecting the validity, legally binding character or
enforceability of such Security and that the issuance, sale and delivery of
such Security, all of the terms of such Security and the performance by the
Company of its obligations under such Security will comply with applicable law
and with each requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company and will not result in a default
under or a breach of any agreement or instrument then binding upon the Company.
<PAGE> 4
BanPonce Corporation -4-
I note that, as of the date of this opinion, a judgment for
money in an action based on a Security denominated in a foreign currency or
currency unit in a Federal or state court in the United States ordinarily would
be enforced in the United States only in United States dollars. The date used
to determine the rate of conversion of the foreign currency or currency unit in
which a particular Security is denominated into United States dollars will
depend upon various factors, including which court renders the judgment. In
the case of a Security denominated in a foreign currency, a state court in the
State of New York rendering a judgment on such Security would be required under
Section 27 of the New York Judiciary Law to render such judgment in the foreign
currency in which the Security is denominated, and such judgment would be
converted into United States dollars at the exchange rate prevailing on the
date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the
United States, the laws of the Commonwealth of Puerto Rico and the laws of the
State of New York, and I am expressing no opinion as to the effect of the laws
of any other jurisdiction. With respect to all matters of New York law, I have
relied upon the opinion, dated October 6, 1995, of Sullivan & Cromwell, and
my opinion is subject to the
<PAGE> 5
BanPonce Corporation -5-
same assumptions, qualifications and limitations with respect to such matters
as are contained in such opinion of Sullivan & Cromwell.
Also, I have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by us to be responsible, and I have assumed that the Indenture has
been duly authorized, executed and delivered by the Trustee thereunder, an
assumption which I have not independently verified.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement (No. 33-61601) and to the references to me under
the heading "Validity of Offered Securities" in the Prospectus and the heading
"Validity of the Notes" in the Prospectus Supplement. In giving such consent, I
do not thereby admit that I am in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
/s/ Brunilda Santos de Alvarez
-----------------------------
Brunilda Santos de Alvarez
<PAGE> 1
EXHIBIT (5)(d)
BANPONCE FINANCIAL CORP.
c/o CT Corporation
1209 Orange Street
Wilmington, Delaware 19801
October 6, 1995
BanPonce Corporation,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
BanPonce Financial Corp.,
521 Fellowship Road,
Mt. Laurel, New Jersey 08054.
Ladies and Gentlemen:
In connection with the registration under the Securities Act
of 1933, as amended (the "Act"), of up to $1,000,000,000 aggregate amount, or
the equivalent thereof in other currencies or currency units, less an amount
equal to the aggregate proceeds from the sale of securities other than the
Securities (as defined below) registered under the Act under the Registration
Statement on Form S-3 (No. 33-61601), of Medium-Term Notes, Series 2 (such
series of securities being hereinafter referred to as the "Series" and any
securities to be issued from time to time as part of such Series being
hereinafter referred to individually as a "Security" and collectively as the
"Securities") of BanPonce
<PAGE> 2
BanPonce Corporation -2-
BanPonce Financial Corp.
Financial Corp., a Delaware corporation (the "Company"), endorsed with
guarantees (the "Guarantees") of BanPonce Corporation, a Puerto Rico
corporation (the "Guarantor"), to be issued pursuant to the Indenture, dated as
of October 1, 1991, as supplemented by the First Supplemental Indenture, dated
as of February 28, 1995 (together, the "Indenture"), among the Company, the
Guarantor and The First National Bank of Chicago (the "Trustee"), as successor
trustee to Citibank, N.A., I, as Counsel to the Guarantor, have examined such
corporate records, certificates and other documents, and such questions of law,
as I have considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, I advise you that, in my
opinion:
(1) The Guarantor has been duly incorporated and is an
existing corporation in good standing under the laws of the
Commonwealth of Puerto Rico.
(2) The Series has been duly authorized and established
in conformity with the Indenture and, when the terms of a particular
Security and of its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity with the
Indenture, and such Security has been duly prepared,
<PAGE> 3
BanPonce Corporation -3-
BanPonce Financial Corp.
executed, authenticated and issued in accordance with the Indenture
and issued and sold as contemplated in the Registration Statement and
the Prospectus, dated September 27, 1995 (the "Prospectus"), as
supplemented by the Prospectus Supplement thereto, dated October 6,
1995 (the "Prospectus Supplement"), such Security will constitute a
valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
(3) The issuance of the Guarantees has been duly
authorized, the Guarantees have been established in conformity with
the Indenture and, when the terms of a particular Security and of its
issuance and sale have been duly authorized and established by all
necessary corporate action in conformity with the Indenture, and such
Security has been duly prepared, executed, authenticated and issued in
accordance with the Indenture and issued and sold as contemplated in
the Registration Statement, the Prospectus and the Prospectus
Supplement, and the Guarantee endorsed on
<PAGE> 4
BanPonce Corporation -4-
BanPonce Financial Corp.
such Security has been duly executed in accordance with the Indenture,
such Guarantee will constitute a valid and legally binding obligation
of the Guarantor enforceable in accordance with its terms, subject to
bankruptcy, insolvency,fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
In connection with my opinion, I have assumed that at the time
of the issuance, sale and delivery of each particular Security the
authorization of the Series and the Guarantees endorsed on the Securities will
not have been modified or rescinded and, with respect to each Security and the
Guarantee endorsed thereon, that such Security and such Guarantee will conform
to the draft forms of the Securities and Guarantees examined by me. I have
also assumed that at the time of the issuance, sale and delivery of each
particular Security there will not have occurred any change in law affecting
the validity, legally binding character or enforceability of such Security and
the Guarantee endorsed thereon and that the issuance, sale and delivery of such
Security, all of the terms of such Security and the performance by the Company
of its obligations under such
<PAGE> 5
BanPonce Corporation -5-
BanPonce Financial Corp.
Security and by the Guarantor of its obligations under such Guarantee will
comply with applicable law and with each requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company or the
Guarantor and will not result in a default under or a breach of any agreement
or instrument then binding upon the Company or the Guarantor.
I note that, as of the date of this opinion, a judgment for
money in an action based on a Security denominated in a foreign currency or
currency unit, or on related Guarantees, in a Federal or state court in the
United States ordinarily would be enforced in the United States only in United
States dollars. The date used to determine the rate of conversion of the
foreign currency or currency unit in which a particular Security is denominated
into United States dollars will depend upon various factors, including which
court renders the judgment. In the case of a Security denominated in a foreign
currency, a state court in the State of New York rendering a judgment on such
Security, or on a related Guarantee, would be required under Section 27 of the
New York Judiciary Law to render such judgment in the foreign currency in which
the Security is denominated, and such judgment would be converted into
<PAGE> 6
BanPonce Corporation -6-
BanPonce Financial Corp.
United States dollars at the exchange rate prevailing on the date of entry of
the judgment.
The foregoing opinion is limited to the Federal laws of the
United States, the laws of the Commonwealth of Puerto Rico, the laws of the
State of New York and the General Corporation Law of the State of Delaware, and
I am expressing no opinion as to the effect of the laws of any other
jurisdiction. With respect to all matters of New York law and the General
Corporation Law of the State of Delaware, I have relied upon the opinion, dated
October 6, 1995, of Sullivan & Cromwell, and my opinion is subject to the same
assumptions, qualifications and limitations with respect to such matters as are
contained in such opinion of Sullivan & Cromwell.
Also, I have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by me to be responsible, and I have assumed that the Indenture has
been duly authorized, executed and delivered by the Trustee thereunder, an
assumption which I have not independently verified.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement (No. 33-61601) and
<PAGE> 7
BanPonce Corporation -7-
BanPonce Financial Corp.
to the references to me under the heading "Validity of Offered Securities" in
the Prospectus and the heading "Validity of the Notes and Guarantees" in the
Prospectus Supplement. In giving such consent, I do not thereby admit that I
am in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
/s/ Brunilda Santos de Alvarez
------------------------------
Brunilda Santos de Alvarez
<PAGE> 1
EXHIBIT (5)(e)
SULLIVAN CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
October 6, 1995
BanPonce Corporation,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Ladies and Gentlemen:
In connection with the registration under the Securities Act
of 1933, as amended (the "Act"), of up to $1,000,000,000 aggregate amount, or
the equivalent thereof in other currencies or currency units, less an amount
equal to the aggregate proceeds from the sale of securities other than the
Securities (as defined below) registered under the Act under the Registration
Statement on Form S-3 (No. 33-61601), of Medium-Term Notes, Series 2 (such
series of securities being hereinafter referred to as the "Series" and any
securities to be issued from time to time as part of such Series being
hereinafter referred to individually as a "Security" and collectively as the
"Securities") of BanPonce Corporation, a Puerto Rico corporation (the
"Company"), to be issued pursuant to the Indenture, dated as of February
<PAGE> 2
BanPonce Corporation -2-
15, 1995 (the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee"), we, as your counsel, have examined such
corporate records, certificates and other documents, and such questions of law,
as we have considered necessary or appropriate for the purposes of this
opinion.
Upon the basis of such examination, we advise you that, in our
opinion, the Series has been duly authorized and established in conformity with
the Indenture, and, when the terms of a particular Security and of its issuance
and sale have been duly authorized and established by all necessary corporate
action in conformity with the Indenture, and such Security has been duly
prepared, executed, authenticated and issued in accordance with the Indenture
and issued and sold as contemplated in the Registration Statement and the
Prospectus, dated September 27, 1995 (the "Prospectus"), as supplemented by the
Prospectus Supplement thereto, dated October 6, 1995 (the "Prospectus
Supplement"), such Security will constitute a valid and legally binding
obligation of the Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or
<PAGE> 3
BanPonce Corporation -3-
affecting creditors' rights and to general equity principles.
In connection with our opinion, we have assumed that at the
time of the issuance, sale and delivery of each particular Security the
authorization of the Series will not have been modified or rescinded and, with
respect to each Security, that such Security will conform to the draft forms of
the Securities examined by us. We have also assumed that at the time of the
issuance, sale and delivery of each particular Security there will not have
occurred any change in law affecting the validity, legally binding character or
enforceability of such Security and that the issuance, sale and delivery of
such Security, all of the terms of such Security and the performance by the
Company of its obligations under such Security will comply with applicable law
and with each requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company and will not result in a default
under or a breach of any agreement or instrument then binding upon the Company.
We note that, as of the date of this opinion, a judgment for
money in an action based on a Security denominated in a foreign currency or
currency unit in a Federal or state court in the United States ordinarily would
<PAGE> 4
BanPonce Corporation -4-
be enforced in the United States only in United States dollars. The date used
to determine the rate of conversion of the foreign currency or currency unit in
which a particular Security is denominated into United States dollars will
depend upon various factors, including which court renders the judgment. In
the case of a Security denominated in a foreign currency, a state court in the
State of New York rendering a judgment on such Security would be required under
Section 27 of the New York Judiciary Law to render such judgment in the foreign
currency in which the Security is denominated, and such judgment would be
converted into United States dollars at the exchange rate prevailing on the
date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the
United States, the laws of the Commonwealth of Puerto Rico and the laws of the
State of New York, and we are expressing no opinion as to the effect of the
laws of any other jurisdiction. With respect to all matters of Puerto Rico
law, we have relied upon the opinion, dated October 6, 1995, of Brunilda
Santos de Alvarez, Esq., Puerto Rico counsel to the Company, and our opinion is
subject to the same assumptions, qualifications and limitations with respect to
such matters as are contained in such opinion of Brunilda Santos de Alvarez,
Esq.
<PAGE> 5
BanPonce Corporation -5-
Also, we have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by us to be responsible, and we have assumed that the Indenture has
been duly authorized, executed and delivered by the Trustee thereunder, an
assumption which we have not independently verified.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement (No. 33-61601) and to the references to us under
the heading "Validity of Offered Securities" in the Prospectus and the heading
"Validity of the Notes" in the Prospectus Supplement. In giving such consent,
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 (5)(f)
SULLIVAN CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
October 6, 1995
BanPonce Corporation,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
BanPonce Financial Corp.,
521 Fellowship Road,
Mt. Laurel, New Jersey 08054.
Ladies and Gentlemen:
In connection with the registration under the Securities Act
of 1933, as amended (the "Act"), of up to $1,000,000,000 aggregate amount, or
the equivalent thereof in other currencies or currency units, less an amount
equal to the aggregate proceeds from the sale of securities other than the
Securities (as defined below) registered under the Act under the Registration
Statement on Form S-3 (No. 33-61601), of Medium-Term Notes, Series 2 (such
series of securities being hereinafter referred to as the "Series" and any
securities to be issued from time to time as part of such Series being
hereinafter referred to individually as a "Security" and collectively as the
"Securities") of BanPonce
<PAGE> 2
BanPonce Corporation -2-
BanPonce Financial Corp.
Financial Corp., a Delaware corporation (the "Company"), endorsed with
guarantees (the "Guarantees") of BanPonce Corporation, a Puerto Rico
corporation (the "Guarantor"), to be issued pursuant to the Indenture, dated as
of October 1, 1991, as supplemented by the First Supplemental Indenture, dated
as of February 28, 1995 (together, the "Indenture"), among the Company, the
Guarantor and The First National Bank of Chicago (the "Trustee"), as successor
trustee to Citibank, N.A., we, as your counsel, have examined such corporate
records, certificates and other documents, and such questions of law, as we
have considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion:
(1) The Series has been duly authorized and established in
conformity with the Indenture and, when the terms of a particular
Security and of its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity with the
Indenture, and such Security has been duly prepared, executed,
authenticated and issued in accordance with the Indenture and issued
and sold as contemplated in the Registration Statement and the
Prospectus, dated
<PAGE> 3
BanPonce Corporation -3-
BanPonce Financial Corp.
September 27, 1995 (the "Prospectus"), as supplemented by the
Prospectus Supplement thereto, dated October 6, 1995 (the "Prospectus
Supplement"), such Security will constitute a valid and legally
binding obligation of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(2) The issuance of the Guarantees has been duly authorized,
the Guarantees have been established in conformity with the Indenture
and, when the terms of a particular Security and of its issuance and
sale have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, and such Security
has been duly prepared, executed, authenticated and issued in
accordance with the Indenture and issued and sold as contemplated in
the Registration Statement, the Prospectus and the Prospectus
Supplement, and the Guarantee endorsed on such Security has been duly
executed in accordance with the Indenture, such Guarantee will
constitute a valid and legally binding obligation of the Guarantor
<PAGE> 4
BanPonce Corporation -4-
BanPonce Financial Corp.
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
In connection with our opinion, we have assumed that at the time of
the issuance, sale and delivery of each particular Security the authorization of
the Series and the Guarantees endorsed on the Securities will not have been
modified or rescinded and, with respect to each Security and the Guarantee
endorsed thereon, that such Security and such Guarantee will conform to the
draft forms of the Securities and Guarantees examined by us. We have also
assumed that at the time of the issuance, sale and delivery of each particular
Security there will not have occurred any change in law affecting the validity,
legally binding character or enforceability of such Security and the Guarantee
endorsed thereon and that the issuance, sale and delivery of such Security, all
of the terms of such Security and the performance by the Company of its
obligations under such Security and by the Guarantor of its obligations under
such Guarantee will comply with applicable law and with each requirement or
restriction imposed by any court or
<PAGE> 5
BanPonce Corporation -5-
BanPonce Financial Corp.
governmental body having jurisdiction over the Company or the Guarantor and
will not result in a default under or a breach of any agreement or instrument
then binding upon the Company or the Guarantor.
We note that, as of the date of this opinion, a judgment for
money in an action based on a Security denominated in a foreign currency or
currency unit, or on related Guarantees, in a Federal or state court in the
United States ordinarily would be enforced in the United States only in United
States dollars. The date used to determine the rate of conversion of the
foreign currency or currency unit in which a particular Security is denominated
into United States dollars will depend upon various factors, including which
court renders the judgment. In the case of a Security denominated in a foreign
currency, a state court in the State of New York rendering a judgment on such
Security, or on a related Guarantee, would be required under Section 27 of the
New York Judiciary Law to render such judgment in the foreign currency in which
the Security is denominated, and such judgment would be converted into United
States dollars at the exchange rate prevailing on the date of entry of the
judgment.
<PAGE> 6
BanPonce Corporation -6-
BanPonce Financial Corp.
The foregoing opinion is limited to the Federal laws of the
United States, the laws of the Commonwealth of Puerto Rico, the laws of the
State of New York and the General Corporation Law of the State of Delaware, and
we are expressing no opinion as to the effect of the laws of any other
jurisdiction. With respect to all matters of Puerto Rico law, we have relied
upon the opinion, dated October 6, 1995, of Brunilda Santos de Alvarez, Esq.,
Puerto Rico counsel to the Guarantor and the Company, and our opinion is
subject to the same assumptions, qualifications and limitations with respect to
such matters as are contained in such opinion of Brunilda Santos de Alvarez,
Esq.
Also, we have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by us to be responsible, and we have assumed that the Indenture has
been duly authorized, executed and delivered by the Trustee thereunder, an
assumption which we have not independently verified.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement (No. 33-61601) and to the references to us under
the heading
<PAGE> 7
BanPonce Corporation -7-
BanPonce Financial Corp.
"Validity of Offered Securities" in the Prospectus and the heading "Validity of
the Notes and Guarantees" in the Prospectus Supplement. In giving such
consent, 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 (8)(A)
SULLIVAN & CROMWELL
125 BROAD ST.
NEW YORK, NEW YORK 10004
October 6, 1995
BanPonce Corporation,
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918.
Dear Sirs:
We have acted as your counsel in connection with the registration under
the Securities Act of 1933 (the "Act") of up to $1,000,000,000 aggregate initial
offering price, or the equivalent thereof in other currencies or currency
units, of Medium Term Notes, Series 2 (the "Notes") of 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 filed under
the Act on October 6, 1995.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an exhibit to Registration Statement No. 33-61601
and the reference to us in the above-mentioned Prospectus Supplement under the
heading "United States Taxation". In giving such consent, we do not thereby
admit that we are in the category
<PAGE> 2
BanPonce Corporation -2-
of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ SULLIVAN & CROMWELL
<PAGE> 1
EXHIBIT (8)(B)
SULLIVAN & CROMWELL
125 BROAD ST.
NEW YORK, NEW YORK 10004
October 6, 1995
BanPonce Corporation,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918,
BanPonce Financial Corp.,
521 Fellowship Road,
Mt. Laurel, New Jersey 08054.
Dear Sirs:
We have acted as your counsel in connection with the registration under
the Securities Act of 1933 (the "Act") of up to $1,000,000,000 aggregate
initial offering price, or the equivalent thereof in other currencies or
currency units, of Medium Term Notes, Series C (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 October 6, 1995.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an
<PAGE> 2
BanPonce Corporation
BanPonce Financial Corp. -2-
exhibit to Registration Statement No. 33-61601 and the reference to us in the
above-mentioned Prospectus Supplement under the heading "United States
Taxation". In giving such consent, 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 (8)(C)
MCCONNELL VALDES
PO BOX 364225, SAN JUAN, PUERTO RICO 00936-4225
TELEPHONE (809) 759-9292 - FAX (809) 759-9225
October 6, 1995
BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Dear Sirs:
We have acted as your counsel in connection with the registration under
the Securities Act of 1933 (the "Act") of up to $1,000,000,000 aggregate
initial offering price, or the equivalent thereof in other currencies or
currency units, of Medium-Term Notes, Series 2 (the "Notes") of BanPonce
Corporation, and hereby confirm to you our opinion as set forth under the
heading "Certain Puerto Rico Tax Considerations" in the Prospectus Supplement
relating to the Notes filed under the Act on October 6, 1995.
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
"Certain Puerto Rico Tax Considerations". In giving such consent, 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,
McConnell Valdes
<PAGE> 1
EXHIBIT (10)(a)
BANPONCE CORPORATION
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(DATED AS OF OCTOBER 6, 1995)
Medium-Term Notes (collectively, the "Notes") in the aggregate
principal amount of up to $1,000,000,000 are to be offered on a continuous
basis by BanPonce Corporation (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 between
the Company and the Agents, dated October 6, 1995 (the "Distribution
Agreement"). The Notes will be issued pursuant to the Indenture (the
"Indenture"), dated as of February 15, 1995, between the Company and The First
National Bank of Chicago, as trustee (the "Trustee"). A Registration Statement
(the "Registration Statement", which term shall include any additional
registration statements filed in connection with the Notes as provided in the
Distribution Agreement) with respect to the Notes has been filed with the
Securities and Exchange Commission (the "Commission"). The most recent base
Prospectus included in the Registration Statement, as supplemented with respect
to the Notes, is herein referred to as the "Prospectus." The most recent
supplement to the Prospectus with respect to the specific terms of the Notes is
herein referred to as the "Pricing Supplement."
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered to
the appropriate Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated
form (each, a "Certificated Note") delivered to the purchaser thereof or a
person designated by such purchaser. Owners of beneficial interests in
Book-Entry Notes will be entitled to physical delivery of Certificated Notes
equal in principal amount to their respective beneficial interests only upon
certain limited circumstances described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in Part III hereof.
Capitalized terms
<PAGE> 2
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
<TABLE>
<S> <C>
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 to as "Multi-Currency Notes."
Notes that have the amount of principal payments determined
by reference to an index currency are
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
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.
Calculation of Interest: In the case of Fixed Rate Notes, interest (including
payments for
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
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 Stated Maturity, or date of earlier
redemption or repayment. For special provisions
relating to
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
Multi-Currency Notes and Indexed Notes, see the
related Multi-Currency and Indexed Note Prospectus
Supplement.
Acceptance and
Rejection of Offers: The Company shall have the sole right to accept offers to
purchase Notes from the Company and may reject any such
offer in whole or in part. Each Agent shall communicate to
the Company, orally or in writing, each reasonable offer to
purchase Notes from the Company received by it. Each Agent
shall have the right, in its discretion reasonably
exercised, without notice to the Company, to reject any
offer to purchase Notes through it in whole or in part.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the Company,
the Company, with the approval of the Agent which presented
the order (the "Presenting Agent"), will prepare a Pricing
Supplement reflecting the terms of such Note and file the
Pricing Supplement relating to the Notes with the
Commission in accordance with Rule 424 under the Act.
Information to be included in the Pricing Supplement shall
include:
1. the name of the Company;
2. the title of the securities, including
series designation, if any;
3. the date of the Pricing Supplement and the
date of the Prospectus Supplement to which the Pricing
Supplement relates;
4. the Price to Public (but only if (a) the
trade is being made on an agency basis and (b) such
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
Price to Public is other than 100%);
5. Net Proceeds to the Company (but
only if (a) the trade is being made on a principal
basis and (b) the Net Proceeds to the Company is
other than 100%), less what would have been the
applicable agency commission;
6. the information with respect to the
terms of the Notes set forth below (whether or not
the applicable Note is a Book-Entry Note) under
"Procedures for Notes Issued in Book-Entry Form --
Settlement Procedures", items 2, 3, 7, 8 and 9; and
7. any other terms of the Notes not
otherwise specified in the Prospectus or Prospectus
Supplement.
One copy of such filed document will be sent by
telecopy or 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:
If by overnight, express or special delivery:
Merrill Lynch & Co., Tritech Services, 40 Colonial
Drive, Piscataway, New Jersey 08854, Attention:
Prospectus Operations/Susan Putnam,
If by all other types of deliveries: Tritech
Services, #4 Corporate Place, Corporate Park 287,
Piscataway, New Jersey 08854, Attention: Prospectus
Operations/Nachman Kimerling
Telephone: (908) 885-2769
Telecopy: (908) 885-2774/2775/2776
</TABLE>
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<PAGE> 7
<TABLE>
<S> <C>
To CS First Boston:
CS First Boston Corporation, Five World Trade
Center, New York, New York 10048, Attention: Joan
Bryan, Transaction Advisory Group
Telephone: (212) 322-5105
Telecopy: (212) 803-4096
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0237
Chicago, Illinois 60670
Attention: MTN Operations Manager
Telephone: (317) 732-9631
The Presenting Agent will cause a stickered
supplemented Prospectus with the trade confirmation
to be delivered to the purchaser of the Note.
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C>
For record keeping purposes, one copy of each
Pricing Supplement shall also be mailed or
telecopied to each Agent and the Trustee at the
following respective addresses:
To Merrill Lynch:
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, World Financial Center, North
Tower, 10th Floor, New York, New York 10281-1310,
Attention: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To CS First Boston:
CS First Boston Corporation, 55 East 52nd Street,
New York, New York 10055, Attention: Short and
Medium-Term Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Fax: (312) 732-4172
To the Trustee:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust
Administration
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
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.
</TABLE>
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<PAGE> 9
<TABLE>
<S> <C>
Settlement: The receipt of immediately available funds by the Company
in payment for a Note and the authentication and delivery
of such Note shall, with respect to such Note, constitute
"settlement." Offers accepted by the Company will be
settled at a time as the purchaser and the Company shall
agree and pursuant to the timetable for settlement set
forth in Parts II and III hereof under "Settlement
Procedures" with respect to Book-Entry Notes and
Certificated Notes, respectively (each such date fixed for
settlement, a "Settlement Date"). If procedures A and B of
the applicable Settlement Procedures with respect to a
particular offer are not completed on or before the time
set forth under the applicable "Settlement Procedures
Timetable", such offer shall not be settled until the
Business Day following the completion of Settlement
Procedures A and B or such later date as the purchaser and
the Company shall agree.
In the event of a purchase of Notes by 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
</TABLE>
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<PAGE> 10
<TABLE>
<S> <C>
variable terms. At such time as the Company advises
the Agents of the new interest rates or other
variable terms, the Agents may resume solicitation
of offers to purchase such Notes. Until such time,
only "indications of interest" may be recorded.
Immediately after acceptance by the Company of an
offer to purchase at a new interest rate or new
variable term, the Company, the Agents and the
Trustee shall follow the procedures set forth under
the applicable "Settlement Procedures."
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend solicitation
of purchases at any time. Upon receipt of such
instructions, the Agents will forthwith suspend
solicitation of offers to purchase from the Company until
such time as the Company has advised them that solicitation
of offers to purchase may be resumed. If the Company
decides to amend the Registration Statement (including
incorporating any documents by reference therein) or
supplement any of such documents (other than to change
rates or other variable terms), it will promptly advise the
Agents and, except in the case of an amendment by the
filing of a document incorporated by reference in the
Registration Statement, will furnish each Agent and its
counsel with copies of the proposed amendment or
supplement. One copy of such filed document, along with a
copy of the cover letter sent to the Commission, will be
delivered or mailed to the Agents at the following
addresses:
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C>
To Merrill Lynch:
Product Management MTNs, Merrill Lynch Money
Markets, North Tower, World Financial Center, 10th
Floor, New York, New York 10281-1310
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To CS First Boston:
CS First Boston Corporation, 55
East 52nd Street, New York, New York 10055,
Attention: Short and Medium-Term Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Telecopy: (312) 732-4172
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
(other than to change interest rates or other
variable terms) there shall be any offers to
purchase Notes that have been accepted by the
Company which have not been settled, the Company
will promptly advise the Agents and the Trustee
whether such offers may be settled and whether
copies of the Prospectus as theretofore amended
and/or supplemented as in effect at the time of the
suspension may be delivered in connection with the
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 Prospec-
</TABLE>
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<PAGE> 12
<TABLE>
<S> <C>
tus and Pricing Supplement must accompany or precede
the earlier of (a) the written confirmation of a
sale sent to a customer or his agent and (b) the
delivery of Notes to a customer or his agent.
Authenticity of The Agents will have no obligation or liability to the
Signatures: Company or the Trustee in respect of the authenticity of
the signature of any officer, employee or agent of the
Company or the Trustee on any Note or related Guarantee.
Documents Incorporated
by Reference: The Company shall supply each Agent with an adequate supply
of all documents incorporated by reference in the
Registration Statement.
Business Day: "Business Day" means any day other than a Saturday, Sunday,
or other day on which banks in The City of New York (and,
with respect to LIBOR Notes, the City of London) are
authorized or obligated by law or executive order to close.
For the definition of "Business Day" with respect to Multi-
Currency Notes or Indexed Notes, see the Prospectus
Supplement.
</TABLE>
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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 October __, 1995,
and a Medium-Term Note Certificate Agreement between the Trustee and DTC, dated
May 26, 1989 (the "Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
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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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agent. Each Book-Entry Note will bear interest from a
date (the "Interest Accrual Date") which will be (a) with
respect to an original Book-Entry Note (or any portion
thereof), its Original Issue Date and (b) with respect
to any Book-Entry Note (or portion thereof) issued
subsequently upon exchange or transfer of a Book-Entry
Note or in lieu of a destroyed, lost or stolen
Book-Entry Note, the most recent Interest Payment Date (or,
in the case of Floating Rate Notes with interest rates
which reset daily or weekly, the day following the most
recent Record Date to which interest has been paid or duly
provided for on the predecessor Book-Entry Note or Notes
(or if no such payment or provision has been made, the
Original Issue Date of the predecessor Book-Entry Note or
Notes), regardless of the date of authentication of such
subsequently issued Book-Entry Note. No Book-Entry Note
shall represent any Certificated Note.
Identification: The Agents have arranged with the CUSIP Service Bureau (the
"CUSIP Service Bureau") of Standard & Poor's Corporation
("Standard & Poor's") for the reservation of approximately
900 CUSIP numbers for each rank of Notes which have been
reserved for future assignment to Book-Entry Notes
representing Notes issued in book-entry form and have
delivered to the Company, the Trustee and DTC an initial
written list of such CUSIP numbers. The Trustee will
assign CUSIP numbers to Book-Entry Notes as described below
under Settlement Procedure B. DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the
Trustee has assigned to Book-Entry Notes. The Trustee will
notify the Company at
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any time when fewer than 100 of the respective reserved
CUSIP numbers remain unassigned to Book-Entry Notes, and,
if it deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Book-Entry Notes
representing Notes issued in book-entry form. Upon
obtaining such additional CUSIP numbers, the Company will
deliver a list of such additional numbers to the Trustee
and DTC. Book-Entry Notes having an aggregate principal
amount in excess of $200,000,000 and otherwise required to
be represented by the same Global Certificate will instead
be represented by two or more Global Certificates which
shall be assigned the same CUSIP number.
Registration: Each Book-Entry Note will be registered in the name of CEDE
& CO., as nominee for DTC, on the register maintained by
the Trustee under the Indenture. The beneficial owner of a
Book-Entry Note (i.e., an owner of a beneficial interest in
a Book-Entry Note), or one or more indirect participants in
DTC designated by such owner, will designate one or more
participants in DTC (with respect to such Book-Entry Note,
the "Participants") to act as agent for such beneficial
owner in connection with the book-entry system maintained
by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such Participants,
a credit balance with respect to such Book-Entry Note in
the account of such Participants. The ownership interest
of such beneficial owner in such Book-Entry Note will be
recorded through the records of such Participants or
through the separate records of such Participants and one
or more indirect participants in DTC.
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Transfers: Transfers of beneficial interests in a Book-Entry Note will
be accomplished by book entries made by DTC and, in turn,
by Participants (and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial
transferors and transferees of such Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service Bureau
at any time a written notice specifying (a) the CUSIP
numbers of two or more Book-Entry Notes Outstanding on such
date that represent Book-Entry Notes having the same Fixed
Rate Terms or Floating Rate Terms, as the case may be,
other than Original Issue Dates, and for which interest has
been paid to the same date; (b) a date, occurring at least
30 days after such written notice is delivered and at least
30 days before the next Interest Payment Date for the
related Book-Entry Notes, on which such Book-Entry Notes
shall be exchanged for a single replacement Book-Entry
Note; and (c) a new CUSIP number to be assigned to such
replacement Book-Entry Note. Upon receipt of such a
notice, DTC will send to its Participants (including the
Trustee) a written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to the
CUSIP Service Bureau written notice setting forth such
exchange date and the new CUSIP number and stating that, as
of such exchange date, the CUSIP numbers of the Book-Entry
Notes to be exchanged will no longer be valid. On the
specified exchange date, the Trustee will exchange such
Book-Entry Notes for a single Book-Entry Note bearing the
new CUSIP number and the CUSIP numbers of the
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exchanged Book-Entry Notes will, in accordance with CUSIP
Service Bureau procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the Book-
Entry Notes to be exchanged exceed $200,000,000 in
aggregate principal amount, one replacement Book-Entry Note
will be authenticated and issued to represent each
$200,000,000 of principal amount of the exchanged Book-
Entry Notes and an additional Book-Entry Note will be
authenticated and issued to represent any remaining
principal amount of such Book-Entry Notes (see
"Denominations" below).
Denominations: All Book-Entry Notes will be denominated in U.S. dollars
and will be issued in denominations of $1,000 and integral
multiples thereof. Book-Entry Notes will be denominated in
principal amounts not in excess of $200,000,000. If one or
more Book-Entry Notes having an aggregate principal amount
in excess of $200,000,000 would, but for the preceding
sentence, be represented by a single Book-Entry Note, then
one Book-Entry Note will be issued to represent each
$200,000,000 principal amount of such Note or Notes issued
in book-entry form and an additional Book-Entry Note will
be issued to represent any remaining principal amount of
such Note or Notes issued in book-entry form. In such a
case, each of the Book-Entry Notes shall be assigned the
same CUSIP number.
Interest: General. Interest on each Note issued in book-entry form
will accrue from the Interest Accrual Date of the Book-
Entry Note representing such Note. Each payment of
interest on a Book-Entry Note will include interest accrued
through the day preceding, as the case may
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be, the Interest Payment Date (provided that in the case of
Floating Rate Notes with interest rates which reset daily or
weekly interest payments will include interest accrued to and
including the Regular Record Date immediately preceding the
Interest Payment Date), the Stated Maturity Date,
Redemption Date or Repayment Date. Interest payable at
Maturity of a Book-Entry Note will be payable to the Person
to whom the principal of such Note is payable. DTC will
arrange for each pending deposit message described under
Settlement Procedure C below to be transmitted to Standard
& Poor's Corporation ("S&P"), which will use the
information in the message to include certain terms of the
related Book-Entry Note in the appropriate daily bond
report published by S&P.
Interest Payment Dates. Interest payments will be made on
each Interest Payment Date commencing with the first
Interest Payment Date following the Original Issue Date;
provided, however, the first payment of interest on any
Book-Entry Note originally issued between a Regular Record
Date and an Interest Payment Date will occur on the
Interest Payment Date following the next Regular Record
Date.
Fixed Rate Notes. Interest payments on Fixed Rate Book-
Entry Notes will be made semiannually on June 15 and December
15 on each year and at Maturity.
Floating Rate Notes. Except as provided in Part I under
"Calculation of Interest", the Interest Payment Date for a
Floating Rate Note will be, in the case of Floating Rate
Notes which reset
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daily, weekly or monthly, on the third Wednesday of each month
or on the third Wednesday of March, June, September and
December of each year as specified in the applicable Pricing
Supplement; in the case of Floating Rate Notes which reset
quarterly, on the third Wednesday of March, June, September
and December of each year; in the case of Floating Rate Notes
which reset semiannually, on the third Wednesday of the two
months of each year specified in the applicable Pricing
Supplement; or, in the case of Eleventh District Cost of Funds
Rate Notes, on the first Business Day of each month or the
first Business Day of each March, June, September or December
as specified in the applicable Pricing Supplement and in the
case of Floating Rate Notes which reset annually, on the third
Wednesday of the month specified in the applicable Pricing
Supplement; and, in each case, at Maturity. For additional
special provisions relating to Floating Rate Notes, see the
Prospectus Supplement.
Regular Record Dates. The Regular Record Date with respect
to any Interest Payment Date for a Fixed Rate Note shall be
the May 31 or November 30 preceding such Interest Payment
Date. The Regular Record Date with respect to any Interest
Payment Date for any Floating Rate Note shall be the date
15 calendar days (whether or not a Business Day) preceding
such Interest Payment Date.
Notice of Interest Payments and Regular Record Dates. On
the first Business Day of January, April, July and October
of each year, the Trustee will deliver to the Company and
DTC a written list of Regular Record Dates and Interest
Payment
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Dates that will occur during the six-month period
beginning on such first Business Day with respect to
Floating Rate Book-Entry Notes. Promptly after each
Interest Determination Date for Floating Rate Book-Entry
Notes, the Company will notify S&P of the interest rates
determined on such Interest Determination Date.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each Regular
Record Date, the Trustee will deliver to the Company and
DTC a written notice specifying by CUSIP number the amount
of interest to be paid on each Book-Entry Note issued under
the Indenture on the following Interest Payment Date (other
than an Interest Payment Date coinciding with Maturity) and
the total of such amounts. DTC will confirm the amount
payable on each Book-Entry Note on such Interest Payment
Date by reference to the daily bond reports published by
Standard & Poor's. On such Interest Payment Date, the
Company will pay to the Trustee, and the Trustee in turn
will pay to DTC, such total amount of interest due (other
than at Maturity), at the times and in the manner set forth
below under "Manner of Payment."
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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Maturity of such Book-Entry Note. At such maturity, the
Company will pay to the Trustee, and the Trustee in turn
will pay to DTC, the principal amount of such Note,
together with interest and premium, if any, due at such
Maturity, at the times and in the manner set forth below
under "Manner of Payment." Promptly after payment to DTC
of the principal, interest and premium, if any, due at the
Maturity of such Book-Entry Note, the Trustee will cancel
and destroy such Book-Entry Note and deliver to the Company
a certificate of destruction therefor.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Book-Entry Notes on
any Interest Payment Date or at Maturity shall be paid by
the Company to the Trustee in funds available for use as of
9:30 a.m., New York City time, on such date. The Company
will make such payment on such Book-Entry Notes by
instructing the Trustee to withdraw funds from an account
maintained by the Company with the Trustee. The Company
will confirm such instructions in writing to the Trustee.
Prior to 10:00 a.m., New York City time, on such date or as
soon as possible thereafter, the Trustee will pay by
separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate use by
DTC, each payment of principal (together with interest and
premium, if any) due on a Book-Entry Note on such date.
Thereafter on such payment date, DTC will pay, in
accordance with its SDFS operating procedures then in
effect, such amounts in funds
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available for immediate use to the respective Participants in
whose names such Notes are recorded in the book-entry system
maintained by DTC. Neither the Company nor the Trustee shall
have any responsibility or liability for the payment by DTC of
the principal of, or interest on, the Book-Entry Notes to such
Participants.
Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on
a Note will be determined and withheld by the Participant,
indirect participant in DTC or other Person responsible for
forwarding payments and materials directly to the
beneficial owner of such Note.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note
sold by the Agents, as agents of the Company, will be as
follows:
A. The Presenting Agent will advise the Company by
telephone of the following Settlement information:
1. Taxpayer identification number of the
purchaser.
2. Principal amount of the Note.
3. Fixed Rate Notes:
(a) interest rate
Floating Rate Notes:
(a) interest rate basis;
(b) initial interest rate;
(c) spread and/or spread multiplier,
if any;
(d) initial interest reset dates;
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(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest rate, if any;
(j) minimum interest rate, if any;
(k) alternate rate event spread; and
(l) interest rate reset dates.
5. Price to public of the Note.
6. Trade date.
7. Settlement Date (Original Issue Date).
8. Stated Maturity.
9. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption Percentage
(c) Annual Redemption Percentage
Reduction
10. Optional Repayment Date(s), if any.
11. Net proceeds to the Company.
12. Presenting Agent's commission.
B. The Company will advise the Trustee by telecopy or
other method acceptable to the Trustee of the
above settlement information received with respect
to each Note from the
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Presenting Agent and shall confirm to the Trustee
that the principal amount of Notes, including such
Note, issued as of the relevant Settlement Date shall
not exceed the limit with respect to the principal
amount of Notes specified in the most recent Company
Order delivered to the Trustee pursuant to Section 303
of the Indenture.
C. The Trustee will assign a CUSIP Number to the
Book-Entry Note and will telephone and advise the
Company and the Presenting Agent of such CUSIP
Number. The Trustee will communicate to DTC and
the Presenting Agent through DTC's Participant
Terminal System a pending deposit message
specifying the following settlement information:
1. The information set forth in Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of
the Trustee and the Presenting Agent.
3. Identification as a Fixed Rate Book-Entry
Note or Floating Rate Book-Entry Note.
4. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related record date for DTC
purposes (or, in the case of Floating Rate
Notes which reset daily or weekly, the
date five calendar days preceding the
Interest Payment
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Date) and, if then calculable, the amount of
interest payment on such Interest Payment
Date (which amount shall have been confirmed
by the Trustee).
5. CUSIP number of the Book-Entry Note
representing such Note.
6. Whether such Book-Entry Note represents
any other Notes issued or to be issued in
book-entry form.
D. The Company will deliver to the Trustee a Book-
Entry Note representing such Note in a form that
has been approved by the Company, the Agents and
the Trustee.
E. The Trustee will complete and authenticate the
Book-Entry Note.
F. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such Note
to the participant account of the Presenting Agent
maintained by DTC and (ii) to debit the settlement
account of the Presenting Agent and credit the
settlement account of the Trustee maintained by
DTC, in an amount equal to the price of such Note
less the Presenting Agent's commission. Any entry
of such a deliver order shall
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be deemed to constitute a representation and warranty
by the Trustee to DTC that (i) the Book-Entry Note has
been issued and authenticated and (ii) the Trustee
is holding such Book-Entry Note pursuant to the
Certificate Agreement between the Trustee and DTC.
H. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Presenting Agent's participant account and credit
such Note to the participant account of the
Participants maintained by DTC and (ii) to debit
the settlement accounts of such Participants and
credit the settlement account of the Presenting
Agent maintained by DTC, in an amount equal to the
initial public offering price of such Note.
I. Transfers of funds in accordance with SDFS
delivery orders described in Settlement Procedures
G and H will be settled in accordance with SDFS
operating procedures in effect on the Settlement
Date.
J. The Trustee will credit to an account of the
Company maintained by the Trustee funds available
for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure G.
K. The Trustee will send a copy of the Book-Entry
Note to the Company together with a statement
setting forth the principal amount of Notes
Outstanding as of the related
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Settlement Date after giving effect to such
transaction and all other offers to purchase Notes of
which the Company has advised the Trustee but which
have not been settled.
L. The Presenting Agent will confirm the purchase of
such Note to the purchaser either by transmitting
to the Participant with respect to such Note a
confirmation order through DTC's Participant
Terminal System or by mailing a written
confirmation to such purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the Company,
Settlement Procedures "A" through "L" set forth above shall
be completed as soon as possible but not later than the
respective times (New York City time) set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade date
B 12:00 noon on the trade date
C 2:00 p.m. on the trade date
D 3:00 p.m. on the Business
Day before Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H No later than 2:00 p.m. on
Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date]
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If a sale is to be settled more than one Business Day after
the trade date, Settlement Procedures A, B, and C may, if
necessary, be completed at any time prior to the specified
times on the first Business Day after such trade date. In
connection with a sale which is to be settled more than one
Business Day after the trade date, if the initial interest
rate for a Floating Rate Note is not known at the time that
Settlement Procedure A is completed, Settlement Procedures
B and C shall be completed as soon as such rates have been
determined, but no later than 11:00 a.m. and 2:00 p.m., New
York City time, respectively, on the second Business Day
before the Settlement Date. Settlement Procedure I is
subject to extension in accordance with any extension of
Fedwire closing deadlines and in the other events specified
in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Company shall notify the Trustee and the
Trustee will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such effect by
no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled Settlement
Date.
Failure to Settle: If the Trustee has not entered an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement
Procedure G, then upon written request (which may be
evidenced by facsimile transmission) of the Company the
Trustee shall deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a withdrawal
message instructing DTC to debit
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such Note to the participant account of the Trustee
maintained at DTC. DTC will process the withdrawal message,
provided that such participant account contains a
principal amount of the Book-Entry Note representing such Note
that is at least equal to the principal amount to be debited.
If withdrawal messages are processed with respect to all the
Notes represented by a Book-Entry Note, the Trustee will mark
such Book-Entry Note "cancelled", make appropriate entries
in its records and send such cancelled Book-Entry Note to
the Company. The CUSIP number assigned to such Book-Entry
Note shall, in accordance with CUSIP Service Bureau
procedures, be cancelled and not immediately reassigned.
If withdrawal messages are processed with respect to a
portion of the Notes represented by a Book-Entry Note, the
Trustee will exchange such Book-Entry Note for two Book-
Entry Notes, one of which shall represent the Book-Entry
Notes for which withdrawal messages are processed and shall
be cancelled immediately after issuance, and the other of
which shall represent the other Notes previously
represented by the surrendered Book-Entry Note and shall
bear the CUSIP number of the surrendered Book-Entry Note.
If the purchase price for any Book-Entry Note is not timely
paid to the Participants with respect to such Note by the
beneficial purchaser thereof (or a person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Presenting
Agent may enter SDFS deliver orders through DTC's
Participant Terminal System reversing Settlement Procedures
G and H, respectively. Thereafter,
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the Trustee will deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such
failure shall have occurred for any reason other than default by
the Presenting Agent to perform its obligations hereunder
or under the Distribution Agreement, the Company will
reimburse the Presenting Agent on an equitable basis for
its loss of the use of funds during the period when the
funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any actions
in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect
to a Note that was to have been represented by a Book-Entry
Note also representing other Notes, the Trustee will
provide, in accordance with Settlement Procedures D and E,
for the authentication and issuance of a Book-Entry Note
representing such remaining Notes and will make appropriate
entries in its records.
</TABLE>
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
<TABLE>
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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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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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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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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.
</TABLE>
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<PAGE> 34
<TABLE>
<S> <C>
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;
</TABLE>
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<TABLE>
<S> <C> <C>
(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.
</TABLE>
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<PAGE> 36
<TABLE>
<S> <C> <C>
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 photocopy
thereof to the
</TABLE>
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<PAGE> 37
<TABLE>
<S> <C> <C>
applicable Presenting Agent at the following addresses:
Merrill Lynch & Co., Money Market Clearance,
55 Water Street, 3rd Floor, N.S.C.C. Window, New
York, New York 10041, Attention: Al Mitchell
Telephone: (212) 558-2405
Telecopy: (212) 558-2457
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 acknowledgment of
receipt.
Upon determination that the Certificated Note,
including the related Guarantee, has been
authorized, delivered and completed as
aforementioned, the Presenting Agent will wire the
net proceeds of the Certificated Note after
deduction of its applicable commission to the
Company pursuant to standard wire instructions
given by the Company.
E. The Presenting Agent will deliver the Certificated
Note, the related Guarantee endorsed
</TABLE>
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<TABLE>
<S> <C>
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
</TABLE>
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<TABLE>
<S> <C>
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.
</TABLE>
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<PAGE> 1
EXHIBIT (10)(b)
BANPONCE FINANCIAL CORP.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(Dated as of October 6, 1995)
Medium-Term Notes (collectively, the "Notes") in the aggregate
principal amount of up to $1,000,000,000 are to be offered on a continuous
basis by 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 and supplemented (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, as supplemented by the First Supplemental Indenture dated as
of February 28, 1995 among the Company, the Guarantor and The First National
Bank of Chicago, as trustee (the "Trustee"), and as Successor Trustee to
Citibank, N.A. A Registration Statement (the "Registration Statement", which
term shall include any additional registration statements filed in connection
with the Notes and related Guarantees as provided in the Distribution Agreement)
with respect to the Notes and related Guarantees has been filed with the
Securities and Exchange Commission (the "Commission"). The most recent base
Prospectus included in the Registration Statement, as supplemented with respect
to the Notes and related Guarantees, is herein referred to as the "Prospectus."
The most recent supplement to the Prospectus with respect to the specific terms
of the Notes is herein referred to as the "Pricing Supplement."
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-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
<PAGE> 2
respective beneficial interests only upon certain limited circumstances
described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in Part III hereof.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
<TABLE>
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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
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
denominated in one or more currencies or currency units other
than in U.S. dollars are herein referred to as
"Multi-Currency Notes." Notes that have the amount of
principal payments determined by reference to an index
currency are herein referred to as "Indexed Notes."
Denominations: The Notes will be issued in denominations of $1,000 and
integral multiples thereof. Any Notes denominated other
than in U.S. dollars will be issuable in denominations as
set forth in the relevant Multi-Currency and Indexed Note
Prospectus Supplement. For special provisions relating to
Multi-Currency Notes and Indexed Notes, see the related
Multi-Currency and Indexed Note Supplement.
Registration: Notes will be issued only in fully registered form.
Redemption/Repayment: The Notes will be subject to repayment at the option of the
Holders thereof in accordance with the terms of the Notes
on their respective Optional Repayment Dates, if any.
Optional Repayment Dates, if any, will be fixed at the time
of sale and set forth in the applicable Pricing Supplement
and in the applicable Note. If no Optional Repayment Dates
are indicated with respect to a Note, such Note will not be
repayable at the option of the Holder prior to Maturity.
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
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
Dates are indicated with respect to a Note, such
Note will not be redeemable prior to Maturity.
Calculation of
Interest: In the case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and paid
on the basis of a 360-day year of twelve 30-day months. In
the case of Floating Rate Notes, interest will be calcu-
lated 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
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
shall be made on the next succeeding Business Day and no
interest shall accrue on such payment for the period from
and after such Stated Maturity, or date of earlier redemption
or repayment. For special provisions relating to Multi-
Currency Notes and Indexed Notes, see the related Multi-
Currency and Indexed Note Prospectus Supplement.
Acceptance and
Rejection of Offers: The Company shall have the sole right to accept offers to
purchase Notes from the Company and may reject any such
offer in whole or in part. Each Agent shall communicate to
the Company, orally or in writing, each reasonable offer to
purchase Notes from the Company received by it. Each Agent
shall have the right, in its discretion reasonably
exercised, without notice to the Company, to reject any
offer to purchase Notes through it in whole or in part.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the Company,
the Company, with the approval of the Agent which presented
the order (the "Presenting Agent"), will prepare a Pricing
Supplement reflecting the terms of such Note and file the
Pricing Supplement relating to the Notes with the
Commission in accordance with Rule 424 under the Act.
Information to be included in the Pricing Supplement shall
include:
1. the name of the Company and the Guarantor;
2. the title of the securities, including
series designation, if any;
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
3. the date of the Pricing Supplement and the
date of the Prospectus Supplement to which the Pricing
Supplement relates;
4. the Price to Public (but only if (a) the
trade is being made on an agency basis and (b) such Price
to Public is other than 100%);
5. Net Proceeds to the Company (but only if
(a) the trade is being made on a principal basis and (b)
the Net Proceeds to the Company is other than 100%), less
what would have been the applicable agency commission;
6. the information with respect to the terms
of the Notes set forth below (whether or not the applicable
Note is a Book-Entry Note) under "Procedures for Notes
Issued in Book-Entry Form -- Settlement Procedures", items
2, 3, 7, 8 and 9; and
7. any other terms of the Notes not otherwise
specified in the Prospectus or Prospectus Supplement.
One copy of such filed document will be sent by telecopy or
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:
If by overnight, express or special delivery:
Merrill Lynch & Co., Tritech Services, 40 Colonial Drive,
Piscataway, New Jersey 08854, Attention: Prospectus
Operations/Susan Putnam
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S> <C>
If by all other types of deliveries:
Tritech Services, #4 Corporate Place, Corporate Park 287,
Piscataway, New Jersey 08854, Attention: Prospectus
Operations/Nachman Kimerling, Final Prospectus Unit
Telephone: (908) 885-2769
Telecopy: (908) 885-2774/2775/2776
To CS First Boston:
CS First Boston Corporation, Five World Trade Center, New
York, New York 10055, Attention: Joan Bryan
Telephone: (212) 322-5105
Telecopy: (212) 803-4096
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0237
Chicago, Illinois 60670
Attention: MTN Operations Manager
Telephone: (317) 732-9631
The Presenting Agent will cause a stickered supplemented
Prospectus with the trade confirmation to be delivered to
the purchaser of the Note.
For record keeping purposes, one copy of each Pricing
Supplement shall also be mailed or telecopied to each Agent
and the Trustee at the following respective addresses:
To Merrill Lynch:
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, World Financial Center, North Tower, 10th
Floor, New York, New York 10281-1310, Attention: MTN
Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234;
To CS First Boston:
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C>
CS First Boston Corporation, 55 East 52nd Street, New York,
New York 10055, Attention: Short and Medium-Term Finance
Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Fax: (312) 732-4172
To the Trustee:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust
Administration
In each instance that a Pricing Supplement is prepared, the
Presenting Agent will affix the 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
</TABLE>
-8-
<PAGE> 9
<TABLE>
<S> <C>
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 Settle-
ment Procedures A and B or such later date as the purchaser
and the Company shall agree.
In the event of a purchase of Notes by the Presenting Agent
as principal, appropriate settlement details will be set
forth in the applicable Terms Agreement to be entered into
between the Presenting Agent and the Company pursuant to
the Distribution Agreement.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change the interest
rate or any other variable term on any Notes being offered
by the Company, the Company will promptly advise the Agents
and the Agents will forthwith suspend solicitation of
offers to purchase such Notes. Each Agent will telephone
the Company with recommendations as to the changed interest
rates or other variable terms. At such time as the Company
advises the Agents of the new interest rates or other
variable terms, the Agents may resume solicitation of
offers to purchase such Notes. Until such time, only
"indications of interest" may be recorded. Immediately
after acceptance by the Company of an offer to purchase at
a new interest rate or new variable term, the Company, the
Agents and the Trustee shall follow the procedures set
forth under the applicable "Settlement Procedures."
</TABLE>
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<PAGE> 10
<TABLE>
<S> <C>
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend solicitation
of purchases at any time. Upon receipt of such
instructions, the Agents will forthwith suspend
solicitation of offers to purchase from the Company until
such time as the Company has advised them that solicitation
of offers to purchase may be resumed. If the Company and
the Guarantor decide to amend the Registration Statement
(including incorporating any documents by reference
therein) or supplement any of such documents (other than to
change rates or other variable terms), they will promptly
advise the Agents and, except in the case of an amendment
by the filing of a document incorporated by reference in
the Registration Statement, will furnish each Agent and its
counsel with copies of the proposed amendment or
supplement. One copy of such filed document, along with a
copy of the cover letter sent to the Commission, will be
delivered or mailed to the Agents at the following
addresses:
To Merrill Lynch:
Product Management MTNs, Merrill
Lynch Money Markets, North Tower,
World Financial Center, 10th Floor,
New York, New York 10281-1310
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To CS First Boston:
CS First Boston Corporation,
55 East 52nd Street, New York,
New York 10055, Attention:
Short and Medium-Term
Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C>
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Fax: (312) 732-4172
In the event that at the time the solicitation of offers to
purchase from the Company is suspended (other than to
change interest rates or other variable terms) there shall
be any offers to purchase Notes 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.
Authenticity of The Agents will have no obligation or liability to the
Signatures: 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.
</TABLE>
-11-
<PAGE> 12
<TABLE>
<S> <C>
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.
</TABLE>
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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 October __, 1995, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC, dated May
26, 1989 (the "Certificate Agreement"), and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
<TABLE>
<S> <C>
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
</TABLE>
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<PAGE> 14
<TABLE>
<S> <C>
agent. Each Book-Entry Note will bear interest from a
date (the "Interest Accrual Date") which will be (a)
with respect to an original Book-Entry Note (or any
portion thereof), its Original Issue Date and (b) with
respect to any Book-Entry Note (or portion thereof) issued
subsequently upon exchange or transfer of a Book-Entry Note
or in lieu of a destroyed, lost or stolen Book-Entry Note,
the most recent Interest Payment Date (or, in the case of
Floating Rate Notes with interest rates which reset daily
or weekly, the day following the most recent Record Date
to which interest has been paid or duly provided for on
the predecessor Book-Entry Note or Notes (or if no such
payment or provision has been made, the Original Issue
Date of the predecessor Book-Entry Note or Notes),
regardless of the date of authentication of such
subsequently issued Book-Entry Note. No Book-Entry Note
shall represent any Certificated Note.
Identification: The Agents have arranged with the CUSIP Service Bureau (the
"CUSIP Service Bureau") of Standard & Poor's Corporation
("Standard & Poor's") for the reservation of approximately
900 CUSIP numbers for each rank of Notes which have been
reserved for future assignment to Book-Entry Notes
representing Notes issued in book-entry form and have
delivered to the Company, the Trustee and DTC an initial
written list of such CUSIP numbers. The Trustee will
assign CUSIP numbers to Book-Entry Notes as described below
under Settlement Procedure B. DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the
Trustee has assigned to Book-Entry Notes. The Trustee will
notify the Company at
</TABLE>
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<PAGE> 15
<TABLE>
<S> <C>
any time when fewer than 100 of the respective reserved
CUSIP numbers remain unassigned to Book-Entry Notes, and,
if it deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Book-Entry Notes
representing Notes issued in book-entry form. Upon
obtaining such additional CUSIP numbers, the
Company will deliver a list of such additional numbers to
the Trustee and DTC. Book-Entry Notes having an aggregate
principal amount in excess of $200,000,000 and otherwise
required to be represented by the same Global Certificate
will instead be represented by two or more Global
Certificates which shall be assigned the same CUSIP number.
Registration: Each Book-Entry Note will be registered in the name of CEDE
& CO., as nominee for DTC, on the register maintained by
the Trustee under the Indenture. The beneficial owner of a
Book-Entry Note (i.e., an owner of a beneficial interest in
a Book-Entry Note), or one or more indirect participants in
DTC designated by such owner, will designate one or more
participants in DTC (with respect to such Book-Entry Note,
the "Participants") to act as agent for such beneficial
owner in connection with the book-entry system maintained
by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such Participants,
a credit balance with respect to such Book-Entry Note in
the account of such Participants. The ownership interest
of such beneficial owner in such Book-Entry Note will be
recorded through the records of such Participants or
through the separate records of such Participants and one
or more indirect participants in DTC.
</TABLE>
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Transfers: Transfers of beneficial interests in a Book-Entry Note will
be accomplished by book entries made by DTC and, in turn,
by Participants (and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial trans-
ferors 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
</TABLE>
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exchanged Book-Entry Notes will, in accordance with CUSIP
Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing, if
the Book-Entry Notes to be exchanged exceed $200,000,000 in
aggregate principal amount, one replacement Book-Entry Note
will be authenticated and issued to represent each
$200,000,000 of principal amount of the exchanged Book-
Entry Notes and an additional Book-Entry Note will be
authenticated and issued to represent any remaining
principal amount of such Book-Entry Notes (see
"Denominations" below).
Denominations: All Book-Entry Notes will be denominated in U.S. dollars
and will be issued in denominations of $1,000 and integral
multiples thereof. Book-Entry Notes will be denominated in
principal amounts not in excess of $200,000,000. If one or
more Book-Entry Notes having an aggregate principal amount
in excess of $200,000,000 would, but for the preceding
sentence, be represented by a single Book-Entry Note, then
one Book-Entry Note will be issued to represent each
$200,000,000 principal amount of such Note or Notes issued
in book-entry form and an additional Book-Entry Note will
be issued to represent any remaining principal amount of
such Note or Notes issued in book-entry form. In such a
case, each of the Book-Entry Notes shall be assigned the
same CUSIP number.
Interest: General. Interest on each Note issued in book-entry form
will accrue from the Interest Accrual Date of the Book-
Entry Note representing such Note. Each payment of
interest on a Book-Entry Note will include interest accrued
through the day preceding, as the case may
</TABLE>
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be, the Interest Payment Date (provided that in the
case of Floating Rate Notes with interest rates which reset
daily or weekly interest payments will include interest
accrued to and including the Regular Record Date immediately
preceding the Interest Payment Date), the Stated Maturity Date,
Redemption Date or Repayment Date. Interest payable at Maturity
of a Book-Entry Note will be payable to the Person to whom the
principal of such Note is payable. DTC will arrange for each
pending deposit message described under Settlement Procedure C
below to be transmitted to Standard & Poor's Corporation ("S&P"),
which will use the information in the message to include certain
terms of the related Book-Entry Note in the appropriate daily
bond report published by S&P.
Interest Payment Dates. Interest payments will be made on
each Interest Payment Date commencing with the first
Interest Payment Date following the Original Issue Date;
provided, however, the first payment of interest on any
Book-Entry Note originally issued between a Regular Record
Date and an Interest Payment Date will occur on the
Interest Payment Date following the next Regular Record
Date.
Fixed Rate Notes. Interest payments on Fixed Rate Book-
Entry Notes will be made semiannually on June 15 and
December 15 of each year and at Maturity.
Floating Rate Notes. Except as provided in Part I under
"Calculation of Interest", the Interest Payment Date for a
Floating Rate Note will be, in the case of Floating Rate
Notes which reset
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daily, weekly or monthly, on the third Wednesday of each
month or on the third Wednesday of March, June, September
and December of each year as specified in the applicable
Pricing Supplement; in the case of Floating Rate Notes
which reset quarterly, on the third Wednesday of
March, June, September and December of each year; in the
case of Floating Rate Notes which reset semiannually, on
the third Wednesday of the two months of each year
specified in the applicable Pricing Supplement; or, in the
case of Eleventh District Cost of Funds Rate Notes, on the
first Business Day of each month or the first Business Day
of each March, June, September or December as specified in
the applicable Pricing Supplement and in the case of
Floating Rate Notes which reset annually, on the third
Wednesday of the month specified in the applicable Pricing
Supplement; and, in each case, at Maturity. For additional
special provisions relating to Floating Rate Notes, see the
Prospectus Supplement.
Regular Record Dates. The Regular Record Date with respect
to any Interest Payment Date for a Fixed Rate Note shall be
the May 31 or November 30 preceding such Interest Payment
Date. The Regular Record Date with respect to any Interest
Payment Date for any Floating Rate Note shall be the date
15 calendar days (whether or not a Business Day) preceding
such Interest Payment Date.
Notice of Interest Payments and Regular Record Dates. On
the first Business Day of January, April, July and October
of each year, the Trustee will deliver to the Company and
DTC a written list of Regular Record Dates and Interest
Payment
</TABLE>
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Dates that will occur during the six-month period
beginning on such first Business Day with respect to
Floating Rate Book-Entry Notes. Promptly after each
Interest Determination Date for Floating Rate Book-Entry
Notes, the Company will notify S&P of the interest rates
determined on such Interest Determination Date.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each Regular
Record Date, the Trustee will deliver to the Company and
DTC a written notice specifying by CUSIP number the amount
of interest to be paid on each Book-Entry Note issued under
the Indenture on the following Interest Payment Date (other
than an Interest Payment Date coinciding with Maturity) and
the total of such amounts. DTC will confirm the amount
payable on each Book-Entry Note on such Interest Payment
Date by reference to the daily bond reports published by
Standard & Poor's. On such Interest Payment Date, the
Company will pay to the Trustee, and the Trustee in turn
will pay to DTC, such total amount of interest due (other
than at Maturity), at the times and in the manner set forth
below under "Manner of Payment."
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
</TABLE>
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Maturity of such Book-Entry Note. At such maturity, the
Company will pay to the Trustee, and the Trustee in turn
will pay to DTC, the principal amount of such Note,
together with interest and premium, if any, due at such
Maturity, at the times and in the manner set forth below
under "Manner of Payment." Promptly after payment to DTC
of the principal, interest and premium, if any, due at the
Maturity of such Book-Entry Note, the Trustee will cancel
and destroy such Book-Entry Note and deliver to the Company
a certificate of destruction therefor.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Book-Entry Notes on
any Interest Payment Date or at Maturity shall be paid by
the Company to the Trustee in funds available for use as of
9:30 a.m., New York City time, on such date. The Company
will make such payment on such Book-Entry Notes by
instructing the Trustee to withdraw funds from an account
maintained by the Company with the Trustee. The Company
will confirm such instructions in writing to the Trustee.
Prior to 10:00 a.m., New York City time, on such date or as
soon as possible thereafter, the Trustee will pay by
separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate use by
DTC, each payment of principal (together with interest and
premium, if any) due on a Book-Entry Note on such date.
Thereafter on such payment date, DTC will pay, in
accordance with its SDFS operating procedures then in
effect, such amounts in funds
</TABLE>
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available for immediate use to the respective Participants in
whose names such Notes are recorded in the book-entry system
maintained by DTC. Neither the Company nor the Trustee shall
have any responsibility or liability for the payment by DTC of
the principal of, or interest on, the Book-Entry Notes to such
Participants.
Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on
a Note will be determined and withheld by the Participant,
indirect participant in DTC or other Person responsible for
forwarding payments and materials directly to the benefi-
cial owner of such Note.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note
sold by the Agents, as agents of the Company, will be as
follows:
A. The Presenting Agent will advise the Company by
telephone of the following Settlement information:
1. Taxpayer identification number of the
purchaser.
2. Principal amount of the Note.
3. Fixed Rate Notes:
(a) interest rate
Floating Rate Notes:
(a) interest rate basis;
(b) initial interest rate;
(c) spread and/or spread multiplier,
if any;
(d) initial interest reset dates;
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(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent
(i) maximum interest rate, if any;
(j) minimum interest rate, if any;
(k) alternate rate event spread; and
(l) interest rate reset dates.
5. Price to public of the Note.
6. Trade date.
7. Settlement Date (Original Issue Date).
8. Stated Maturity.
9. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption Percentage
(c) Annual Redemption Percentage
Reduction
10. Optional Repayment Date(s), if any.
11. Net proceeds to the Company.
12. Presenting Agent's commission.
B. The Company will advise the Trustee by telecopy or
other method acceptable to the Trustee of the
above settlement information received with respect
to each Note from the
</TABLE>
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Presenting Agent and shall confirm to the Trustee
that the principal amount of Notes, including such
Note, issued as of the relevant Settlement Date shall
not exceed the limit with respect to the principal
amount of Notes specified in the most recent Company
Order delivered to the Trustee pursuant to Section 303
of the Indenture.
C. The Trustee will assign a CUSIP Number to the
Book-Entry Note and will telephone and advise the
Company and the Presenting Agent of such CUSIP
Number. The Trustee will communicate to DTC and
the Presenting Agent through DTC's Participant
Terminal System a pending deposit message
specifying the following settlement information:
1. The information set forth in Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of
the Trustee and the Presenting Agent.
3. Identification as a Fixed Rate Book-Entry
Note or Floating Rate Book-Entry Note.
4. Initial Interest Payment Date for such
Note, number of days by which such date
succeeds the related record date for DTC
purposes (or, in the case of Floating Rate
Notes which reset daily or weekly, the
date five calendar days preceding the
Interest Payment
</TABLE>
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Date) and, if then calculable, the amount
of interest payment on such Interest Payment
Date (which amount shall have been confirmed
by the Trustee).
5. CUSIP number of the Book-Entry Note
representing such Note.
6. Whether such Book-Entry Note represents
any other Notes issued or to be issued in
book-entry form.
D. The Company will deliver to the Trustee a Book-
Entry Note representing such Note in a form that
has been approved by the Company, the Agents and
the Trustee.
E. The Trustee will complete and authenticate the
Book-Entry Note.
F. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such Note
to the participant account of the Presenting Agent
maintained by DTC and (ii) to debit the settlement
account of the Presenting Agent and credit the
settlement account of the Trustee maintained by
DTC, in an amount equal to the price of such Note
less the Presenting Agent's commission. Any entry
of such a deliver order shall
</TABLE>
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be deemed to constitute a representation and warranty
by the Trustee to DTC that (i) the Book-Entry Note has
been issued and authenticated and (ii) the Trustee
is holding such Book-Entry Note pursuant to the
Certificate Agreement between the Trustee and DTC.
H. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Presenting Agent's participant account and credit
such Note to the participant account of the
Participants maintained by DTC and (ii) to debit
the settlement accounts of such Participants and
credit the settlement account of the Presenting
Agent maintained by DTC, in an amount equal to the
initial public offering price of such Note.
I. Transfers of funds in accordance with SDFS
delivery orders described in Settlement Procedures
G and H will be settled in accordance with SDFS
operating procedures in effect on the Settlement
Date.
J. The Trustee will credit to an account of the
Company maintained by the Trustee funds available
for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure G.
K. The Trustee will send a copy of the Book-Entry
Note to the Company together with a statement
setting forth the principal amount of Notes
Outstanding as of the related
</TABLE>
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Settlement Date after giving effect to such
transaction and all other offers to purchase Notes of
which the Company has advised the Trustee but which have not
been settled.
L. The Presenting Agent will confirm the purchase of
such Note to the purchaser either by transmitting
to the Participant with respect to such Note a
confirmation order through DTC's Participant
Terminal System or by mailing a written confirma-
tion 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
</TABLE>
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If a sale is to be settled more than one Business Day after
the trade date, Settlement Procedures A, B, and C may, if
necessary, be completed at any time prior to the specified
times on the first Business Day after such trade date. In
connection with a sale which is to be settled more than one
Business Day after the trade date, if the initial interest
rate for a Floating Rate Note is not known at the time that
Settlement Procedure A is completed, Settlement Procedures
B and C shall be completed as soon as such rates have been
determined, but no later than 11:00 a.m. and 2:00 p.m., New
York City time, respectively, on the second Business Day
before the Settlement Date. Settlement Procedure I is
subject to extension in accordance with any extension of
Fedwire closing deadlines and in the other events specified
in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Company shall notify the Trustee and the
Trustee will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such effect by
no later than 2:00 p.m., New York City time, on the
Business Day immediately preceding the scheduled Settlement
Date.
Failure to Settle: If the Trustee has not entered an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement
Procedure G, then upon written request (which may be
evidenced by facsimile transmission) of the Company the
Trustee shall deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a withdrawal
message instructing DTC to debit
</TABLE>
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such Note to the participant account of the Trustee maintained at DTC. DTC
will process the withdrawal message, provided that such participant account
contains a principal amount of the Book-Entry Note representing such Note that is
at least equal to the principal amount to be debited. If withdrawal messages are
processed with respect to all the Notes represented by a Book-Entry Note, the
Trustee will mark such Book-Entry Note "cancelled", make appropriate entries in
its records and send such cancelled Book-Entry Note to the Company. The CUSIP
number assigned to such Book-Entry Note shall, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately reassigned. If withdrawal
messages are processed with respect to a portion of the Notes represented by a
Book-Entry Note, the Trustee will exchange such Book-Entry Note for two
Book-Entry Notes, one of which shall represent the Book-Entry Notes for which
withdrawal messages are processed and shall be cancelled immediately after
issuance, and the other of which shall represent the other Notes previously
represented by the surrendered Book-Entry Note and shall bear the CUSIP number of
the surrendered Book-Entry Note.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Presenting Agent may enter SDFS
deliver orders through DTC's Participant Terminal System reversing Settlement
Procedures G and H, respectively. Thereafter,
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the Trustee will deliver the withdrawal message and take
the related actions described in the preceding paragraph.
If such failure shall have occurred for any reason other
than default by the Presenting Agent to perform its
obligations hereunder or under the Distribution Agreement,
the Company will reimburse the Presenting Agent on an
equitable basis for its loss of the use of funds during the
period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any actions
in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect
to a Note that was to have been represented by a Book-Entry
Note also representing other Notes, the Trustee will
provide, in accordance with Settlement Procedures D and E,
for the authentication and issuance of a Book-Entry Note
representing such remaining Notes and will make appropriate
entries in its records.
</TABLE>
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
<TABLE>
<S> <C>
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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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. How-
ever, the first payment of interest on any Certificated
Note issued between a Regular Record Date and an Interest
Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date. The
Regular Record Date with respect to any Interest Payment
Date for a Fixed Rate Certificated Note shall be the May 31
or November 30 preceding such Interest Payment Date.
Interest at Maturity will be payable to the person to whom
the principal is payable.
Except as provided in Part I under "Calculation of
Interest", the Interest Payment Date for a Floating Rate
Certificated Note will be, in the case of Floating Rate
Notes which reset daily, weekly or monthly, on the third
Wednesday of each month or on the third Wednesday of March,
June, September and December of each year as specified in
the applicable Pricing Supplement; in the case of Floating
Rate 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;
</TABLE>
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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 exclud-
ing, 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
</TABLE>
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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.
</TABLE>
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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 Regis-
tered 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;
</TABLE>
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(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.
</TABLE>
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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
</TABLE>
-36-
<PAGE> 37
<TABLE>
<S> <C>
photocopy thereof to the applicable Presenting Agent
at the following addresses:
Merrill Lynch & Co., Money Market Clearance,
55 Water Street, 3rd Floor, N.S.C.C. Window, New
York, New York 10041, Attention: Al Mitchell
Telephone: (212) 558-2405
Telecopy: (212) 558-2457
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 acknowledgment of
receipt.
Upon determination that the Certificated Note,
including the related Guarantee, has been
authorized, delivered and completed as
aforementioned, the Presenting Agent will wire the
net proceeds of the Certificated Note after
deduction of its applicable commission to the
Company pursuant to standard wire instructions
given by the Company.
E. The Presenting Agent will deliver the Certificated
Note,
</TABLE>
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<PAGE> 38
<TABLE>
<S> <C> <C>
the related Guarantee endorsed thereon, as
well as a copy of the Prospectus and any
applicable Pricing Supplement or Supplements
received from the Trustee, to the purchaser
against payment in immediately available funds.
F. The Trustee will send a photocopy of the Certified
Note to the Company.
Settlement Procedures
Timetable: For offers to purchase Certificated Notes accepted by the
Company, Settlement Procedures "A" through "F" set forth
above shall be completed on or before the respective times
set forth below:
Settlement
Procedure Time
---------- ----
A-B 3:00 PM on Business Day prior to Settle-
ment
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
</TABLE>
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<PAGE> 39
<TABLE>
<S> <C>
will promptly arrange to credit the account of the Presenting
Agent in an amount of immediately available funds equal to
the amount previously paid by the Presenting Agent in
settlement for the Certificated Note. Such credits will be
made on the Settlement Date if possible, and in any event
not later than the Business Day following the Settlement
Date; provided that the Company has received notice on the
same day. If such failure shall have occurred for any
reason other than failure by the Presenting Agent to
perform its obligations hereunder or under the Distribution
Agreement, the Company will reimburse the Presenting Agent
on an equitable basis for its loss of the use of funds
during the period when the funds were credited to the
account of the Company. Immediately upon receipt of the
Certificated Note in respect of which the failure occurred,
the Trustee or the Company's duly authorized agent will
cancel and destroy the Certificated Note, make appropriate
entries in its records to reflect the fact that the
Certificated Note was never issued, and accordingly notify
in writing the Company.
</TABLE>
-39-
<PAGE> 1
EXHIBIT (10)(c)
BANPONCE CORPORATION
INTEREST CALCULATION AGENCY AGREEMENT
INTEREST CALCULATION AGENCY AGREEMENT between BanPonce Corporation, a
Puerto Rico corporation (the "Issuer"), and The First National Bank of Chicago,
dated as of October 6, 1995.
PRELIMINARY STATEMENT
1. The Issuer proposes to issue and sell its Medium-Term Notes,
Series 2 (the "Notes") from time to time under, and pursuant to, the terms of
an Indenture, dated as of February 15, 1995 (the "Indenture," the terms defined
being used herein as defined therein or in the Notes), between the Issuer and
The First National Bank of Chicago, trustee thereunder (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 The First National Bank of Chicago
hereby agree as follows:
<PAGE> 2
Section 1. Appointment of Calculation Agent. The Issuer
hereby appoints The First National Bank of Chicago 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
Determination Dates and Base Rate for such Floating Rate Note.
-2-
<PAGE> 3
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 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,
-3-
<PAGE> 4
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.
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
-4-
<PAGE> 5
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 termination by the
Calculation Agent or by the Issuer shall not become effective prior to the date
of the 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
-5-
<PAGE> 6
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 like
effect as if originally named as Calculation Agent 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
-6-
<PAGE> 7
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 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:
-7-
<PAGE> 8
To the Issuer:
BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: Chief Financial Officer
Facsimile: (809) 767-8948
To the Calculation Agent:
The First National Bank of Chicago
153 W. 51st Street
Suite 4011
New York, New York 10019
Attention: Corporate Trust Administration
Facsimile: (212) 373-1383
To the Trustee:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration
Facsimile: (312) 407-1708
Any notice hereunder given by letter, telecopy or telex shall be deemed to have
been received when it would have 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.
Section 15. Counterparts. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such
-8-
<PAGE> 9
counterparts shall together constitute one and the same instrument.
-9-
<PAGE> 10
IN WITNESS WHEREOF, this Agreement has been entered into the day and
year first above written.
BANPONCE CORPORATION
By:
--------------------------------
Name: David H. Chafey, Jr.
Title: Executive Vice-President
THE FIRST NATIONAL BANK
OF CHICAGO
By:
-------------------------------
Name:
Title:
-10-
<PAGE> 1
EXHIBIT (10)(d)
BANPONCE FINANCIAL CORP.
INTEREST CALCULATION AGENCY AGREEMENT
INTEREST CALCULATION AGENCY AGREEMENT between BanPonce Financial Corp.,
a Delaware corporation (the "Issuer"), and The First National Bank of Chicago,
dated as of October 6, 1995.
PRELIMINARY STATEMENT
1. The Issuer proposes to issue and sell its Medium-Term Notes,
Series C (the "Notes") from time to time under, and pursuant to, the terms of
an Indenture, dated as of October 1, 1991, as amended by the First Supplemental
Indenture, dated as of February 28, 1995 (together, 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 The First National
Bank of Chicago, trustee thereunder (acting in such capacity, the "Trustee"),
as Successor Trustee to Citibank, N.A.
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
<PAGE> 2
and described in the Floating Rate Notes, a copy of which is attached
hereto as Exhibit A.
NOW, THEREFORE, the Issuer and The First National Bank of Chicago hereby
agree as follows:
Section 1. Appointment of Calculation Agent. The Issuer hereby
appoints The First National Bank of Chicago 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
-2-
<PAGE> 3
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 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,
-3-
<PAGE> 4
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 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
-4-
<PAGE> 5
such) does not assume any obligation towards, or any relationship of
agency or trust for or with the holders of the Notes.
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
-5-
<PAGE> 6
date when the termination shall become effective; provided, however,
that not termination by the Calculation Agent or by the Issuer shall become
effective prior to the date of the 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
-6-
<PAGE> 7
or instrument, become vested with all the rights, immunities, duties and
obligations of the Calculation Agent, with like effect as if originally named as
Calculation Agent 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
-7-
<PAGE> 8
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 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:
The First National Bank of Chicago
153 W. 51st Street
Suite 4011
New York, New York 10019
Attention: Corporate Trust Administration
Facsimile: (212) 373-1383
-8-
<PAGE> 9
To the Trustee:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration
Facsimile: (312) 407-1708
Any notice hereunder given by letter, telecopy or telex shall be deemed
to have been received when it would have 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.
Section 15. Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
-9-
<PAGE> 10
IN WITNESS WHEREOF, this Agreement has been entered into the day and
year first above written.
BANPONCE FINANCIAL CORP.
By: _______________________
Name: David H. Chafey, Jr.
Title: President
THE FIRST NATIONAL BANK
OF CHICAGO
By: ________________________
Name:
Title:
-10-
