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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):
May 23, 1997
POPULAR. INC.
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
COMMONWEALTH OF PUERTO RICO No. 0-13818 No. 66-0416582
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(State or other jurisdiction of incorporation) (Commission File (IRS Employer
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)
</TABLE>
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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
Popular, Inc., Merrill Lynch & Co., Credit Suisse First
Boston Corporation, Chase Securities, Inc. and First Chicago
Capital Markets, Inc. (Incorporated by reference from the
Current Report on Form 8-K of Popular, Inc., dated October 6,
1995)
(1)(c) Amendment No. 1, dated May 23, 1997, to the Distribution
Agreement, dated October 6, 1995, among Popular, Inc., Merrill
Lynch & Co., Credit Suisse First Boston Corporation, Chase
Securities, Inc. and First Chicago Capital Markets, Inc.
(1)(d) Distribution Agreement, dated October 11, 1991, as amended
on December 2, 1993, on October 6, 1995, and on May 23, 1997,
among Popular North America, Inc., Popular, Inc., Merrill
Lynch & Co., Credit Suisse First Boston Corporation, Chase
Securities, Inc. and First Chicago Capital Markets, Inc.
(4)(l) Form of Fixed Rate Medium-Term Note, Series 3, of Popular,
Inc.
(4)(m) Form of Floating Rate Medium-Term Note, Series 3, of Popular,
Inc.
(4)(n) Form of Fixed Rate Medium-Term Note, Series D, of Popular
North America, Inc., endorsed with the guarantee of Popular,
Inc.
(4)(o) Form of Floating Rate Medium-Term Note, Series D, of Popular
North America, Inc., endorsed with the guarantee of Popular,
Inc.
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(8)(a) Tax opinion of Sullivan & Cromwell in connection with
Popular, Inc. Medium-Term Notes, Series 3.
(8)(b) Tax opinion of Sullivan & Cromwell in connection with Popular
North America, Inc. Medium-Term Notes, Series D.
(8)(c) Tax opinion of McConnell Valdes in connection with Popular,
Inc. Medium-Term Notes, Series 3.
(10)(a) Administrative Procedures governing Medium-Term Notes, Series
3, of Popular, Inc.
(10)(b) Administrative Procedures governing Medium-Term Notes, Series
D, of Popular North America, Inc., fully guaranteed by
Popular, Inc.
(10)(c) Interest Calculation Agency Agreement, dated as of May 23,
1997, between Popular, Inc. and The First National Bank of
Chicago.
(10)(d) Interest Calculation Agency Agreement, dated as of May 23,
1997, between Popular North America, Inc. and The First
National Bank of Chicago.
(23)(c) Consents of Counsel (included in Exhibits (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.
POPULAR, INC.
(Registrant)
Date: June 11, 1997 By:/s/ Jorge A. Junquera
------------------------
Name: Jorge A. Junquera
Title: Senior Executive Vice President
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Exhibit 1(c)
AMENDMENT NO. 1 TO DISTRIBUTION AGREEMENT
May 23, 1997
WHEREAS, the parties hereto have previously entered into a
Distribution Agreement, dated October 6, 1995, as supplemented on the date
hereof (the "Distribution Agreement"), among Popular, Inc. (the "Corporation")
(formerly BanPonce Corporation), and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities Inc., Credit Suisse 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 (the "Notes"); and
WHEREAS, the Company and each of the Agents wish to amend the
Distribution Agreement to reflect the presumption that the Agents will purchase
the Notes as principal and that the Agents will act as agents of the Company in
soliciting offers to purchase Notes only when agreed upon by the Company and
the applicable Agent;
NOW, THEREFORE, the Company and each of the Agents hereby agree to
amend the Distribution Agreement as follows:
1. Section 1(c) of the Distribution Agreement is hereby amended to
read as follows:
(c) Purchases as Principal; Solicitations as Agent. The Agents
shall not have any obligation to purchase Notes from the Company as
principal. However, absent an agreement between an Agent and the
Company that such Agent shall be acting solely as an agent for the
Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such
Agent. Accordingly, the Agents, individually or in a syndicate, may
agree from time to time to purchase Notes from the Company as
principal for resale to investors and other purchasers determined by
such Agents. Any purchase of Notes from the Company by an Agent as
principal shall be made in accordance with Section 3(b) hereof. If
agreed upon between an Agent and the Company, such Agent, acting
solely as an agent for the Company and not as principal, will solicit
offers for the purchase of Notes. Such Agent shall make reasonable
efforts to assist the Company in obtaining performance by each
purchaser whose offer for the purchase of Notes has been solicited by
it on an agency basis and accepted by the Company. Such Agent shall
not have any liability to the Company in the event that any such
purchase is not consummated for any reason, except in the event that
such
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sale is not consummated due to the failure of such Agent to perform
its obligations hereunder.
2. The first paragraph of Section 3(a) of the Distribution
Agreement is hereby amended to read as follows:
On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, when agreed
upon by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers to purchase
the Notes upon the terms and conditions set forth herein and in the
Prospectus.
3. 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.
2
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
1 to the Distribution Agreement to be executed on their behalf as of the day
and year first above written.
POPULAR, INC.
By: /s/ Jorge A. Junquera
-------------------------------------------
Accepted:
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: /s/ Richard N. Doyle
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CHASE SECURITIES INC.
By: /s/ Susan Mangan-Dunn
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CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Michael E. Martin
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FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ John Roche
--------------------------
3
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BANPONCE FINANCIAL CORP.
Medium-Term Notes Due From
9 Months to 30 Years from Date of Issue
Unconditionally Guaranteed as to Payment
of Principal, Premium, if any, and Interest by
BANPONCE CORPORATION
DISTRIBUTION AGREEMENT
October 11, 1991
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower, 23 Floor
New York, New York 10281-1323
Dear Sirs:
BanPonce Financial Corp., a Delaware corporation ( the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Agent") with respect to the issue and sale by the
Company of its Medium-Term Notes described herein (the "Notes"). The Notes will
be unconditionally guaranteed as to payment of principal, premium, if any, and
interest (the "Guarantees") by BanPonce Corporation (the "Guarantor"). The Notes
and the Guarantees are to be issued pursuant to an Indenture, dated as of
October 1, 1991 (the "Indenture"), among the Company, the Guarantor and
Citibank, N.A., 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 $250,000,000 through
the Agent 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 Agent
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 Agent will act as an agent of the
Company in soliciting Note purchasers,
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and (as may from time to time be agreed to by the Company and the Agent) to the
Agent as principal for resale to purchasers.
The Company and the Guarantor have filed with he Securities and
Exchange Commission ( the "SEC") a registration statement on Form S-3 (No.
33-41686) for the registration of debt securities, including the Notes and the
Guarantees, 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 and the Guarantor for the purpose of
registering additional Notes and related Guarantees 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
Agent by the Company for use in connection with the offering of the Notes and
related Guarantees 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
Agent for such use.
SECTION 1. Appointment as Agent
(a) Appointment of Agent. 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 the 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 the 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 Agent is
not authorized to appoint sub-agents or to engage the services of any other
broker or dealer in connection with
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the offer or sale of the Notes. The Company agrees that, during the period that
the Agent is acting as the Company's agent hereunder, the Company will not
contact or solicit potential investors introduced to it by the Agent to purchase
the Notes. Notwithstanding anything to the contrary contained herein, the
Company may, upon one day's prior written notice to the Agent, 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 Agent otherwise agrees, 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 counterpart of this Agreement, the
execution of such counterpart by the Additional Agent, and the delivery of
executed copies of such counterpart to the Agent and its counsel. Thereafter the
term Agent as used in this Agreement shall mean the Agent 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.
(b) Reasonable Efforts Solicitations; Right to Reject Offers. Upon
receipt of instructions from the Company, the Agent will use its reasonable
efforts to solicit purchases of such principal amount of the Notes as the
Company and the 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 Agent 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. The Agent will communicate to
the Company, orally or in writing, each offer to purchase Notes, other than
those offers rejected by the Agent. The 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 the
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 Agents; Purchases as Principal. In soliciting
purchases of the Notes on behalf of the Company, the Agent shall act solely as
agent for the Company and not as
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principal. The Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been
solicited by the Agent and accepted by the Company. The Agent shall not 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 the Agent to perform its obligation hereunder. The Agent shall not
have any obligation to purchase Notes from the Company as principal, but the
Agent may agree from time to time to purchase Notes as principal. Any such
purchase of Notes by the Agent as principal shall be made pursuant to a Terms
Agreement in accordance with Section 3(b) hereof.
(d) Reliance. The Company and the Agent agree that any Notes the
placement of which the Agent arranges shall be placed by the Agent, and any
Notes purchased by the Agent shall be purchased in reliance on the
representations, warranties, covenants and agreements of the Company and the
Guarantor contained herein and on the terms and conditions and in the manner
provided herein.
SECTION 2. Representations and Warranties of the Company the
Guarantor
(a) The Company and the Guarantor jointly and severally represent and
warrant to the Agent 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 the Agent as
agent or to the Agent as principal), as of the date of each delivery of Notes
(whether through the Agent as agent or to the Agent as principal) (the date of
each such delivery to the 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:
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(i) Due Incorporation and Qualification. Each of the
Guarantor and the Company has duly incorporated and is validly existing
as a corporation in good standing under the laws of its respective
jurisdiction of incorporation with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; the Guarantor is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended
(the "Bank Holding Company Act"); and each of the Guarantor and the
Company is duly qualified as a foreign corporation to transact 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 Guarantor and its subsidiaries considered as
one enterprise.
(ii) Subsidiaries. Each subsidiary of the Guarantor or the
Company which is a significant subsidiary (each, a "Significant
Subsidiary") as defined in Rule 405 of Regulation C of the 1933 Act
Regulations has been duly incorporated and is validly existing a
corporation 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 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'
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<PAGE> 6
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.
(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 Guarantor 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 Agent expressly for use in
the Registration Statement or Prospectus.
(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
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<PAGE> 7
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 circumstance 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 Guarantor and its
consolidated subsidiaries as of the dates indicated and the
consolidated results of their operations for the period 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
Indentures, the Guarantees and the Notes. This Agreement has been duly
authorized, executed and delivered by the Guarantor and the Company;
the Indenture has been duly authorized and, upon execution and delivery
by the Trustee, will a be valid and binding obligation of the Company
and the Guarantor 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
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<PAGE> 8
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' rights
generally and to general equity principles; the Guarantees have been
duly authorized and, upon due issuance, authentication and delivery of
the related Notes and due endorsement of the Guarantees, the Guarantees
will have been duly executed, issued and delivered and will be valid
and legally binding obligations of the Guarantor enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws relating
to or affecting creditors' rights generally and to general equity
principles; the Notes, the Guarantees and the Indenture will be
substantially in the form heretofore delivered to the Agent and conform
in all material respects to all statements relating thereto contained
in the Prospectus; and the Notes and the Guarantees 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
Statements 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 or the Guarantor
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, the Guarantor 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
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<PAGE> 9
or encumbrance upon any property or assets of the Company, the
Guarantor or any of the Significant Subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, the Guarantor 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, the Guarantor 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,
the Guarantor 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 Guarantor 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
Guarantor or the Company of the transactions contemplated by this
Agreement, except such 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.
(x) Legal Proceedings; Contracts. Except as may be set
forth in the Registration Statement, there is no action, suit or
proceedings before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Guarantor
or the Company, threatened against or affecting, the Company, the
Guarantor 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 Guarantor
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
the Guarantor 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, the Guarantor and the Significant Subsidiaries possess
adequate certificates, authorities
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<PAGE> 10
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, the Guarantor or the Significant Subsidiaries;
and neither the Company, the Guarantor 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 Guarantor and its subsidiaries considered as one enterprise.
(b) Additional Certificates. Any certificates signed by an officer of
the Guarantor or the Company and delivered to the Agent or to counsel for the
Agent in connection with an offering of Notes and related Guarantees or the sale
of Notes to the Agent as principal shall be deemed a representation and warranty
by the Company or the Guarantor, as the case may be, to the 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 set forth,
the Agent agrees, as an agent of the Company, to sue its reasonable efforts to
solicit offers to purchase the Notes upon the terms and conditions set forth
herein and in the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agent, as agent, commencing
at any time for any period of time or permanently. Upon receipt of instructions
from the Company, the Agent will forthwith suspend solicitation of purchases
from the Company until such time as the Company has advised the Agent that such
solicitation may be resumed.
The Company agrees to pay the 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 the Agent as set
forth in Schedule
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<PAGE> 11
A hereto. The 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 the 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
the Agent as agent will be sold at 100% of their principal amount unless
otherwise agreed to by the Company and the Agent.
(b) Purchases as Principal. Each sale of Notes to the Agent as
principal shall be made in accordance with the terms contained herein and
(unless the Corporation and the 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, the Agent. Each such separate agreement
(which may be an oral agreement) between the 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 the 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. The 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 representation and warranties of
the Company and the Guarantor 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. The Agent may 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 the Agent as
principal.
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(c) Administrative Procedures. Administrative procedures with respect
to the sale of Notes shall be agreed upon from time to time by the Agent, the
Company and the Guarantor (the "Procedures"). The Agent, on the one hand, and
the Company and the Guarantor, jointly and severally on the other hand, agree to
perform the respective duties and obligations specifically provided to be
performed by them in the procedure.
SECTION 4. Covenants of the Company and the Guarantor.
The Company and the Guarantor jointly and severally covenant with the
Agent as follows:
(a) Notice of Certain Events. The Company and the Guarantor will notify
the 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 and the Guarantor 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 and the Guarantor will give the
Agent notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes and related
Guarantees, 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 the 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
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or preparation, as the case may be, except for documents filed pursuant to the
1934 Act, which the Company or the Guarantor shall furnish to the 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.
(c) Copies of the Registration Statement and the Prospectus. The
Company and the Guarantor will deliver to the 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 the Agent may
reasonably request. The Company and the Guarantor will furnish the Agent with as
many copies of the Prospectus (as amended or supplement) as the Agent shall
reasonably request so long as the 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 and Guarantor will
prepare, with respect to any Notes to be sold through or to the Agent 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 Pricing Supplement is first used.
(e) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (1) 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
Agent to cease the solicitation of offers to purchase the Notes in the Agent's
capacity as agent and to cease sales of any Notes the Agent may then own as
principal pursuant to a Terms Agreement, and the Company and the Guarantor will
promptly prepare and file with the SEC such amendment or supplement, whether by
filing
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<PAGE> 14
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 (1) of this Section, on the date on which there
shall be released to the general public interim consolidated financial statement
information related to the Guarantor 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 Guarantor shall furnish such information to the
Agent, confirmed in writing, and promptly thereafter shall cause the
Registration Statement and the Prospectus to be amended or supplemented to
include or incorporate by reference capsule financial information with respect
to the results of operations of the Guarantor and its consolidated subsidiaries
for such period.
(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (1) 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 Guarantor for the preceding
fiscal year, the Company and the Guarantor 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 Guarantor 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
Guarantor'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
and issuance of the related Guarantees.
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<PAGE> 15
(i) Blue Sky Qualifications. The Company and the Guarantor will
endeavor, in cooperation with the Agent, to qualify the Notes and related
Guarantees for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as Agent and the Company
shall agree and, unless the Company otherwise notifies the Agent, will maintain
such qualifications in effect for as long as may be required for the
distribution of the Notes and related Guarantees; provided, however, that the
Company and the Guarantor shall not be required to submit to general service of
process in any jurisdiction. The Company and the Guarantor will promptly advise
the Agent of their receipt of any notification with respect to the suspension of
the qualification of the Notes and related Guarantees for sale in any such state
or jurisdiction or the initiating or threatening of any proceeding for such
purpose.
(j) 1934 Act Filings. The Guarantor and 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 date of any Terms Agreement and the Settlement Date with
respect to such Terms Agreement, the Company and the Guarantor will not, without
the Agent's prior consent, offer or sell, or enter into any agreement to sell,
any debt securities of the Company or the Guarantor (other than the Notes that
are to be sold pursuant to such Terms Agreement and commercial paper).
(l) Suspension of Certain Obligations. The Company and the Guarantor
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 Agent shall have
suspended solicitation of purchases of the Notes in its capacity as agent
pursuant to a request from the Company and the Guarantor and (ii) the Agent
shall not then hold any Notes as principal purchased pursuant to a Terms
Agreement, to the time the Company and the Guarantor shall determine that
solicitation of purchases of the Notes should be resumed or shall subsequently
enter into a new Terms Agreement with the Agent.
(m) Public Reports. The Company and the Guarantor will furnish to the
Agent, at the earliest time the Company and the
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Guarantor make 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 the Agent to solicit offers to purchase the Notes as
agent of the Company, the obligations of any purchasers of Notes sold through
the Agent as agent, any obligation of the 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 and the Guarantor
contained herein and to the accuracy of the statements of the officers of the
Company and the Guarantor made in any certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company and the
Guarantor of all their respective covenants and agreements herein contained and
to the following additional conditions precedent:
(a) Legal Opinions. On the date hereof, the Agent shall have received
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agent:
(1) Opinion of Counsel to the Company and the Guarantor. The
opinion of Sullivan & Cromwell, Counsel to the Guarantor and the
Company to the effect that:
(i) The Company has been duly incorporated and
is an existing corporation in good standing under the laws of
the State of Delaware.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement.
(iii) The Company 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 or property or
the conduct of business.
(iv) The Guarantor is duly registered as a bank
holding company under the Bank Holding Act.
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<PAGE> 17
(v) The Indenture has been duly authorized,
executed and delivered by the Company and the Guarantor and
duly qualified under the Trust Indenture Act of 1939 and
constitutes a valid and legally biding obligation to the
Company and 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.
(vi) 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.
(vii) The issuance of the Guarantees has been duly
authorized and the Guarantees have been 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, the Guarantee endorsed on such Note 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
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affecting creditors' rights and to general equity principals.
(viii) All regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company and the Guarantor on or prior to the date hereof under
the federal laws of the United States, the laws of the State
of New York and the General Corporation Law of the State of
Delaware for the issuance, sale and delivery of the Notes by
the Company to or through the Agent have been obtained or
made; provided, however, that such counsel need express no
opinion with respect to state securities laws.
(ix) This Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor.
(x) The execution and delivery by the Company
and the Guarantor of the Indenture and this Agreement do not,
and the preparation, execution and issuance of each particular
Note and Guarantee in accordance with the Indenture, the sale
by the Company of such Note in accordance with this Agreement,
and the performance by the Company and the Guarantor of their
respective obligations under the Indenture, this Agreement,
the Notes and the Guarantees 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 or the Guarantor or
(c) violate the General Corporation law of the State of
Delaware; 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 performance by
the Company and the Guarantor of their respective obligations
under the Indenture, this Agreement, the Notes and the
Guarantees is concerned, such counsel need express no opinion
as to bankruptcy, insolvency,
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reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights.
(xi) 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. "Underwriting" 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 and the
Guarantor to the Agent and is solely for the benefit of the
Agent.
Such counsel may base their opinions, as to certain questions
of fact, on certificates of officers of the Company and the Guarantor
and may rely as to all matters relating to the laws of the Commonwealth
of Puerto Rico upon the opinion of Ernesto N. Mayoral, delivered
pursuant to Section 5(b)(2) hereof.
(2) Opinion of Puerto Rico Counsel to the Company and the
Guarantor. The opinion of Ernesto N. Mayoral, Puerto Rico Counsel to
the Guarantor, to the effect that:
(i) The Guarantor has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of Puerto Rico.
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<PAGE> 20
(ii) The Guarantor has corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement.
(iii) The Guarantor 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 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
their 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 Guarantor 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 Guarantor or 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 Guarantor.
(vi) This Agreement has been duly and validly
authorized, executed and delivered by the Guarantor and
constitutes a valid and legally binding obligation of the
Guarantor enforceable in
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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 Guarantees have 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, the Guarantee endorsed on such
Note 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; and the Guarantees will be
entitled to the benefits of the Indenture.
(viii) To the best of such counsel's knowledge,
neither the Company, the Guarantor 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 Guarantor of the Indenture and the Distribution Agreement
and any Terms Agreement do not, and the preparation, execution
and issuance of each particular Note and Guarantee 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 and the Guarantor of their
respective obligations under the Indenture, the Distribution
Agreement, the Notes, any Terms Agreement and the Guarantees
will not (a) violate the articles of incorporation or by-laws
of the Company or the
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<PAGE> 22
Guarantor, or (b) violate any Federal law of the United States
or any law or 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, the
Guarantor 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, the Guarantor or
any Significant Subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument known to such counsel to which the Company, the
Guarantor 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, the Guarantor or any of the
Significant Subsidiaries is subject; 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 transactions between
United States persons and citizens or residents of certain
foreign countries; provided, further, that insofar as
performance by the Company and the Guarantor of their
respective obligations under the Indenture, the Distribution
Agreement, any Terms Agreement, the Notes and the Guarantees
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.
(ix) 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, the Guarantor 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, the Guarantor or any such
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subsidiary, are, considered in the aggregate, not material.
(x) 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.
(xi) 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.
(xii) At the time the Registration State ment
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.
(xiii) Each document files pursuant to the 1934 Act
and incorporated by reference in the Prospectus compiled when
filed as to form in all material respects with the 1934 Act
and the 1934 Act Regulations thereunder.
(xiv) As counsel to the Company and the Guarantor
such counsel has reviewed the Registration Statement and the
Prospectus, participated in discussions with representatives
of the Agent and those of the Guarantor, the Company and their
accountants, and advised the Company and the Guarantor 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
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<PAGE> 24
performance of his services considered in the light of his
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 his
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 his attention in
the course of his review that has caused him 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 he 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 Securities and Guarantee", "Underwriting" and
"Plan of
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<PAGE> 25
Distribution" and the appropriate sections in any Prospectus
Supplement describing the securities offered thereby and under
"Regulation and Supervision" in the Guarantor's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990,
insofar as they relate to provisions of documents therein
described and that he 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 his letter is furnished
as counsel for the Company and the Guarantor to the Agent and
is solely for the benefit of the Agent.
Such counsel may base his opinion, as to certain
questions of fact, on certificates of officers of the Company
and the Guarantor 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 Agent. The opinion of Brown &
Wood, counsel to the Agent, covering the matters referred to in
subparagraph (1) above under the subheadings (i) and (v) to (vii),
inclusive, and (ix) and (xi) and in subparagraph (2) above under the
subheading (xii).
(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 (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) the Registration Statement, 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
Guarantor 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
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<PAGE> 26
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, 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, 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 Agent shall have
received certificates of the President or Vice President of each of the Company
and the Guarantor, 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
prospectus of the Guarantor 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 and the Guarantor 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 and
the Guarantor have 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 Agent on the date hereof and the Settlement
Date with respect to any Terms Agreement, if required by such Terms Agreement,
shall receive a letter form Price Waterhouse, the Guarantor's independent public
accountants, dated as of the date hereof or such Settlement Date, in form and
substance reasonably satisfactory to the Agent containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
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<PAGE> 27
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 Agent 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
and issuance of the related Guarantees as herein contemplated and related
proceedings and all proceedings taken by the Company or the Guarantor in
connection with the issuance and sale of Notes or issuance of the related
Guarantees, as the case may be, as herein contemplated shall be satisfactory in
form and substance to the Agent and to counsel to the Agent.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement (or, at the
option of the Agent, any applicable Terms Agreement) may be terminated by the
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 or 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 concerning the representations, warranties and agreements to survive
delivery of Section 11 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
Agent.
Delivery of Notes sold through the Agent as agent shall be made by the
Company to the Agent 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 Agent shall promptly notify the company and deliver
the Note to the Company, and, if the Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to the Agent. If such
failure occurred for any reason other than default by the Agent in the
performance of its obligations hereunder, the
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<PAGE> 28
Company will reimburse the Agent on an equitable basis for its 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 and the
Guarantor.
The Company and the Guarantor jointly and severally covenant with the
Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
it or an offer for the purchase of Notes, and each delivery of Notes to the
Agent pursuant to a Terms Agreement, shall be deemed to be an affirmation that
the representations and warranties of the Company and the Guarantor contained in
this Agreement and in any certificate theretofore delivered to the Agent
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 Agent, 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 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 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 under the Registration Statement
or (ii) a document filed pursuant to Section 14 of the 1934 Act unless requested
by the Agent) or (if required pursuant to the terms of a Terms Agreement) the
Company sells Notes to the Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished to the 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 Agent to the effect that the statements contained in
the certificates
-28-
<PAGE> 29
referred to in Section 5(b) hereof which were last furnished to the Agent 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 Agent shall otherwise specify, other than
by an amendment or supplement which relates exclusively 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 (i) any Current Report
on Form 8-K or Quarterly Report on Form 10-Q or (ii) a document filed pursuant
to Section 14 of the 1934 Act, in each case, unless the Agent shall otherwise
reasonably request), or (if required pursuant to the terms of a Terms Agreement)
the Company sells Notes to the Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to the Agent, with a copy to
counsel to the Agent, a written opinion or opinions of Counsel to the Company
and the Guarantor satisfactory to the Agent, 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 Agent, 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 Agent shall furnish the Agent with a letter to the effect that
the Agent 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).
-29-
<PAGE> 30
(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 Guarantor's interim
or annual financial statements or results of operations) or (if required
pursuant to the terms of a Terms Agreement) the Company sells Notes to the Agent
pursuant to a Terms Agreement, the Guarantor shall cause Price Waterhouse
forthwith to furnish the 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 they case may be, in form satisfactory to the Agent, 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 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 Agent, such letter should cover such other information.
SECTION 8. Indemnification.
(a) Indemnification of the Agent. The Company and the Guarantor jointly
and severally agree to indemnify and hold harmless the Agent and each person, if
any, who controls the 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
-30-
<PAGE> 31
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 and the Guarantor by the Agent
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 the
Guarantor; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Agent),
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 the Agent (or to the benefit of any person who controls such
Agent) if a copy of the Prospectus as amended or supplemented at the time of the
sale of such Note, excluding documents incorporated 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.
-31-
<PAGE> 32
(b) Indemnification of the Company and the Guarantor. The Agent agrees
to indemnify and hold harmless the Company and the Guarantor, their respective
directors, each of their officers who signed the Registration Statement, and
each person, if any, who controls the Company or the Guarantor 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 or the Guarantor by the 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, the Guarantor and the Agent shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company, the Guarantor and the Agent, as
incurred, in such proportions that the Agent is responsible for that portion
represented by the percentage that the total commissions and underwriting
discounts received by the Agent to the date of
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<PAGE> 33
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 and the Guarantor
are 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 from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls the 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 or the Guarantor, each officer of the Company or the Guarantor who
signed the Registration Statement, and each person, if any, who controls the
Company or the Guarantor within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company or the Guarantor, as the
case may be.
SECTION 10. Payment of Expenses.
(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 and the related Guarantees, 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 of exchange rate agent;
(v) The reasonable fees and disbursements of counsel to
the Agent incurred from time to time in connection with the
transactions contemplated hereby;
(vi) The qualification of the Notes and the related
Guarantees 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;
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<PAGE> 34
(vii) The printing and delivery to the Agent in quantities
as hereinabove stated of copies of the Registration Statement and any
amendments or supplements thereto, and the delivery by the Agent 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 Agent of copies of each Indenture and all supplements and
amendments thereto;
(ix) Any fees charged by rating agencies for the rating of
the Notes;
(x) Any advertising and other out-of-pocket expenses of
the Agent incurred with the written approval of the Company and the
Guarantor;
(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 or the Guarantor
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 Agent or
any controlling person of the Agent, or by or on behalf of the Company or the
Guarantor, 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 the Agent upon the giving of one day's written notice of such termination to
the other party hereto.
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<PAGE> 35
(b) Termination of a Terms Agreement. The Agent may terminate any Terms
Agreement, immediately upon notice to the Company and the Guarantor, 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 Guarantor 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 the 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 or the Guarantor 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 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 or the Guarantor 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
or the Guarantor on what is commonly termed a "watch list" for possible
downgrading.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agent 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) the 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
-35-
<PAGE> 36
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 or the Guarantor:
BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: David H. Chafey,
Executive Vice President
If to the Agent:
Merrill, Lynch & Co.
Merrill, Lynch, Pierce, Fenner & Smith
Incorporated
Merrill, Lynch World Headquarters
North Tower - 23rd Floor
World Financial Center
New York, New York 10281-1323
Attention: MTN Product Management,
J. Patrick Hannon
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 or the Guarantor against the Agent
in connection with or arising under this Agreement shall
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<PAGE> 37
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
Agent, the Company, the Guarantor and their respective successors. 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 Guarantor irrevocably consents and agrees, for the benefit of
the holders from time to time of the Notes, the Agent 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, any Terms Agreement or the
Guarantees 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 or the Guarantees 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 Guarantor hereby irrevocably designates, appoints, and empowers
Paul Carr, with offices currently at 7
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<PAGE> 38
West 57th 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 Guarantor 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, any Terms
Agreement or the Guarantees 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
Guarantor 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 Agent. The Guarantor 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 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 Guarantor at its address specified in or
designated pursuant to this Agreement. The Guarantor 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
judgement 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
Agent 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 Guarantor or bring actions,
suits or proceedings against the Guarantor in such other jurisdictions, and in
such manner, as may be permitted by applicable law. The Guarantor 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 or the Guarantees brought in the United States federal courts
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.
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<PAGE> 39
(c) The provisions of this Section 16 shall survive any termination of
this Agreement, in whole or in part.
If the foregoing is in accordance with the Agent's understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement among the
Agent and the Company and the Guarantor in accordance with its terms.
Very truly yours,
BANPONCE FINANCIAL CORP.
By: /s/ David H. Chafey, Jr.
-----------------------------------------
Name: David H. Chafey, Jr.
Title: Executive Vice President
BANPONCE CORPORATION
By: /s/ David H. Chafey, Jr.
-----------------------------------------
Name: David H. Chafey, Jr.
Title: Executive Vice President
Accepted:
MERRILL LYNCH, PIERCE, FENNER & SMITH
By: /s/ Patrick Hannon
-----------------------------------
Name: Patrick Hannon
Title: Director
Accepted:
THE FIRST BOSTON CORPORATION
55 East 52nd Street
New York, New York 10055
By: /s/ Constance M. Kassouf
-----------------------------------
Name: Constance M. Kassouf
Title: Vice President
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<PAGE> 40
AMENDMENT NO. 1 TO DISTRIBUTION AGREEMENT
December 2, 1993
Reference is made to a Distribution Agreement, dated October 11, 1991
(the "Distribution Agreement"), among BanPonce Financial Corp. (the "Company"),
BanPonce Corporation (the "Guarantor") and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and CS First Boston Corporation (each, an "Agent and collectively,
the "Agents") relating to the issue and sale by the Company of its Medium-Term
Notes. The Company, the Corporation and each of the Agents hereby agree to amend
said Distribution Agreement by inserting the following at the end of Section
1(a) thereof:
It is understood that if from time to time the Company is approached by
a prospective agent offering to solicit a specific purchase of Notes,
the Company may engage such agent with respect to such specific
purchase, provided that (i) such agent is engaged on terms
substantially similar (including the same commission schedule as set
forth hereto as Schedule A) to the applicable terms of this Agreement
and (ii) each Agent is given notice of such purchase promptly,
including the terms thereof and a copy of the agreement setting forth
the terms of engagement of such agent by the Company, in each case
after the purchase is agreed to.
Except as otherwise expressly provided herein, the Distribution
Agreement is in all respects ratified and confirmed, and all the terms,
provisions and conditions thereof shall be and remain in full force and effect.
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By: /s/ Jose-Luis Lopez-Calderon
-------------------------------------
BANPONCE CORPORATION
By: /s/ Jose-Luis Lopez-Calderon
-------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
CS FIRST BOSTON CORPORATION
By:
-------------------------------------
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<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By:
-------------------------------------
BANPONCE CORPORATION
By:
-------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/
-------------------------------------
CS FIRST BOSTON CORPORATION
By:
-------------------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.
By:
-------------------------------------
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<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By:
-------------------------------------
BANPONCE CORPORATION
By:
-------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
CS FIRST BOSTON CORPORATION
By: /s/ Martha Bailey
-------------------------------------
Vice President
FIRST CHICAGO CAPITAL MARKETS, INC.
By:
-------------------------------------
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<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Distribution Agreement to be executed on their behalf as of the day and
year first above written.
BANPONCE FINANCIAL CORP.
By:
-------------------------------------
BANPONCE CORPORATION
By:
-------------------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
CS FIRST BOSTON CORPORATION
By:
-------------------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.
By:/s/ Kimberley D. Shipla
-------------------------------------
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<PAGE> 45
EXHIBIT A
The following terms, if applicable, shall be agreed to by the Agent and
the Company and the Guarantor pursuant to each Terms Agreement:
Principal Amount: $___________
(or principal amount of foreign currency or
currency unit)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Not:
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.
<PAGE> 46
SCHEDULE A
As compensation for the services of the Agent hereunder, the Company
shall pay the Agent, 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> 47
AMENDMENT NO. 3 TO DISTRIBUTION AGREEMENT
May 23, 1997
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 Amendment No. 2 thereto, dated October 6,
1995, and as supplemented on June 16, 1993, August 1, 1994 and on the date
hereof (the "Distribution Agreement"), among Popular North America, Inc. (the
"Company") (formerly BanPonce Financial Corp.), Popular, Inc. (the "Guarantor")
(formerly BanPonce Corporation) and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Chase Securities Inc., Credit Suisse 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 (the "Notes"); and
WHEREAS, the Company, the Guarantor and each of the Agents wish to
amend the Distribution Agreement to reflect the presumption that the Agents
will purchase the Notes as principal and that the Agents will act as agents of
the Company in soliciting offers to purchase Notes only when agreed upon by the
Company and the applicable Agent;
NOW, THEREFORE, the Company, the Guarantor and each of the Agents
hereby agree to amend the Distribution Agreement as follows:
1. Section 1(c) of the Distribution Agreement is hereby amended to
read as follows:
(c) Purchases as Principal; Solicitations as Agent. The Agents
shall not have any obligation to purchase Notes from the Company as
principal. However, absent an agreement between an Agent and the
Company that such Agent shall be acting solely as an agent for the
Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such
Agent. Accordingly, the Agents, individually or in a syndicate, may
agree from time to time to purchase Notes from the Company as
principal for resale to investors and other purchasers determined by
such Agents. Any purchase of Notes from the Company by an Agent as
principal shall be made in accordance with Section 3(b) hereof. If
agreed upon between an Agent and the Company, such Agent, acting
solely as an agent for the Company and not as principal, will solicit
offers for the purchase of Notes. Such Agent shall make reasonable
efforts to assist the Company in obtaining performance by each
purchaser whose offer for the purchase of Notes has
<PAGE> 48
been solicited by it on an agency basis and accepted by the Company.
Such Agent shall not have any liability to the Company in the event
that 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.
2. The first paragraph of Section 3(a) of the Distribution
Agreement is hereby amended to read as follows:
On the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, when agreed
upon by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers to purchase
the Notes upon the terms and conditions set forth herein and in the
Prospectus.
3. 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.
2
<PAGE> 49
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
3 to the Distribution Agreement to be executed on their behalf as of the day
and year first above written.
POPULAR NORTH AMERICA, INC.
By: /s/ Jorge A. Junquera
-------------------------------------
POPULAR, INC.
By: /s/ Jorge A. Junquera
-------------------------------------
Accepted:
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: /s/ Richard N. Doyle
-------------------------
CHASE SECURITIES INC.
By: /s/ Susan Mangan-Dunn
-------------------------
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Michael E. Martin
-------------------------
FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ John Roche
-------------------------
3
<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.
POPULAR, INC.
MEDIUM-TERM FIXED RATE NOTE, SERIES 3
<PAGE> 2
<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)
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>
POPULAR, INC., 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
-2-
<PAGE> 3
Maturity, until the principal sum hereof has been paid or duly provided for.
The first payment of interest on a Note originally issued between a Regular
Record Date and an Interest Payment Date will be due and payable on the
Interest Payment Date following the next succeeding Regular Record Date to the
Holder on such next succeeding Regular Record Date. The interest so payable on
any Interest Payment Date will be paid to the Holder at the close of business
on the Regular Record Date (specified above) next preceding such Interest
Payment Date and interest payable at Maturity will be paid to the Person to
whom said principal sum is payable. Any such interest not so punctually paid or
duly provided for ("Defaulted Interest") will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Note (or one or more predecessor Notes) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee referred to on the reverse hereof, notice
whereof shall be given to the Holder of this Note not less than 10 days prior
to such Special Record Date, or be paid at any time in any other lawful manner,
all as more fully provided in the Indenture (as defined on the reverse hereof).
Payment of interest on this Note due on any Interest Payment Date
(other than interest on this Note due to the Holder hereof at Maturity) shall
be paid by check mailed to the Person entitled thereto at his last address as
it appears on the Security Register or, if a Depository with 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,
-3-
<PAGE> 4
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.
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,POPULAR, INC. 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:
POPULAR, INC.
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
POPULAR, INC.
MEDIUM-TERM FIXED RATE NOTE, SERIES 3
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, as supplemented by the First Supplemental Indenture,
dated as of May 8, 1997 (together, 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 3 (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 May 22, 1997, relating to debt securities
and preferred stock of the Company, Popular International Bank, Inc. and
Popular North America, Inc.) 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.
-6-
<PAGE> 7
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 (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
-7-
<PAGE> 8
are to be redeemed, the Company may select, from Notes that are subject to
redemption pursuant to the terms thereof, the Note or Notes, or portion or
portions thereof, to be redeemed. On and after the date, if any, from which
this Note may be redeemed, this Note may be redeemed in whole or in part, at
the option of the Company at a redemption price equal to the product of the
principal amount of this Note to be redeemed multiplied by the Redemption
Percentage, together with accrued interest, if any, to the date fixed for
redemption. The Redemption Percentage shall initially equal the Initial
Redemption Percentage specified on the face of this Note, and shall decline at
each anniversary of the initial date that this Note is redeemable by the amount
of the Annual Redemption Percentage Reduction specified on the face of this
Note, until the Redemption Percentage is equal to 100%.
If so provided on the face of this Note, this Note will be repayable in
whole or in part in increments of $1,000, provided that the remaining principal
amount of any Note surrendered for partial repayment shall be at least $1,000,
on any Business Day on or after the "Initial Date on 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
-8-
<PAGE> 9
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 (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
-9-
<PAGE> 10
Note at the office or agency of the Company maintained for such purpose in
the Borough of Manhattan, The City of New York, a new Note or Notes in
authorized denominations for an equal aggregate principal amount and like tenor
will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture and to the limitations described below if
applicable, without charge except for any tax or other governmental charge
imposed in connection therewith.
If this Note is a Global Note (as specified on the face hereof), this
Note is exchangeable only if (x) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for this Global Note or if at any
time the Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (y) the Company in its sole
discretion determines that this Global Note shall be exchangeable for
definitive Notes in registered form or (z) an Event of Default, or an event
which with notice or lapse of time or both would become an Event of Default,
with respect to the Notes represented hereby has occurred and is continuing.
If this Note is exchangeable pursuant to the preceding sentence, it shall be
exchangeable for definitive Notes in registered form, bearing interest (if any)
at the same rate or pursuant to the same formula, having the same date of
issuance, redemption provisions, if any, Maturity Date and other terms and of
differing denominations aggregating a like amount.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the places, at the respective times, at the rate and in the currency herein
prescribed.
The Company, the 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
-10-
<PAGE> 11
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.
-11-
<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.
-12-
<PAGE> 13
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):
- ------------------------
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.
-13-
<PAGE> 14
___________
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT--________Custodian _____
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common
-----------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
Please Insert Social Security or
Other Identifying Number of Assignee
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
the within Note of POPULAR, INC. 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.
-14-
<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.
POPULAR, INC.
MEDIUM-TERM FLOATING RATE NOTE, SERIES 3
<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
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
MATURITY INDEX: PERIOD:
MAXIMUM INTEREST RATE:
Depository:
INITIAL DATE ON WHICH THE SPREAD MULTIPLIER:
NOTE IS REPAYABLE AT THE (Only applicable if this Note
OPTION OF THE HOLDER: ANNUAL REDEMPTION is a Global Note)
PERCENTAGE REDUCTION:
INTEREST PAYMENT DATES:
MINIMUM INTEREST RATE:
INTEREST CALCULATION DATES:
(If other than ten calendar CALCULATION AGENT:
days after the Interest
Determination Date)
OTHER PROVISIONS:
</TABLE>
POPULAR, INC., 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
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<PAGE> 3
Rate Per Annum for Certificate of Deposit Rate Notes", "Determination of
Interest Rate Per Annum for Commercial Paper Rate Notes", "Determination of
Interest Rate Per Annum for CMT Rate", "Determination of Interest Rate Per Annum
for Eleventh District Cost of Funds Rate Notes", "Determination of Interest Rate
Per Annum for Federal Funds Rate Notes", "Determination of Interest Rate Per
Annum for LIBOR Notes", "Determination of Interest Rate Per Annum for Prime Rate
Notes" or "Determination of Interest Rate Per Annum for Treasury Rate Notes",
depending upon whether the Interest Rate Basis specified above is Certificate of
Deposit Rate, Commercial Paper Rate, CMT Rate, Eleventh District Cost of Funds
Rate, Federal Funds Rate, LIBOR, Prime Rate or Treasury Rate; provided, however,
that if any Interest Payment Date specified above would otherwise fall on a day
that is not a Business Day (as defined herein), such Interest Payment Date will
be the next succeeding Business Day, except that in the event that the Interest
Rate Basis for this Note is LIBOR, if such day falls in the next calendar month,
such Interest Payment Date will be the next preceding day that is a Business
Day. Interest on this Note shall accrue (a) if the rate at which interest on
this Note is payable shall be adjusted monthly, quarterly, semi-annually or
annually, as specified above 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
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<PAGE> 4
on this Note shall accrue from such Interest Payment Date unless the rate at
which interest on this Note is payable shall be adjusted daily or weekly, as
provided above under "Interest Rate Reset Period" and as determined in
accordance with the provisions on the reverse hereof, in which case interest on
this Note shall accrue from such Regular Record Date, or, in either case, if no
interest has been paid on this Note, from the Original Issue Date specified
above. The interest so payable on any Interest Payment Date will be paid to the
Holder at the close of business on the Regular Record Date next preceding such
Interest Payment Date, and interest payable at Maturity will be paid to the
Person to whom said principal sum is payable; provided, however, that the first
payment of interest on a Note originally issued between a Regular Record Date
and an Interest Payment Date will be made on the Interest Payment Date following
the next succeeding Regular Record Date to the Holder on such next succeeding
Regular Record Date. Any such interest not so punctually paid or duly provided
for ("Defaulted Interest") will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee referred to on the reverse hereof, notice whereof shall be given
to the Holder of this Note not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner, all as more fully
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
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<PAGE> 5
mailed to the Person entitled thereto at his last address as it appears on
the Security Register or, if a Depository with respect to this Note is specified
above or if $10,000,000 aggregate principal amount of Notes of this series with
the Interest Payment Dates specified above are registered in the name of the
Holder hereof, in immediately available funds by wire transfer to such account
as may have been appropriately designated by the Person entitled thereto as set
forth herein in time for the Paying Agent to make such payment in such funds in
accordance with its normal procedures. Payment of the principal of, and any
premium and interest on this Note due to the Holder hereof at Maturity shall be
made in immediately available funds upon presentation of this Note at the office
or agency of the Paying Agent in the Borough of Manhattan, The City of New York,
provided that this Note is presented for surrender in time for the Paying Agent
to make such payment in such funds in accordance with its normal procedures.
Any such designation for wire transfer purposes shall be made by filing
the appropriate information with the Paying Agent at its Corporate Trust Office
or agency in the Borough of Manhattan, The City of New York and, unless revoked
by written notice to the Paying Agent received on or prior to the Regular Record
Date immediately preceding the applicable Interest Payment Date or the fifteenth
day preceding Maturity, shall remain in effect with respect to any further
payments with respect to this Note payable to such Holder.
If any Interest Payment Date with respect to this Note would otherwise
fall on a day that is not a Business Day such Interest Payment Date shall be
postponed to the next day that is a Business Day 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.
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<PAGE> 6
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> 7
IN WITNESS WHEREOF,POPULAR, INC. 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:
POPULAR, INC.
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> 8
POPULAR, INC.
MEDIUM-TERM FLOATING RATE NOTE, SERIES 3
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, as supplemented by the First Supplemental Indenture, dated
as of May 8, 1997 (together, 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 3 (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 May
22, 1997, relating to debt securities and preferred stock of the Company,
Popular International Bank, Inc. and Popular North America, Inc.) 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.
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<PAGE> 9
The interest rate in effect from the date of issue to the first Interest
Reset Date shall be the Initial Interest Rate specified on the face hereof.
Commencing with the first Interest Reset Date following the Original Issue Date
specified on the face hereof, the rate at which interest on this Note is payable
shall be adjusted daily, weekly, monthly, quarterly, semi-annually or annually
as specified on the face hereof under "Interest Rate Reset Period". Each such
adjusted rate shall be applicable from and including the Interest Reset Date to
which it relates but not including the next succeeding Interest Reset Date or
until Maturity, as the case may be. Subject to applicable provisions of law and
except as specified herein, on each 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
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<PAGE> 10
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 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
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<PAGE> 11
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 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
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<PAGE> 12
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 hereof, and/or by multiplication by the Spread Multiplier,
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<PAGE> 13
if any, specified on the face hereof and calculated to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upwards; provided, however, that if fewer than three
dealers selected as aforesaid by the Calculation Agent are quoting rates as
described above, the interest rate per annum hereon with respect to such
Interest Determination Date shall be the Commercial Paper Rate in effect hereon
on such Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = 100 x 360 x D
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal calculated to seven decimal places,
without rounding; and "M" refers to the actual number of days in the interest
period for which interest is being calculated.
Determination of Interest Rate Per Annum for CMT Rate Notes. If the
Interest Rate Basis specified on the face hereof is CMT Rate, the Interest Rate
per annum determined with respect to any Interest Determination Date shall equal
the rate displayed on the Designated CMT Telerate Page (as defined herein) under
the caption "...Treasury Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined herein) for (i) if the Designated CMT Telerate Page
is 7055, the rate on such Interest Determination Date and (ii) if the Designated
CMT Telerate Page is 7052, the week, or the month, as applicable, ended
immediately preceding the week in which the related Interest Determination Date
occurs. If such rate is no longer displayed on the relevant page, or if not
displayed by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate for such Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index as
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<PAGE> 14
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
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<PAGE> 15
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 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
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<PAGE> 16
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 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)
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<PAGE> 17
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
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<PAGE> 18
having the Index Maturity specified on the face hereof, commencing on the
second London Banking Day immediately following such LIBOR Interest
Determination Date, that appear on the Reuters Screen LIBO Page as of 11:00
A.M., London time, on such LIBOR Interest Determination Date, if at least two
such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or
(b) the rate for deposits in U.S. dollars having the Index Maturity specified on
the face hereof, commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date, that appears on Telerate Page
3750 as of 11:00 A.M., London time, on such LIBOR Interest Determination Date
("LIBOR Telerate"). "Reuters Screen LIBO Page" means the display designated as
page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as
may replace page LIBO on that service for the purpose of displaying London
interbank offered rates of major banks). "Telerate Page 3750" means the display
designated as page "3750" on the Telerate Service (or such other page as may
replace the 3750 page on that service or such other service or services as may
be nominated by the British Bankers' Association for the purpose of displaying
London interbank offered rates for U.S. dollar deposits). If neither LIBOR
Reuters nor LIBOR Telerate is specified above, LIBOR will be determined if LIBOR
Telerate had been specified. If LIBOR Reuters is specified above and at least
two such offered rates appear on the Reuters Screen LIBO Page, the rate in
respect of such LIBOR Interest Determination Date will be the arithmetic mean of
such offered rates as determined by the Calculation Agent. If fewer than two
offered rates appear on the Reuters Screen LIBO Page, or if no rate appears on
Telerate Page 3750, as applicable, LIBOR in respect of such LIBOR Interest
Determination Date will be determined as if the parties had specified the rate
described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates for the applicable Index Maturity appear on the Reuters
Screen LIBO Page, as specified in (i)(a) above, or on which no rate appears on
Telerate Page 3750, as specified in (i)(b) above, as applicable, LIBOR will be
determined on the basis of the rates at which deposits in U.S. dollars having
the Index Maturity specified above are offered at approximately 11:00 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
-18-
<PAGE> 19
to an amount of not less than U.S. $1 million that is representative for a
single transaction in such market at such time. The Calculation Agent will
request the principal London office of each of the Reference Banks to provide a
quotation of its rates. If at least two such quotations are provided, LIBOR for
such LIBOR Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR for such LIBOR
Interest Determination Date will be the arithmetic mean of the rates quoted by
11:00 A.M., New York City time, on such LIBOR Interest Determination Date by
three major banks in The City of New York selected by the Calculation Agent for
loans in U.S. dollars to leading European banks, having the Index Maturity
specified in the applicable Pricing Supplement, commencing on the second London
Banking Day immediately following such LIBOR Interest Determination Date and in
a principal amount equal to an amount of not less than U.S. $1 million that is
representative for a single transaction in such market at such time; provided,
however, that if the banks selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, LIBOR will be LIBOR in effect on such
LIBOR Interest Determination Date.
Determination of Interest Rate Per Annum for Prime Rate Notes. If the
Interest Rate Basis specified on the face hereof is Prime Rate, Prime Rate
determined with respect to any Interest Determination Date shall equal the rate
adjusted by the addition or subtraction of the spread, if any, specified on the
face hereof, and/or by multiplication by the Spread Multiplier, if any,
specified on the face hereof and calculated to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upwards, set forth in H.15(519) for such date opposite
the caption "Bank Prime Loan." If such rate is not yet published by 3:00 P.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 USPRIME1 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
-19-
<PAGE> 20
USPRIME1 Page on such Prime Rate Interest Determination Date, or, if fewer
than four such rates appear on the Reuters Screen USPRIME1 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 a 360-day year as of the close of business on such Prime Rate Interest
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent from which quotations are requested. If fewer
than four quotations are provided, the Prime Rate shall be calculated by the
Calculation Agent and shall be determined as the arithmetic mean of four prime
rates quoted on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on such Prime Rate Interest
Determination Date as furnished in The City of New York on such date by the
major money center banks, if any, that have provided such quotations and by a
reasonable number of substitute banks or trust companies to obtain four such
prime rate quotations, provided such substitute banks or trust companies are
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 USPRIME1 Page" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rates Service (or such other page as may
replace page USPRIME1 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
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<PAGE> 21
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 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
-21-
<PAGE> 22
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 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
-22-
<PAGE> 23
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
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<PAGE> 24
indicated on the face hereof; provided, however, that the first two
paragraphs of Section 1103 of the Indenture shall not apply to this Note, and
if less than all of the Notes are to be redeemed, the Company may select, from
Notes that are subject to redemption pursuant to the terms thereof, the Note or
Notes, or portion or portions thereof, to be redeemed. On and after the date,
if any, from which this Note may be redeemed, this Note may be redeemed in
whole or in part, at the option of the Company at a redemption price equal to
the product of the principal amount of this Note to be redeemed multiplied by
the Redemption Percentage together with accrued interest to the date fixed for
redemption. The Redemption Percentage shall initially equal the Initial
Redemption Percentage specified on the face of this Note, and shall decline at
each anniversary of the initial date that this Note is redeemable by the amount
of the Annual Redemption Percentage Reduction specified on the face of this
Note, until the Redemption Percentage is equal to 100%.
If so provided on the face of this Note, this Note will be repayable in
whole or in part in increments of $1,000, provided that the remaining principal
amount of any Note surrendered for partial repayment shall be at least $1,000,
on any Business Day on or after the "Initial Date on which the Note is
Repayable at the Option of the Holder" (as stated on the face hereof), at the
option of the Holder, at 100% of the face amount hereof, plus accrued interest,
if any, to the repayment date. In order for the exercise of the option to be
effective and the Notes to be repaid, the Company must receive at the
applicable address of the Paying Agent set forth below or at such other place
or places of which the Company shall from time to time notify the Holder of
this Note, on or before the thirtieth, but not earlier than the sixtieth day,
or, if such day is not a Business Day, the next succeeding Business Day, prior
to the repayment date, either (i) this Note, with the form below entitled
"Option to Elect Repayment" duly completed, or (ii) a telegram, telex,
facsimile transmission, or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc., or a
commercial bank or a trust company in the United States of America setting
forth (a) the name, address and telephone
-24-
<PAGE> 25
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 that this Global Note shall be exchangeable for
definitive Notes in registered form or (z) an Event of Default, or an
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<PAGE> 26
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 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.
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<PAGE> 27
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
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<PAGE> 28
(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): _______________
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> 29
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- ______ Custodian _______
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common ----------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
Please Insert Social Security or
Other Identifying Number of Assignee
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
the within Note of POPULAR, INC. 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(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.
POPULAR NORTH AMERICA, INC.
MEDIUM-TERM FIXED RATE NOTE, SERIES D
Payment of Principal, Premium, if any, and Interest
Guaranteed by
POPULAR, INC.
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: INITIAL DATE ON PRINCIPAL AMOUNT
WHICH THE 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>
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)
</TABLE>
OTHER PROVISIONS:
POPULAR NORTH AMERICA, INC., 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
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<PAGE> 3
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
institutions in such location are authorized or obligated by law or executive
order to close.
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<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, POPULAR NORTH AMERICA, INC. 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:
POPULAR NORTH AMERICA, INC.
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
POPULAR NORTH AMERICA, INC.
MEDIUM-TERM FIXED RATE NOTE, SERIES D
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 Popular, Inc.
(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, and the Second
Supplemental Indenture, dated as of May 8, 1997 (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 D (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 May 22, 1997, relating to debt securities
and preferred stock of the Company, Popular International Bank, Inc. and the
Guarantor) 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
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<PAGE> 7
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 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
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<PAGE> 8
principal of this Note which may be declared due and payable in the manner,
with the effect and subject to the conditions provided in the Indenture, shall
be determined in the manner set forth under "OID Default Amount" on the face
hereof, and (ii) in the case of a default of payment in principal upon
acceleration, redemption, repayment at the option of the Holder or at the
Maturity Date hereof, in lieu of any interest otherwise payable, the overdue
principal of this Note shall bear interest at a rate of interest per annum
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
-8-
<PAGE> 9
the obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the places, at the respective times,
at the rate and in the currency herein prescribed.
The Company, the Guarantor, the Trustee and any paying agent may deem
and treat the Holder hereof as the absolute owner of this Note at such Holder's
address as it appears on the Security Register as kept by the Trustee or 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
POPULAR, INC.
Popular, Inc. (the "Guarantor") hereby unconditionally
guarantees to the Holder of this Security duly authenticated and delivered by
the Trustee, the due and punctual payment of the principal, and premium, if
any, of (including any amount in respect of original issue discount), and
interest, if any (together with any Additional Amounts payable pursuant to the
terms of this Security), on this Security and the due and punctual payment of
the sinking fund payments, if any, and analogous obligations, if any, provided
for pursuant to the terms of this Security, when and as the same shall become
due and payable, whether at Stated Maturity or upon redemption, repayment or
upon declaration of acceleration or otherwise according to the terms of this
Security and of the Indenture. In case of default by the Company in the
payment of any such principal (including any amount in respect of original
issue discount), any premium or interest (together with any Additional Amounts
payable pursuant to the terms of this Security), sinking fund payment, or
analogous obligation, the Guarantor agrees duly and punctually to pay the same.
The Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional
irrespective of any extension of the time for payment of this Security, any
modification of this Security, any invalidity, irregularity or unenforceability
of this Security or the Indenture, any failure to enforce the same or any
waiver, modification, consent or indulgence granted to the Company with respect
thereto by the Holder of this Security or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of
a surety or guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a demand or proceeding first
against the Company, protest or notice with respect to this Security or the
indebtedness evidenced thereby and all demands whatsoever, and covenants that
this guarantee will not be discharged as to this Security except by payment in
full of the principal of (including any amount payable in respect of original
issue discount), and any premium or interest (together with any Additional
Amounts payable pursuant to the terms of this Security), thereon.
The Guarantor irrevocably waives any and all rights to which it may be
entitled, by operation of law or
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<PAGE> 11
otherwise, upon making any payment hereunder (i) to be subrogated to the rights
of a Holder against the Company with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by the Company in respect thereof or (ii)
to receive any payment, in the nature of contribution or for any other reason,
from any other obligor with respect to such payment.
This guarantee shall not be valid or become obligatory for any
purpose with respect to this Security until the certificate of authentication
on this Security shall have been signed by the Trustee.
This guarantee is governed by and construed in accordance with the laws
of the State of New York.
IN WITNESS WHEREOF, Popular, Inc. 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.
POPULAR, INC.
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:
TEN COM -- as tenants in common UNIF GIFT MIN ACT--________Custodian_______
TEN ENT -- as tenants by the (Cust) (Minor)
entireties
JT TEN -- as joint tenants with right Under Uniform Gifts to Minors Act
of survivorship and not as
tenants in common
-------------------------------
(State)
Additional abbreviations may also be used though not in the
above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
[ ]
- -------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING
POSTAL ZIP CODE OF ASSIGNEE
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
the within Note of POPULAR NORTH AMERICA, INC. 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.
POPULAR NORTH AMERICA, INC.
MEDIUM-TERM FLOATING RATE NOTE, SERIES D
Payment of Principal, Premium, if any, and Interest
Guaranteed by
POPULAR, INC.
<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
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
OPTION OF THE HOLDER: ANNUAL REDEMPTION is a Global Note)
PERCENTAGE REDUCTION:
INTEREST PAYMENT DATES:
MINIMUM INTEREST RATE:
INTEREST CALCULATION DATES:
(If other than ten calendar CALCULATION AGENT:
days after the Interest
Determination Date)
OTHER PROVISIONS:
</TABLE>
POPULAR NORTH AMERICA, INC., 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
-2-
<PAGE> 3
Rate, Eleventh District Cost of Funds Rate, Federal Funds Rate, LIBOR, Prime
Rate or Treasury Rate; provided, however, that if any Interest Payment Date
specified above would otherwise fall on a day that is not a Business Day (as
defined herein), such Interest Payment Date will be the next succeeding
Business Day, except that in the event that the Interest Rate Basis for this
Note is LIBOR, if such day falls in the next calendar month, such Interest
Payment Date will be the next preceding day that is a Business Day. Interest
on this Note shall accrue (a) if the rate at which interest on this Note is
payable shall be adjusted monthly, quarterly, semi-annually or annually, as
specified above 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
-3-
<PAGE> 4
punctually paid or duly provided for ("Defaulted Interest") will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee referred to on the
reverse hereof, notice whereof shall be given to the Holder of this Note not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner, all as more fully provided in the Indenture (as
defined on the reverse hereof). "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
-4-
<PAGE> 5
any further payments with respect to this Note payable to such Holder.
If any Interest Payment Date with respect to this Note would
otherwise fall on a day that is not a Business Day such Interest Payment Date
shall be postponed to the next day that is a Business Day 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, POPULAR NORTH AMERICA, INC. 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:
POPULAR NORTH AMERICA, INC.
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
POPULAR NORTH AMERICA, INC.
MEDIUM-TERM FLOATING RATE NOTE, SERIES D
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 Popular, Inc.
(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, and the Second
Supplemental Indenture, dated as of May 8, 1997 (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 D (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 May 22, 1997, relating to debt securities
and preferred stock of the Company, Popular International Bank, Inc. and the
Guarantor) 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
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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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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
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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 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
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<PAGE> 11
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 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
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<PAGE> 12
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 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
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<PAGE> 13
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 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
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<PAGE> 14
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 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
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<PAGE> 15
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 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
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<PAGE> 16
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 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
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<PAGE> 17
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 3:00 P.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 USPRIME1 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 USPRIME1 Page on such Prime Rate Interest
Determination Date, or, if fewer than four such rates appear on the Reuters
Screen USPRIME1 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 a 360-day year as of the close of
business on such Prime Rate Interest Determination Date by four major money
center banks in The City of New York selected by the Calculation Agent from
which quotations are requested. If fewer than four quotations are provided,
the Prime Rate shall be calculated by the Calculation Agent and shall be
determined as the arithmetic mean of four prime rates quoted on the basis of
the actual number of days in the year divided by a 360-day year as of the close
of business on such Prime Rate Interest Determination Date as furnished in The
City of New York on such date by the major money center banks, if any, that
have provided such quotations and by a reasonable number of substitute banks or
trust companies to obtain four such prime rate quotations, provided such
substitute banks or trust companies are 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
USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters
Monitor Money Rates Service (or such other page as may replace page USPRIME1 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
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<PAGE> 18
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 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
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<PAGE> 19
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 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.
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<PAGE> 20
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the Guarantor and the rights of the Holders of
the Debt Securities of each series to be affected under the Indenture at any
time by the Company, the Guarantor and the Trustee with the consent of the
Holders of not less than a majority in principal amount of the Debt Securities
at the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Debt Securities of each series at the time Outstanding,
on behalf of the Holders of all Debt Securities of such series, to waive
compliance by the Company and the Guarantor with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.
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%.
-20-
<PAGE> 21
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 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
-21-
<PAGE> 22
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 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
POPULAR, INC.
Popular, Inc. (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, Popular, Inc. 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.
POPULAR, INC.
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
--------------------
<TABLE>
<S> <C>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- Custodian
TEN ENT -- as tenants by the entireties ------- ------------
JT TEN -- as joint tenants with right (Cust) (Minor)
of survivorship and not as Under Uniform Gifts to Minors Act
tenants in common
----------------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
Please Insert Social Security or
Other Identifying Number of Assignee
-----------------------------------
-----------------------------------
- ----------------------------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
the within Note of POPULAR NORTH AMERICA, INC. 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.
</TABLE>
-27-
<PAGE> 1
Exhibit 8(a)
May 23, 1997
Popular, Inc.,
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 3 (the "Notes") of Popular, Inc.,
and hereby confirm to you our opinion as set forth under the heading "United
States Taxation" in the Prospectus Supplement, dated May 23, 1997, relating to
the Notes.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an exhibit to Registration Statement No. 333-26941
and the reference to us in the above-mentioned Prospectus Supplement under the
heading "United States Taxation". In giving such
<PAGE> 2
Popular, Inc. -2-
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(b)
May 23, 1997
Popular, Inc.,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Popular North America, Inc.,
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 D (the "Notes") of Popular North America, Inc. and
the related guarantees thereof (the "Guarantees") by Popular, Inc., and hereby
confirm to you our opinion as set forth under the heading "United States
Taxation" in the Prospectus Supplement, dated May 23, 1997, relating to the
notes and guarantees.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an
<PAGE> 2
Popular, Inc. -2-
Popular North America, Inc.
Exhibit to Registration Statement No. 333-26941 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)
May 23, 1997
Popular, Inc.
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 3 (the "Notes") of Popular, Inc., and hereby
confirm to you our opinion as set forth under the heading "United States
Taxation" in the Prospectus Supplement, dated May 23, 1997, relating to the
Notes.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an exhibit to Registration Statement No. 333-26941
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/ MC CONNELL VALDES
<PAGE> 1
EXHIBIT 10(a)
POPULAR, INC.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(DATED AS OF MAY 23, 1997)
Medium-Term Notes (collectively, the "Notes") in the aggregate
principal amount of up to $1,000,000,000 are to be offered on a continuous basis
by Popular, Inc. (the "Company") through Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Credit Suisse First
Boston Corporation ("Credit Suisse First Boston"), Chase Securities Inc. ("Chase
Securities") and First Chicago Capital Markets, Inc. ("First Chicago") who, as
agents (each an "Agent"), have agreed to use their reasonable efforts to solicit
offers to purchase the Notes from the Company. The Agents also may purchase
Notes as principal for resale.
The Notes are being sold pursuant to a Distribution Agreement between
the Company and the Agents, dated May 23, 1997 (the "Distribution Agreement").
The Notes will be issued pursuant to the Indenture , dated as of February 15,
1995, as supplemented by the First Supplemental Indenture, dated as of May 8,
1997 (together, the "Indenture") each between the Company and The First National
Bank of Chicago, as trustee (the "Trustee"). A Registration Statement (the
"Registration Statement", which term shall include any additional registration
statements filed in connection with the Notes as provided in the Distribution
Agreement) with respect to the Notes has been filed with the Securities and
Exchange Commission (the "Commission"). The most recent base Prospectus included
in the Registration Statement, as supplemented with respect to the Notes, is
herein referred to as the "Prospectus." The most recent supplement to the
Prospectus with respect to the specific terms of the Notes is herein referred to
as the "Pricing Supplement."
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered to
the appropriate Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated form
(each, a "Certificated Note") delivered to the purchaser thereof
<PAGE> 2
or a person designated by such purchaser. Owners of beneficial interests in
Book-Entry Notes will be entitled to physical delivery of Certificated Notes
equal in principal amount to their respective beneficial interests only upon
certain limited circumstances described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in Part III hereof.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date of
its authentication by the Trustee or its
duly appointed authenticating agent. Each
Note shall also bear an original issue date
(the "Original Issue Date"). The Original
Issue Date shall remain the same for all
Notes subsequently issued upon transfer,
exchange or substitution of an original Note
regardless of their dates of authentication.
Maturities: Each Note will mature on a date selected by
the purchaser and agreed to by the Company
which is not less than nine months nor more
than thirty years from its Original Issue
Date; provided, however, that Notes bearing
interest at rates determined by reference to
selected indices ("Floating Rate Notes")
will mature on an Interest Payment Date.
-2-
<PAGE> 3
Currencies: Each Note shall be denominated in one
of the currencies or currency units,
as specified in the relevant Pricing
Supplement, or in such other currency or
currency unit as may be agreed from time to
time between the Company and each Agent and
as specified in the relevant Pricing
Supplement, or, if no currency or currency
unit is specified therein, in U.S. dollars.
Notes denominated in one or more currencies
or currency units other than in U.S. dollars
are herein referred to as "Multi-Currency
Notes." Notes that have the amount of
principal payments determined by reference
to an index currency are herein referred to
as "Indexed Notes."
Denominations: The Notes will be issued in denominations
of $1,000 and integral multiples thereof.
Any Notes denominated other than in U.S.
dollars will be issuable in denominations
as set forth in the relevant Multi-Currency
and Indexed Note Prospectus Supplement. For
special provisions relating to
Multi-Currency Notes and Indexed Notes, see
the related Multi-Currency and Indexed Note
Supplement.
Registration: Notes will be issued only in fully
registered form.
Redemption/Repayment: The Notes will be subject to repayment at
the option of the Holders thereof in
accordance with the
-3-
<PAGE> 4
terms of the Notes on their respective
Optional Repayment Dates, if any. Optional
Repayment Dates, if any, will be fixed at
the time of sale and set forth in the
applicable Pricing Supplement and in the
applicable Note. If no Optional Repayment
Dates are indicated with respect to a Note,
such Note will not be repayable at the
option of the Holder prior to Maturity.
The Notes will be subject to redemption by
the Company on and after their respective
Initial Redemption Dates, if any. Initial
Redemption Dates, if any, will be fixed at
the time of sale and set forth in the
applicable Pricing Supplement and in the
applicable Note. If no Initial Redemption
Dates are indicated with respect to a Note,
such Note will not be redeemable prior to
Maturity.
Calculation of
Interest:
In the case of Fixed Rate Notes, interest
(including payments for partial periods)
will be calculated and paid on the basis of
a 360-day year of twelve 30-day months. In
the case of Floating Rate Notes, interest
will be calculated and paid on the basis of
the actual number of days in the interest
period divided by 360 with the exception of
Treasury Rate Notes for which interest will
be calculated on the basis of the actual
number of days in the interest
-4-
<PAGE> 5
period divided by the actual number of days
in the year. If an Interest Payment Date
with respect to any Fixed Rate Note falls on
a day that is not a Business Day (as
hereinafter defined), the payment of
interest required to be made on such
Interest Payment Date need not be made on
such day, but may be made on the next
succeeding Business Day with the same force
and effect as if made on such Interest
Payment Date and no interest shall accrue on
such payment for the period from and after
such Interest Payment Date. If an Interest
Payment Date with respect to any Floating
Rate Note would otherwise fall on a day that
is not a Business Day, such Interest
Payment Date will be the following day that
is a Business Day, except that in the case
of a LIBOR Note, if such day falls in the
next calendar month, such Interest Payment
Date will be the preceding day that is a
Business Day. If the Stated Maturity, or
date of earlier redemption or repayment, as
the case may be, of a Note is not a Business
Day, the payment of principal and interest
due on such day shall be made on the next
succeeding Business Day and no interest
shall accrue on such payment for the period
from and after such Stated Maturity, or date
of earlier redemption or repayment. For
special provisions relating to
Multi-Currency Notes and Indexed Notes, see
the related Multi-
-5-
<PAGE> 6
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
-6-
<PAGE> 7
Prospectus Supplement to which the Pricing
Supplement relates;
4. the Price to Public (but only if
(a) the trade is being made on an agency
basis and (b) such Price to Public is other
than 100%);
5. Net Proceeds to the Company
(but only if (a) the trade is being made on
a principal basis and (b) the Net Proceeds
to the Company is other than 100%), less
what would have been the applicable agency
commission;
6. the information with respect to
the terms of the Notes set forth below
(whether or not the applicable Note is a
Book-Entry Note) under "Procedures for Notes
Issued in Book-Entry Form -- Settlement
Procedures", items 2, 3, 7, 8 and 9; and
7. any other terms of the Notes not
otherwise specified in the Prospectus or
Prospectus Supplement.
One copy of such filed document will be sent
by telecopy or over night express (for
delivery not later than 11:00 A.M. on the
Business Day next following the trade date)
to the applicable Presenting Agent at the
following addresses:
To Merrill Lynch:
-7-
<PAGE> 8
If by overnight, express or special
delivery:
Merrill Lynch & Co., Tritech
Services, 40 Colonial Drive,
Piscataway, New Jersey 08854,
Attention: Prospectus
Operations/Susan Putnam,
If by all other types of
deliveries:
Tritech Services, #4 Corporate
Place, Corporate Park 287,
Piscataway, New Jersey 08854,
Attention: Prospectus
Operations/Nachman Kimerling
Telephone: (908) 885-2769
Telecopy: (908) 885-2774/2775/2776
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation, Five World Trade
Center, New York, New York 10048,
Attention: Joan Bryan, Transaction
Advisory Group
Telephone: (212) 322-5105
Telecopy: (212) 803-4096
To Chase Securities:
Chase Securities, Inc., 270 Park
Avenue, 8th Floor, New York, New
York 10017, Attention: Medium Term
Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0237
Chicago, Illinois 60670
Attention: MTN Operations Manager
Telephone: (317) 732-9631
-8-
<PAGE> 9
The Presenting Agent will cause a stickered
supplemented Prospectus with the trade
confirmation to be delivered to the
purchaser of the Note.
-9-
<PAGE> 10
For record keeping purposes, one copy of
each Pricing Supplement shall also be mailed
or telecopied to each Agent and the Trustee
at the following respective addresses:
To Merrill Lynch:
Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith
Incorporated, World Financial
Center, North Tower, 10th Floor,
New York, New York 10281-1310,
Attention: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation, 55 East 52nd Street,
New York, New York 10055,
Attention: Short and Medium-Term
Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To Chase Securities:
Chase Securities, Inc., 270 Park
Avenue, 8th Floor, New York, New
York 10017, Attention: Medium Term
Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Fax: (312) 732-4172
-10-
<PAGE> 11
To the Trustee:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust
Administration
In each instance that a Pricing Supplement
is prepared, the Presenting Agent will affix
the Pricing Supplement to supplemented
Prospectuses prior to its use. Outdated
Pricing Supplements and the Prospectuses to
which they are attached (other than those
retained for files) will be destroyed.
Settlement: The receipt of immediately available funds
by the Company in payment for a Note and the
authentication and delivery of such Note
shall, with respect to such Note, constitute
"settlement." Offers accepted by the Company
will be settled at a time as the purchaser
and the Company shall agree and pursuant to
the timetable for settlement set forth in
Parts II and III hereof under "Settlement
Procedures" with respect to Book-Entry
Notes and Certificated Notes, respectively
(each such date fixed for settlement, a
"Settlement Date"). If procedures A and B of
the applicable Settlement Procedures with
respect to a particular offer are not
completed on or before the time set forth
under the applicable "Settlement Procedures
Timetable", such offer shall not be settled
until the Business Day
-11-
<PAGE> 12
following the completion of Settlement
Procedures A and B or such later date as the
purchaser and the Company shall agree.
In the event of a purchase of Notes by the
Presenting Agent as principal, appropriate
settlement details will be set forth in the
applicable Terms Agreement to be entered
into between the Presenting Agent and the
Company pursuant to the Distribution
Agreement.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change
the interest rate or any other variable term
on any Notes being offered by the Company,
the Company will promptly advise the Agents
and the Agents will forthwith suspend
solicitation of offers to purchase such
Notes. Each Agent will telephone the Company
with recommendations as to the changed
interest rates or other variable terms. At
such time as the Company advises the Agents
of the new interest rates or other variable
terms, the Agents may resume solicitation of
offers to purchase such Notes. Until such
time, only "indications of interest" may be
recorded. Immediately after acceptance by
the Company of an offer to purchase at a new
interest rate or new variable term, the
Company, the Agents and the Trustee shall
follow the proce-
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<PAGE> 13
dures set forth under the applicable
"Settlement Procedures."
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to
suspend solicitation of purchases at any
time. Upon receipt of such instructions, the
Agents will forthwith suspend solicitation
of offers to purchase from the Company until
such time as the Company has advised them
that solicitation of offers to purchase may
be resumed. If the Company decides to amend
the Registration Statement (including
incorporating any documents by reference
therein) or supplement any of such documents
(other than to change rates or other
variable terms), it will promptly advise the
Agents and, except in the case of an
amendment by the filing of a document
incorporated by reference in the
Registration Statement, will furnish each
Agent and its counsel with copies of the
proposed amendment or supplement. One copy
of such filed document, along with a copy of
the cover letter sent to the Commission,
will be delivered or mailed to the Agents at
the following addresses:
To Merrill Lynch:
Product Management MTNs, Merrill
Lynch Money Markets, North Tower,
World Financial Center, 10th Floor,
New York, New York 10281-1310
Telephone: (212) 449-7476
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<PAGE> 14
Telecopy: (212) 449-2234
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation, 55 East 52nd Street,
New York, New York 10055,
Attention: Short and Medium-Term
Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To Chase Securities:
Chase Securities, Inc.
270 Park Avenue, 8th Floor,
New York, New York 10017,
Attention: Medium Term Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Telecopy: (312) 732-4172
In the event that at the time the
solicitation of offers to purchase from the
Company is suspended (other than to change
interest rates or other variable terms)
there shall be any offers to purchase Notes
that have been accepted by the Company which
have not been settled, the Company will
promptly advise the Agents and the Trustee
whether such offers may be settled and
whether copies of the Prospectus as
theretofore amended and/or supplemented as
in effect at the time of the suspension may
be delivered in connection with the
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<PAGE> 15
settlement of such orders. The Company will
have the sole responsibility for such
decision and for any arrangements which may
be made in the event that the Company
determines that such orders may not be
settled or that copies of such Prospectus
may not be so delivered.
Delivery of Prospectus:
A copy of the most recent Prospectus and
Pricing Supplement must accompany or precede
the earlier of (a) the written confirmation
of a sale sent to a customer or his agent
and (b) the delivery of Notes to a customer
or his agent.
Authenticity of
Signatures: The Agents will have no obligation or
liability to the Company or the Trustee in
respect of the authenticity of the
signature of any officer, employee or agent
of the Company or the Trustee on any Note or
related Guarantee.
Documents Incorporated
by Reference: The Company shall supply each Agent with an
adequate supply of all documents
incorporated by reference in the
Registration Statement.
Business Day: "Business Day" means any day other than a
Saturday, Sunday, or other day on which
banks in The City of New York (and, with
respect to LIBOR Notes, the City of London)
are authorized or obligated by law or
executive order to close. For the definition
of "Business Day" with respect to
Multi-Currency Notes or Indexed Notes, see
the Prospectus Supplement.
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<PAGE> 16
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below,
in accordance with its obligations under a Letter of Representations from the
Company and the Trustee to DTC, dated May [22], 1997, and a Medium-Term Note
Certificate Agreement between the Trustee and DTC, dated May 26, 1989 (the
"Certificate Agreement"), and its obligations as a participant in DTC, including
DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Book-Entry Notes having the
same Original Issue Date, interest rate,
terms of redemption or repayment, if any,
and Stated Maturity (collectively, the
"Fixed Rate Terms") will be represented
initially by a single global security in
fully registered form without coupons; and
all Floating Rate Book-Entry Notes having
the same Original Issue Date, interest rate
basis or bases upon which interest may be
determined (each, an "Interest Rate Basis"),
which may be one or more of the Commercial
Paper Rate, the Treasury Rate, LIBOR, the CD
Rate, the CMT Rate, the Federal Funds Rate,
the Prime Rate, the Eleventh District Cost
of Funds Rate, any other rate set forth by
the Company, Initial Interest Rate, Index
Maturity, Spread and/or Spread Multiplier,
if any, Minimum Interest Rate, if any,
Maximum Interest Rate, if any, terms of
redemption or repayment,
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<PAGE> 17
if any, and Stated Maturity (collectively,
"Floating Rate Terms") will be represented
initially by a single Book-Entry Note.
Each Book-Entry Note will be dated and
issued as of the date of its authentication
by the Trustee or its duly appointed
authenticating agent. Each Book-Entry Note
will bear interest from a date (the
"Interest Accrual Date") which will be (a)
with respect to an original Book-Entry Note
(or any portion thereof), its Original Issue
Date and (b) with respect to any Book-Entry
Note (or portion thereof) issued
subsequently upon exchange or transfer of a
Book-Entry Note or in lieu of a destroyed,
lost or stolen Book-Entry Note, the most
recent Interest Payment Date (or, in the
case of Floating Rate Notes with interest
rates which reset daily or weekly, the day
following the most recent Record Date to
which interest has been paid or duly
provided for on the predecessor Book-Entry
Note or Notes (or if no such payment or
provision has been made, the Original Issue
Date of the predecessor Book-Entry Note or
Notes), regardless of the date of
authentication of such subsequently issued
Book-Entry Note. No Book-Entry Note shall
represent any Certificated Note.
Identification: The Agents have arranged with the CUSIP
Service Bureau (the "CUSIP Service Bureau")
of Standard &
-17-
<PAGE> 18
Poor's Corporation ("Standard & Poor's") for
the reservation of approximately 900 CUSIP
numbers for each rank of Notes which have
been reserved for future assignment to
Book-Entry Notes representing Notes issued
in book-entry form and have delivered to the
Company, the Trustee and DTC an initial
written list of such CUSIP numbers. The
Trustee will assign CUSIP numbers to
Book-Entry Notes as described below under
Settlement Procedure B. DTC will notify the
CUSIP Service Bureau periodically of the
CUSIP numbers that the Trustee has assigned
to Book-Entry Notes. The Trustee will notify
the Company at any time when fewer than 100
of the respective reserved CUSIP numbers
remain unassigned to Book-Entry Notes, and,
if it deems necessary, the Company will
reserve additional CUSIP numbers for
assignment to Book-Entry Notes representing
Notes issued in book-entry form. Upon
obtaining such additional CUSIP numbers, the
Company will deliver a list of such
additional numbers to the Trustee and DTC.
Book-Entry Notes having an aggregate
principal amount in excess of $200,000,000
and otherwise required to be represented by
the same Global Certificate will instead be
represented by two or more Global
Certificates which shall be assigned the
same CUSIP number.
Registration: Each Book-Entry Note will be registered in
the name of CEDE & CO., as nominee for DTC,
on the register
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<PAGE> 19
maintained by the Trustee under the
Indenture. The beneficial owner of a
Book-Entry Note (i.e., an owner of a
beneficial interest in a Book-Entry Note),
or one or more indirect participants in DTC
designated by such owner, will designate
one or more participants in DTC (with
respect to such Book-Entry Note, the
"Participants") to act as agent for such
beneficial owner in connection with the
book-entry system maintained by DTC, and DTC
will record in book-entry form, in
accordance with instructions provided by
such Participants, a credit balance with
respect to such Book-Entry Note in the
account of such Participants. The ownership
interest of such beneficial owner in such
Book-Entry Note will be recorded through the
records of such Participants or through the
separate records of such Participants and
one or more indirect participants in DTC.
Transfers: Transfers of beneficial interests in a
Book-Entry Note will be accomplished by
book entries made by DTC and, in turn, by
Participants (and in certain cases, one or
more indirect participants in DTC) acting
on behalf of beneficial transferors and
transferees of such Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or
more Book-Entry Notes Outstanding
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<PAGE> 20
on such date that represent Book-Entry Notes
having the same Fixed Rate Terms or Floating
Rate Terms, as the case may be, other than
Original Issue Dates, and for which interest
has been paid to the same date; (b) a date,
occurring at least 30 days after such
written notice is delivered and at least 30
days before the next Interest Payment Date
for the related Book-Entry Notes, on which
such Book-Entry Notes shall be exchanged for
a single replacement Book-Entry Note; and
(c) a new CUSIP number to be assigned to
such replacement Book-Entry Note. Upon
receipt of such a notice, DTC will send to
its Participants (including the Trustee) a
written reorganization notice to the effect
that such exchange will occur on such date.
Prior to the specified exchange date, the
Trustee will deliver to the CUSIP Service
Bureau written notice setting forth such
exchange date and the new CUSIP number and
stating that, as of such exchange date, the
CUSIP numbers of the Book-Entry Notes to be
exchanged will no longer be valid. On the
specified exchange date, the Trustee will
exchange such Book-Entry Notes for a single
Book-Entry Note bearing the new CUSIP number
and the CUSIP numbers of the exchanged
Book-Entry Notes will, in accordance with
CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned.
Not withstanding the foregoing, if the
Book-Entry Notes to be exchanged
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<PAGE> 21
exceed $200,000,000 in aggregate principal
amount, one replacement Book-Entry Note will
be authenticated and issued to represent
each $200,000,000 of principal amount of the
exchanged Book-Entry Notes and an additional
Book-Entry Note will be authenticated and
issued to represent any remaining principal
amount of such Book-Entry Notes (see
"Denominations" below).
Denominations: All Book-Entry Notes will be denominated in
U.S. dollars and will be issued in
denominations of $1,000 and integral
multiples thereof. Book-Entry Notes will be
denominated in principal amounts not in
excess of $200,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of $200,000,000
would, but for the preceding sentence, be
represented by a single Book-Entry Note,
then one Book-Entry Note will be issued to
represent each $200,000,000 principal amount
of such Note or Notes issued in book-entry
form and an additional Book-Entry Note will
be issued to represent any remaining
principal amount of such Note or Notes
issued in book-entry form. In such a case,
each of the Book-Entry Notes shall be
assigned the same CUSIP number.
Interest: General. Interest on each Note issued in
book-entry form will accrue from the
Interest Accrual Date of the Book-Entry Note
representing such Note. Each payment of
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<PAGE> 22
interest on a Book-Entry Note will include
interest accrued through the day preceding,
as the case may be, the Interest Payment
Date (provided that in the case of Floating
Rate Notes with interest rates which reset
daily or weekly interest payments will
include interest accrued to and including
the Regular Record Date immediately
preceding the Interest Payment Date), the
Stated Maturity Date, Redemption Date or
Repayment Date. Interest payable at Maturity
of a Book-Entry Note will be payable to the
Person to whom the principal of such Note is
payable. DTC will arrange for each pending
deposit message described under Settlement
Procedure C below to be transmitted to
Standard & Poor's Corporation ("S&P"), which
will use the information in the message to
include certain terms of the related
Book-Entry Note in the appropriate daily
bond report published by S&P.
Interest Payment Dates. Interest payments
will be made on each Interest Payment Date
commencing with the first Interest Payment
Date following the Original Issue Date;
provided, however, the first payment of
interest on any Book-Entry Note originally
issued between a Regular Record Date and an
Interest Payment Date will occur on the
Interest Payment Date following the next
Regular Record Date.
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<PAGE> 23
Fixed Rate Notes. Interest payments on
Fixed Rate Book-Entry Notes will be made
semiannually on June 15 and December 15 of
each year and at Maturity.
Floating Rate Notes. Except as provided in
Part I under "Calculation of Interest", the
Interest Payment Date for a Floating Rate
Note will be, in the case of Floating Rate
Notes which reset daily, weekly or monthly,
on the third Wednesday of each month or on
the third Wednesday of March, June,
September and December of each year as
specified in the applicable Pricing
Supplement; in the case of Floating Rate
Notes which reset quarterly, on the third
Wednesday of March, June, September and
December of each year; in the case of
Floating Rate Notes which reset
semi-annually, on the third Wednesday of the
two months of each year specified in the
applicable Pricing Supplement; or, in the
case of Eleventh District Cost of Funds Rate
Notes, on the first Business Day of each
month or the first Business Day of each
March, June, September or December as
specified in the applicable Pricing
Supplement and in the case of Floating Rate
Notes which reset annually, on the third
Wednesday of the month specified in the
applicable Pricing Supplement; and, in each
case, at Maturity. For additional special
provisions relating to Floating Rate Notes,
see the Prospectus Supplement.
-23-
<PAGE> 24
Regular Record Dates. The Regular Record
Date with respect to any Interest Payment
Date for a Fixed Rate Note shall be the May
31 or November 30 preceding such Interest
Payment Date. The Regular Record Date with
respect to any Interest Payment Date for any
Floating Rate Note shall be the date 15
calendar days (whether or not a Business
Day) preceding such Interest Payment Date.
Notice of Interest Payments and Regular
Record Dates. On the first Business Day of
January, April, July and October of each
year, the Trustee will deliver to the
Company and DTC a written list of Regular
Record Dates and Interest Payment Dates that
will occur during the six-month period
beginning on such first Business Day with
respect to Floating Rate Book-Entry Notes.
Promptly after each Interest Determination
Date for Floating Rate Book-Entry Notes, the
Company will notify S&P of the interest
rates determined on such Interest
Determination Date.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after
each Regular Record Date, the Trustee will
deliver to the Company and DTC a written
notice specifying by CUSIP number the amount
of interest to be paid on each Book-Entry
Note issued under the Indenture on the
following Interest Payment Date (other than
an Interest Payment Date coin-
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<PAGE> 25
ciding with Maturity) and the total of such
amounts. DTC will confirm the amount payable
on each Book-Entry Note on such Interest
Payment Date by reference to the daily bond
reports published by Standard & Poor's. On
such Interest Payment Date, the Company will
pay to the Trustee, and the Trustee in turn
will pay to DTC, such total amount of
interest due (other than at Maturity), at
the times and in the manner set forth below
under "Manner of Payment."
Payments at Maturity. On or about the first
Business Day of each month, the Trustee will
deliver to the Company and DTC a written
list of principal, interest and premium, if
any, to be paid on each Book-Entry Note
issued under the Indenture having a Maturity
in the following month. The Trustee and DTC
will confirm the amounts of such principal,
premium and interest payments with respect
to a Book-Entry Note on or about the fifth
Business Day preceding the Maturity of such
Book-Entry Note. At such maturity, the
Company will pay to the Trustee, and the
Trustee in turn will pay to DTC, the
principal amount of such Note, together with
interest and premium, if any, due at such
Maturity, at the times and in the manner set
forth below under "Manner of Payment."
Promptly after payment to DTC of the
principal, interest and premium, if any, due
at the Maturity of such Book-Entry Note,
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<PAGE> 26
the Trustee will cancel and destroy such
Book-Entry Note and deliver to the Company a
certificate of destruction therefor.
Manner of Payment. The total amount of any
principal, premium, if any, and interest due
on Book-Entry Notes on any Interest Payment
Date or at Maturity shall be paid by the
Company to the Trustee in funds available
for use as of 9:30 a.m., New York City time,
on such date. The Company will make such
payment on such Book-Entry Notes by
instructing the Trustee to withdraw funds
from an account maintained by the Company
with the Trustee. The Company will confirm
such instructions in writing to the
Trustee. Prior to 10:00 a.m., New York City
time, on such date or as soon as possible
thereafter, the Trustee will pay by separate
wire transfer (using Fedwire message entry
instructions in a form previously specified
by DTC) to an account at the Federal Reserve
Bank of New York previously specified by
DTC, in funds available for immediate use by
DTC, each payment of principal (together
with interest and premium, if any) due on a
Book-Entry Note on such date. There after
on such payment date, DTC will pay, in
accordance with its SDFS operating
procedures then in effect, such amounts in
funds available for immediate use to the
respective Participants in whose names such
Notes are recorded in the book-entry system
maintained by
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<PAGE> 27
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
-27-
<PAGE> 28
Floating Rate Notes:
(a) interest rate basis;
(b) initial interest rate;
(c) spread and/or spread
multiplier, if any;
(d) initial interest reset
dates;
(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest rate, if
any;
(j) minimum interest rate, if
any;
(k) alternate rate event
spread; and
(l) interest rate reset
dates.
5. Price to public of the Note.
6. Trade date.
7. Settlement Date (Original Issue
Date).
8. Stated Maturity.
9. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption
Percentage
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<PAGE> 29
(c) Annual Redemption
Percentage Reduction
10. Optional Repayment Date(s), if any.
11. Net proceeds to the Company.
12. Presenting Agent's commission.
B. The Company will advise the Trustee by
telecopy or other method acceptable to the
Trustee of the above settlement information
received with respect to each Note from the
Presenting Agent and shall confirm to the
Trustee that the principal amount of Notes,
including such Note, issued as of the
relevant Settlement Date shall not exceed
the limit with respect to the principal
amount of Notes specified in the most recent
Company Order delivered to the Trustee
pursuant to Section 303 of the Indenture.
C. The Trustee will assign a CUSIP Number to
the Book-Entry Note and will telephone and
advise the Company and the Presenting Agent
of such CUSIP Number. The Trustee will
communicate to DTC and the Presenting Agent
through DTC's Participant Terminal System a
pending deposit message
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<PAGE> 30
specifying the following settlement
information:
1. The information set forth in
Settlement Procedure A.
2. Identification numbers of the
participant accounts maintained by
DTC on behalf of the Trustee and
the Presenting Agent.
3. Identification as a Fixed Rate
Book-Entry Note or Floating Rate
Book-Entry Note.
4. Initial Interest Payment Date for
such Note, number of days by which
such date succeeds the related
record date for DTC purposes (or,
in the case of Floating Rate Notes
which reset daily or weekly, the
date five calendar days preceding
the Interest Payment Date) and, if
then calculable, the amount of
interest payment on such Interest
Payment Date (which amount shall
have been confirmed by the
Trustee).
5. CUSIP number of the Book-Entry
Note representing such Note.
6. Whether such Book-Entry Note
represents any other
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<PAGE> 31
Notes issued or to be issued in
book-entry form.
D. The Company will deliver to the Trustee a
Book-Entry Note representing such Note in a
form that has been approved by the Company,
the Agents and the Trustee.
E. The Trustee will complete and authenticate
the Book-Entry Note.
F. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to
the Trustee's participant account and credit
such Note to the participant account of the
Presenting Agent maintained by DTC and (ii)
to debit the settlement account of the
Presenting Agent and credit the settlement
account of the Trustee maintained by DTC, in
an amount equal to the price of such Note
less the Presenting Agent's commission. Any
entry of such a deliver order shall be
deemed to constitute a representation and
warranty by the Trustee to DTC that (i) the
Book-Entry Note has been issued and
authenticated
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<PAGE> 32
and (ii) the Trustee is holding such
Book-Entry Note pursuant to the Certificate
Agreement between the Trustee and DTC.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Note to the Presenting Agent's
participant account and credit such Note to
the participant account of the Participants
maintained by DTC and (ii) to debit the
settlement accounts of such Participants and
credit the settlement account of the
Presenting Agent maintained by DTC, in an
amount equal to the initial public offering
price of such Note.
I. Transfers of funds in accordance with SDFS
delivery orders described in Settlement
Procedures G and H will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date.
J. The Trustee will credit to an account of the
Company maintained by the Trustee funds
available for immediate use in the amount
transferred to the Trustee in accordance
with Settlement Procedure G.
K. The Trustee will send a copy of the
Book-Entry Note to the
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<PAGE> 33
Company together with a statement setting
forth the principal amount of Notes
Outstanding as of the related Settlement
Date after giving effect to such transaction
and all other offers to purchase Notes of
which the Company has advised the Trustee
but which have not been settled.
L. The Presenting Agent will confirm the
purchase of such Note to the purchaser
either by transmitting to the Participant
with respect to such Note a confirmation
order through DTC's Participant Terminal
System or by mailing a written confirmation
to such purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the Company,
Settlement Procedures "A" through "L" set forth above
shall be completed as soon as possible but not later
than the respective times (New York City time) set
forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
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
</TABLE>
-33-
<PAGE> 34
<TABLE>
<S> <C>
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>
If a sale is to be settled more than one Business Day
after the trade date, Settlement Procedures A, B, and
C may, if necessary, be completed at any time prior
to the specified times on the first Business Day
after such trade date. In connection with a sale
which is to be settled more than one Business Day
after the trade date, if the initial interest rate
for a Floating Rate Note is not known at the time
that Settlement Procedure A is completed, Settlement
Procedures B and C shall be completed as soon as such
rates have been determined, but no later than 11:00
a.m. and 2:00 p.m., New York City time, respectively,
on the second Business Day before the Settlement
Date. Settlement Procedure I is subject to extension
in accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the Settlement
Date.
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<PAGE> 35
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Company shall notify the Trustee and
the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message
to such effect by no later than 2:00 p.m., New York
City time, on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle: If the Trustee has not entered an SDFS deliver order
with respect to a Book-Entry Note pursuant to
Settlement Procedure G, then upon written request
(which may be evidenced by facsimile transmission)
of the Company the Trustee shall deliver to DTC,
through DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to
debit such Note to the participant account of the
Trustee maintained at DTC. DTC will process the
withdrawal message, provided that such participant
account contains a principal amount of the Book-Entry
Note representing such Note that is at least equal to
the principal amount to be debited. If withdrawal
messages are processed with respect to all the Notes
represented by a Book-Entry Note, the Trustee will
mark such Book-Entry Note "cancelled", make
appropriate entries in its records and send such
cancelled Book-Entry Note to the Company. The CUSIP
number assigned to such Book-Entry Note shall, in
accordance with CUSIP
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<PAGE> 36
Service Bureau procedures, be cancelled and not
immediately reassigned. If withdrawal messages are
processed with respect to a portion of the Notes
represented by a Book-Entry Note, the Trustee will
exchange such Book-Entry Note for two Book-Entry
Notes, one of which shall represent the Book-Entry
Notes for which withdrawal messages are processed and
shall be cancelled immediately after issuance, and
the other of which shall represent the other Notes
previously represented by the surrendered Book-Entry
Note and shall bear the CUSIP number of the
surrendered Book-Entry Note.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing Settlement Procedures G and
H, respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the related actions
described in the preceding paragraph. If such failure
shall have occurred for any reason other than default
by the Presenting Agent to perform its obligations
hereunder or under the Distribution Agreement, the
Company will reimburse the Presenting Agent
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<PAGE> 37
on an equitable basis for its loss of the use of
funds during the period when the funds were credited
to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event of
a failure to settle with respect to a Note that was
to have been represented by a Book-Entry Note also
representing other Notes, the Trustee will provide,
in accordance with Settlement Procedures D and E, for
the authentication and issuance of a Book-Entry Note
representing such remaining Notes and will make
appropriate entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Certificated Notes, other than Index
Notes and Multi-Currency Notes, will
be issued in denominations of $1,000
and integral multiples thereof. Index Notes
and Multi-Currency Notes will be issued in
the denominations specified in a related
Multi-Currency and Indexed Note Prospectus
Supplement and Pricing Supplement.
Interest: Each Certificated Note will bear interest in
accordance with its terms. Interest will begin to
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<PAGE> 38
accrue on the Original Issue Date of a Certificated
Note for the first Interest Payment Period and on the
most recent Interest Payment Date to which interest
has been paid for all subsequent Interest Payment
Periods. Each payment of interest shall include
interest accrued to, but excluding, the date of such
payment. Interest payments in respect of Fixed Rate
Certificated Notes will be made semi-annually on
June 15 and December 15 of each year and at Maturity.
How ever, the first payment of interest on any
Certificated Note issued between a Regular Record
Date and an Interest Payment Date will be made on the
Interest Payment Date following the next succeeding
Regular Record Date. The Regular Record Date with
respect to any Interest Payment Date for a Fixed Rate
Certificated Note shall be the May 31 or November 30
preceding such Interest Payment Date. Interest at
Maturity will be payable to the person to whom the
principal is payable.
Except as provided in Part I under "Calculation of
Interest", the Interest Payment Date for a Floating
Rate Certificated Note will be, in the case of
Floating Rate Notes which reset daily, weekly or
monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and
December of each year as specified in the applicable
Pricing Supplement; in the case of Floating Rate
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<PAGE> 39
Notes which reset quarterly, on the third Wednesday
of March, June, September and December of each year;
in the case of Floating Rate Notes which reset
semiannually, on the third Wednesday of the two
months of each year specified in the applicable
Pricing Supplement; or, in the case of Eleventh
District Cost of Funds Rate Notes, on the first
Business Day of each month or the first Business Day
of each March, June, September or December as
specified in the applicable Pricing Supplement and in
the case of Floating Rate Notes which reset annually,
on the third Wednesday of the month specified in the
applicable Pricing Supplement; and, in each case, at
Maturity. The Regular Record Date with respect to a
Floating Rate Note shall be the date 15 calendar days
(whether or not a Business Day) preceding an Interest
Payment Date.
Notwithstanding the above, in the case of Floating
Rate Certificated Notes having interest rates which
reset daily or weekly, interest payments shall
include accrued interest from, and including, the
date of issue or from, but excluding, the last date
in respect of which interest has been accrued and
paid, as the case may be, through, and including, the
Regular Record Date, except that at Maturity the
interest payable will include interest accrued to,
but excluding, the date of Maturity. For additional
special provisions relating
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<PAGE> 40
to Floating Rate Certificated Notes, see the
Prospectus Supplement.
Payments of Principal
and Interest: Upon presentment and delivery of the Certificated
Note, the Trustee or the Company's duly authorized
agent will pay the principal amount of each
Certificated Note at Maturity and the final
installment of interest in immediately available
funds. All interest payments in U.S. dollars on a
Certificated Note, other than interest due at
Maturity, will be made by check drawn on the Trustee
or the Company's duly authorized agent and mailed by
such Trustee or agent to the person entitled thereto
as provided in the Certificated Note. However, the
Registered Owners (as hereinafter defined) of ten
million dollars or more in aggregate principal
amount of the same series of Certificated Notes
(whether having identical or different terms and
provisions) shall be entitled to receive payments of
interest, other than at Maturity, by wire transfer of
immediately available funds if appropriate wire
transfer instructions have been received in writing
by the appropriate Trustee or such agent not less
than 16 days prior to the applicable Interest Payment
Date.
For special provisions relating to Multi-Currency
Notes and Indexed Notes, see the related
Multi-Cur-
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<PAGE> 41
rency and Indexed Note Prospectus Supplement.
The Trustee will provide monthly to the Company a
list of the principal and interest in each currency
to be paid on Certificated Notes maturing in the next
succeeding month. Such Trustee or agent will be
responsible for withholding taxes on interest paid
as required by applicable law, but shall be relieved
from any such responsibility if it acts in good faith
and in reliance upon an opinion of counsel.
Certificated Notes presented to the Trustee or the
Company's duly authorized agent at Maturity for
payment will be cancelled by such Trustee or agent.
All cancelled Certificated Notes held by such Trustee
shall be destroyed, and the Trustee shall furnish to
the Company a certificate with respect to such
destruction.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note purchased through the Agents, as
agents, shall be as follows:
A. Each Agent will advise the Company by
telephone of the following Settlement
information with regard to each
Certificated Note:
1. Exact name in which the
Certificated Note is to be
registered (the "Registered
Owner").
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<PAGE> 42
2. Exact address or addresses of the
Registered Owner for delivery,
notices and payments of principal,
premium, if any, and interest.
3. Taxpayer identification number of
the Registered Owner.
4. Principal amount of the
Certificated Note.
5. Denomination of the Certificated
Note.
6. Fixed Rate Notes:
(a) interest rate
Floating Rate Notes:
(a) interest rate basis
or bases;
(b) initial interest rate;
(c) spread or spread
multiplier, if any;
(d) initial interest reset
date;
(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest
rates, if any;
(j) minimum interest
rate, if any;
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<PAGE> 43
(k) alternate rate event
spread; and
(l) interest determination
dates
Indexed Notes:
(a) specified currency;
(b) indexed currency;
and
(c) base rate of
exchange.
8. Currency or currency unit in which
the Certificated Note is to be
denominated.
9. Price to public of the Certificated
Note.
10. Settlement Date (Original Issue
Date).
11. Stated Maturity.
12. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption
Percentage
(c) Annual Redemption
Percentage Reduction
13. Optional Repayment Date(s), if any.
14. Net proceeds to the Company.
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<PAGE> 44
15. Presenting Agent's commission.
B. The Company shall provide to the Trustee by
telecopy or other method acceptable to the
Trustee the above Settlement information
with respect to each Certificated Note
received from the Agents, the name of the
Presenting Agent and shall confirm to the
Trustee that the principal amount of Notes,
including such Certificated Note, issued as
of the relevant Settlement Date shall not
exceed the limit with respect to the
principal amount of Notes specified in the
most recent Company Order delivered to the
Trustee pursuant to Section 303 of the
Indenture. The Company also shall cause the
Trustee or its duly appointed agent to
issue, authenticate and deliver Certificated
Notes in accordance with the Settlement
Procedures Timetable set forth below. The
Company also shall provide to the Trustee
and the Presenting Agent a copy of the
applicable Pricing Supplement. The Company
also shall provide to the Trustee and the
Presenting Agent a copy of a Multi-Currency
and Indexed Note Supplement, if applicable.
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<PAGE> 45
C. The Trustee or its duly appointed agent will
complete and authenticate the Certificated
Notes, including the Guarantee, in forms
approved by the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Notes and one
photocopy thereof to the applicable
Presenting Agent at the following addresses:
Merrill Lynch & Co., Money
Markets Clearance, 55 Water
Street, 3rd Floor, N.S.C.C.
Window, New York, New York
10041, Attention: Al Mitchell
Telephone: (212) 558-2405
Telecopy: (212) 558-2457
Credit Suisse First Boston
Corporation, Five World Trade
Center, New York, New York
10048, Attention: Paul Riley
Chase Securities, Inc.,
55 Water Street
Room 226
Window 17 and 18
New York, New York 10011
Telephone: (212) 638-6787
Telecopy: (212) 638-5618
First Chicago Capital Markets,
Inc.
c/o Bankers Trust, 16 Wall
Street, 5th Floor, Window 51,
New York, New York, 10015,
Attention: Jim Murray
Telephone: (212) 618-2370
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<PAGE> 46
The Trustee will keep Stub 1. The Presenting
Agent will acknowledge receipt of the
Certificated Note through a broker's receipt
and will keep the photocopy. Delivery of the
Certificated Note will be made only against
such acknowledgment of receipt.
Upon determination that the Certificated
Note, including the related Guarantee, has
been authorized, delivered and completed as
aforementioned, the Presenting Agent will
wire the net proceeds of the Certificated
Note after deduction of its applicable
commission to the Company pursuant to
standard wire instructions given by the
Company.
E. The Presenting Agent will deliver the
Certificated Note, the related Guarantee
endorsed thereon, as well as a copy of the
Prospectus and any applicable Pricing
Supplement or Supplements received from the
Trustee, to the purchaser against payment in
immediately available funds.
F. The Trustee will send a photocopy of the
Certified Note to the Company.
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<PAGE> 47
Settlement Procedures
Timetable: For offers to purchase Certificated Notes accepted by
the Company, Settlement Procedures "A" through "F"
set forth above shall be completed on or before the
respective times set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
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
</TABLE>
Failure to Settle: In the event that a purchaser of a Certificated Note
from the Company shall either fail to accept delivery
of or make payment for a Certificated Note on the
date fixed for settlement, the Presenting Agent will
forthwith notify the Trustee and the Company by
telephone, confirmed in writing, and return the
Certificated Note to such Trustee.
The Trustee or the Company's duly authorized agent,
upon receipt of the Certificated Note from the
Presenting Agent, will immediately advise the
Company, and the Company will promptly arrange to
credit the account of the Presenting Agent in an
amount of immediately available funds equal to the
amount
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<PAGE> 48
previously paid by the Presenting Agent in settlement
for the Certificated Note. Such credits will be made
on the Settlement Date if possible, and in any event
not later than the Business Day following the
Settlement Date; provided that the Company has
received notice on the same day. If such failure
shall have occurred for any reason other than failure
by the Presenting Agent to perform its obligations
hereunder or under the Distribution Agreement, the
Company will reimburse the Presenting Agent on an
equitable basis for its loss of the use of funds
during the period when the funds were credited to the
account of the Company. Immediately upon receipt of
the Certificated Note in respect of which the failure
occurred, the Trustee or the Company's duly
authorized agent will cancel and destroy the
Certificated Note, make appropriate entries in its
records to reflect the fact that the Certificated
Note was never issued, and accordingly notify in
writing the Company.
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<PAGE> 1
EXHIBIT 10(b)
POPULAR NORTH AMERICA, INC.
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
(DATED AS OF MAY 23, 1997)
Medium-Term Notes (collectively, the "Notes") in the aggregate
principal amount of up to $1,000,000,000 are to be offered on a continuous
basis by Popular North America, Inc. (the "Company") through Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"),
Credit Suisse First Boston Corporation ("Credit Suisse First Boston"), Chase
Securities Inc. ("Chase Securities")and First Chicago Capital Markets, Inc.
("First Chicago") who, as agents (each an "Agent"), have agreed to use their
reasonable efforts to solicit offers to purchase the Notes from the Company.
The Agents also may purchase Notes as principal for resale.
The Notes are being sold pursuant to a Distribution Agreement among
the Company, Popular, Inc. (the "Guarantor") and the Agents, dated May 23, 1997
(the "Distribution Agreement"). The Notes will be unconditionally guaranteed
as to payment of principal, premium, if any, and interest by the Guarantor (the
"Guarantees"). The Notes and related Guarantees will be issued pursuant to the
Indenture, dated as of October 1, 1991, as supplemented by the First
Supplemental Indenture dated as of February 28, 1995, and the Second
Supplemental Indenture, dated as of May 8, 1997 (together, the "Indenture"),
each among the Company, the Guarantor and The First National Bank of Chicago,
as trustee (the "Trustee"), and as Successor Trustee to Citibank, N.A. A
Registration Statement (the "Registration Statement", which term shall include
any additional registration statements filed in connection with the Notes and
related Guarantees as provided in the Distribution Agreement) with respect to
the Notes and related Guarantees has been filed with the Securities and
Exchange Commission (the "Commission"). The most recent base Prospectus
included in the Registration Statement, as supplemented with respect to the
Notes and related Guarantees, is herein referred to as the "Prospectus." The
most recent supplement to the Prospectus with respect to the specific terms of
the Notes is herein referred to as the "Pricing Supplement."
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-
<PAGE> 2
Entry Note") delivered to the appropriate Trustee, as agent for The Depository
Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC,
or (b) in certificated form (each, a "Certificated Note") delivered to the
purchaser thereof or a person designated by such purchaser. Owners of
beneficial interests in Book-Entry Notes will be entitled to physical delivery
of Certificated Notes equal in principal amount to their respective beneficial
interests only upon certain limited circumstances described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in Part III hereof.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee or its duly appointed
authenticating agent. Each Note shall also bear an
original issue date (the "Original Issue Date"). The
Original Issue Date shall remain the same for all
Notes subsequently issued upon transfer, exchange or
substitution of an original Note regardless of their
dates of authentication.
Maturities: Each Note will mature on a date selected by the
purchaser and agreed to by the Company which is not
less than nine months nor more than thirty years
from its Original Issue Date; provided, however,
that Notes bearing interest at rates determined by
reference to selected indices ("Floating Rate
Notes") will mature on an Interest Payment Date.
Currencies: Each Note shall be denominated in one of the
currencies or currency units, as specified in the
relevant
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<PAGE> 3
Pricing Supplement, or in such other currency or
currency unit as may be agreed from time to time
between the Company and each Agent and as specified
in the relevant Pricing Supplement, or, if no
currency or currency unit is specified therein, in
U.S. dollars. Notes denominated in one or more
currencies or currency units other than in U.S.
dollars are herein referred to as "Multi-Currency
Notes." Notes that have the amount of principal
payments determined by reference to an index
currency are herein referred to as "Indexed Notes."
Denominations: The Notes will be issued in denominations of $1,000
and integral multiples thereof. Any Notes
denominated other than in U.S. dollars will be
issuable in denominations as set forth in the
relevant Multi-Currency and Indexed Note Prospectus
Supplement. For special provisions relating to
Multi-Currency Notes and Indexed Notes, see the
related Multi-Currency and Indexed Note Supplement.
Registration: Notes will be issued only in fully registered form.
Redemption/Repayment: The Notes will be subject to repayment at the option
of the Holders thereof in accordance with the terms
of the Notes on their respective Optional Repayment
Dates, if any. Optional Repayment Dates, if any,
will be fixed at the time of sale and set forth in
the applicable Pricing Supplement and in the
applicable Note. If no Optional Repayment Dates are
indicated with respect to a Note, such Note will not
be repayable at the option of the Holder prior to
Maturity.
-3-
<PAGE> 4
The Notes will be subject to redemption by the
Company on and after their respective Initial
Redemption Dates, if any. Initial Redemption Dates,
if any, will be fixed at the time of sale and set
forth in the applicable Pricing Supplement and in
the applicable Note. If no Initial Redemption Dates
are indicated with respect to a Note, such Note will
not be redeemable prior to Maturity.
Calculation of
Interest: In the case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months. In the case of Floating Rate Notes, interest
will be calculated and paid on the basis of the
actual number of days in the interest period divided
by 360 with the exception of Treasury Rate Notes for
which interest will be calculated on the basis of
the actual number of days in the interest period
divided by the actual number of days in the year. If
an Interest Payment Date with respect to any Fixed
Rate Note falls on a day that is not a Business Day
(as hereinafter defined), the payment of interest
required to be made on such Interest Payment Date
need not be made on such day, but may be made on the
next succeeding Business Day with the same force and
effect as if made on such Interest Payment Date and
no interest shall accrue on such payment for the
period from and after such Interest Payment Date. If
an Interest Payment Date with respect to any
Floating Rate Note would otherwise fall on a day
that is not a Business Day, such Interest Payment
Date will be the following day that is a Business
Day, except that in the case of a LIBOR Note, if
such
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<PAGE> 5
day falls in the next calendar month, such Interest
Payment Date will be the preceding day that is a
Business Day. If the Stated Maturity, or date of
earlier redemption or repayment, as the case may be,
of a Note is not a Business Day, the payment of
principal and interest due on such day shall be made
on the next succeeding Business Day and no interest
shall accrue on such payment for the period from and
after such Stated Maturity, or date of earlier
redemption or repayment. For special provisions
relating to Multi-Currency Notes and Indexed Notes,
see the related Multi-Currency and Indexed Note
Prospectus Supplement.
Acceptance and
Rejection of Offers: The Company shall have the sole right to accept
offers to purchase Notes from the Company and may
reject any such offer in whole or in part. Each
Agent shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Notes
from the Company received by it. Each Agent shall
have the right, in its discretion reasonably
exercised, without notice to the Company, to reject
any offer to purchase Notes through it in whole or
in part.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company, with the approval of the Agent
which presented the order (the "Presenting Agent"),
will prepare a Pricing Supplement reflecting the
terms of such Note and file the Pricing Supplement
relating to the Notes with the Commission in
accordance with Rule 424 under the Act. Information
to be included in the Pricing Supplement shall
include:
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<PAGE> 6
1. the name of the Company and the
Guarantor;
2. the title of the securities, including
series designation, if any;
3. the date of the Pricing Supplement and
the date of the Prospectus Supplement to which the
Pricing Supplement relates;
4. the Price to Public (but only if (a) the
trade is being made on an agency basis and (b) such
Price to Public is other than 100%);
5. Net Proceeds to the Company (but only if
(a) the trade is being made on a principal basis and
(b) the Net Proceeds to the Company is other than
100%), less what would have been the applicable
agency commission;
6. the information with respect to the
terms of the Notes set forth below (whether or not
the applicable Note is a Book-Entry Note) under
"Procedures for Notes Issued in Book-Entry Form --
Settlement Procedures", items 2, 3, 7, 8 and 9; and
7. any other terms of the Notes not
otherwise specified in the Prospectus or Prospectus
Supplement.
One copy of such filed document will be sent by
telecopy or over-night express (for delivery not
later than 11:00 A.M. on the Business Day next
following the trade date) to the applicable
Presenting Agent at the following addresses:
To Merrill Lynch:
-6-
<PAGE> 7
If by overnight, express or special
delivery:
Merrill Lynch & Co., Tritech
Services, 40 Colonial Drive,
Piscataway, New Jersey 08854,
Attention: Prospectus Operations/
Susan Putnam
If by all other types of deliveries:
Tritech Services, #4 Corporate
Place, Corporate Park 287,
Piscataway, New Jersey 08854,
Attention: Prospectus Operations/
Nachman Kimerling, Final Prospectus
Unit
Telephone: (908) 885-2769
Telecopy: (908) 885-2774/2775/2776
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation, Five World Trade
Center, New York, New York 10055,
Attention: Joan Bryan
Telephone: (212) 322-5105
Telecopy: (212) 803-4096
To Chase Securities:
Chase Securities, Inc.
270 Park Avenue, 8th Floor,
New York, New York 10017,
Attention: Medium Term Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0237
Chicago, Illinois 60670
Attention: MTN Operations Manager
Telephone: (317) 732-9631
The Presenting Agent will cause a
stickered supplemented Prospectus with
the trade confirmation to be delivered to
the purchaser of the Note.
For record keeping purposes, one copy of each
Pricing Supplement
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<PAGE> 8
shall also be mailed or telecopied to each Agent and
the Trustee at the following respective addresses:
To Merrill Lynch:
Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith
Incorporated, World Financial
Center, North Tower, 10th Floor,
New York, New York 10281-1310,
Attention: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234;
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation, 55 East 52nd Street,
New York, New York 10055,
Attention: Short and Medium-Term
Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To Chase Securities:
Chase Securities, Inc.
270 Park Avenue, 8th Floor
New York, New York 10017
Attention: Medium Term Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Fax: (312) 732-4172
To the Trustee:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust
Administration
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
-8-
<PAGE> 9
Pricing Supplement to supplemented Prospectuses
prior to its use. Outdated Pricing Supplements and
the Prospectuses to which they are attached (other
than those retained for files) will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the authentication
and delivery of such Note, including the related
Guarantee, shall, with respect to such Note,
constitute "settlement." Offers accepted by the
Company will be settled at a time as the purchaser
and the Company shall agree and pursuant to the
timetable for settlement set forth in Parts II and
III hereof under "Settlement Procedures" with
respect to Book-Entry Notes and Certificated Notes,
respectively (each such date fixed for settlement, a
"Settlement Date"). If procedures A and B of the
applicable Settlement Procedures with respect to a
particular offer are not completed on or before the
time set forth under the applicable "Settlement
Procedures Timetable", such offer shall not be
settled until the Business Day following the
completion of Settlement Procedures A and B or such
later date as the purchaser and the Company shall
agree.
In the event of a purchase of Notes by the
Presenting Agent as principal, appropriate
settlement details will be set forth in the
applicable Terms Agreement to be entered into
between the Presenting Agent and the Company
pursuant to the Distribution Agreement.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change the
interest rate or any other variable term on any
Notes
-9-
<PAGE> 10
being offered by the Company, the Company will
promptly advise the Agents and the Agents will
forthwith suspend solicitation of offers to purchase
such Notes. Each Agent will telephone the Company
with recommendations as to the changed interest
rates or other variable terms. At such time as the
Company advises the Agents of the new interest rates
or other variable terms, the Agents may resume
solicitation of offers to purchase such Notes. Until
such time, only "indications of interest" may be
recorded. Immediately after acceptance by the
Company of an offer to purchase at a new interest
rate or new variable term, the Company, the Agents
and the Trustee shall follow the procedures set
forth under the applicable "Settlement Procedures."
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend
solicitation of purchases at any time. Upon receipt
of such instructions, the Agents will forthwith
suspend solicitation of offers to purchase from the
Company until such time as the Company has advised
them that solicitation of offers to purchase may be
resumed. If the Company and the Guarantor decide to
amend the Registration Statement (including
incorporating any documents by reference therein) or
supplement any of such documents (other than to
change rates or other variable terms), they will
promptly advise the Agents and, except in the case
of an amendment by the filing of a document
incorporated by reference in the Registration
Statement, will furnish each Agent and its counsel
with copies of the proposed amendment or supplement.
One copy of
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<PAGE> 11
such filed document, along with a copy of the cover
letter sent to the Commission, will be delivered or
mailed to the Agents at the following addresses:
To Merrill Lynch:
Product Management MTNs, Merrill Lynch
Lynch Money Markets, North Tower,
World Financial Center, 10th Floor,
New York, New York 10281-1310
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
To Credit Suisse First Boston:
Credit Suisse First Boston
Corporation 55 East 52nd Street,
New York, New York 10055
Attention: Short and Medium-Term
Finance Department
Telephone: (212) 909-3842
Telecopy: (212) 318-1498
To Chase Securities:
Chase Securities, Inc.
270 Park Avenue, 8th Floor,
New York, New York 10017
Attention: Medium Term Note Desk
Telephone: (212) 834-4421
Telecopy: (212) 834-6081
To First Chicago:
First Chicago Capital Markets, Inc.
One First National Plaza
Mail Suite 0407
Chicago, Illinois 60670-0327
Attention: Chief Credit Officer
Telephone: (312) 732-5294
Fax: (312) 732-4172
In the event that at the time the solicitation of
offers to purchase from the Company is suspended
(other than to change interest rates or other
variable terms) there shall be any offers to
purchase Notes which have not been settled, the
Company will promptly advise the Agents and the
Trustee
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whether such offers may be settled and whether
copies of the Prospectus as theretofore amended
and/or supplemented as in effect at the time of the
suspension may be delivered in connection with the
settlement of such orders. The Company will have the
sole responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such orders may not be
settled or that copies of such Prospectus may not be
so delivered.
Delivery of Prospectus: A copy of the most recent Prospectus and Pricing
Supplement must accompany or precede the earlier of
(a) the written confirmation of a sale sent to a
customer or his agent and (b) the delivery of Notes
to a customer or his agent.
Authenticity of
Signatures: The Agents will have no obligation or liability to
the Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company, the Guarantor or
the Trustee on any Note or related Guarantee.
Documents Incorporated
by Reference: The Company and the Guarantor shall supply each
Agent with an adequate supply of all documents
incorporated by reference in the Registration
Statement.
Business Day: "Business Day" means any day other than a Saturday,
Sunday, or other day on which banks in The City of
New York (and, with respect to LIBOR Notes, the City
of London) are authorized or obligated by law or
executive order to close. For the definition of
"Business Day" with respect to Multi-Currency Notes
or Indexed Notes, see the Prospectus Supplement.
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PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its obligations under a Letter of Representations
from the Company, the Guarantor and the Trustee to DTC, dated May [22], 1997,
and a Medium-Term Note Certificate Agreement between the Trustee and DTC, dated
May 26, 1989 (the "Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Book-Entry Notes having the same
Original Issue Date, interest rate, terms of
redemption or repayment, if any, and Stated Maturity
(collectively, the "Fixed Rate Terms") will be
represented initially by a single global security in
fully registered form without coupons; and all
Floating Rate Book-Entry Notes having the same
Original Issue Date, interest rate basis or bases
upon which interest may be determined (each, an
"Interest Rate Basis"), which may be one or more of
the Commercial Paper Rate, the Treasury Rate, LIBOR,
the CD Rate, the CMT Rate, the Federal Funds Rate,
the Prime Rate, the Eleventh District Cost of Funds
Rate, any other rate set forth by the Company,
Initial Interest Rate, Index Maturity, Spread and/or
Spread Multiplier, if any, Minimum Interest Rate, if
any, Maximum Interest Rate, if any, terms of
redemption or repayment, if any, and Stated Maturity
(collectively, "Floating Rate Terms") will be
represented initially by a single Book-Entry Note.
Each Book-Entry Note will be dated and issued as of
the date of its authentication by the Trustee or
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its duly appointed authenticating agent. Each
Book-Entry Note will bear interest from a date (the
"Interest Accrual Date") which will be (a) with
respect to an original Book-Entry Note (or any
portion thereof), its Original Issue Date and (b)
with respect to any Book-Entry Note (or portion
thereof) issued subsequently upon exchange or
transfer of a Book-Entry Note or in lieu of a
destroyed, lost or stolen Book-Entry Note, the most
recent Interest Payment Date (or, in the case of
Floating Rate Notes with interest rates which reset
daily or weekly, the day following the most recent
Record Date to which interest has been paid or duly
provided for on the predecessor Book-Entry Note or
Notes (or if no such payment or provision has been
made, the Original Issue Date of the predecessor
Book-Entry Note or Notes), regardless of the date of
authentication of such subsequently issued
Book-Entry Note. No Book-Entry Note shall represent
any Certificated Note.
Identification: The Agents have arranged with the CUSIP Service
Bureau (the "CUSIP Service Bureau") of Standard &
Poor's Corporation ("Standard & Poor's") for the
reservation of approximately 900 CUSIP numbers for
each rank of Notes which have been reserved for
future assignment to Book-Entry Notes representing
Notes issued in book-entry form and have delivered
to the Company, the Trustee and DTC an initial
written list of such CUSIP numbers. The Trustee will
assign CUSIP numbers to Book-Entry Notes as
described below under Settlement Procedure B. DTC
will notify the CUSIP Service Bureau periodically of
the CUSIP numbers that the Trustee has assigned to
Book-Entry Notes. The
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<PAGE> 15
Trustee will notify the Company at any time when
fewer than 100 of the respective reserved CUSIP
numbers remain unassigned to Book-Entry Notes, and,
if it deems necessary, the Company will reserve
additional CUSIP numbers for assignment to
Book-Entry Notes representing Notes issued in
book-entry form. Upon obtaining such additional
CUSIP numbers, the Company will deliver a list of
such additional numbers to the Trustee and DTC.
Book-Entry Notes having an aggregate principal
amount in excess of $200,000,000 and otherwise
required to be represented by the same Global
Certificate will instead be represented by two or
more Global Certificates which shall be assigned the
same CUSIP number.
Registration: Each Book-Entry Note will be registered in the name
of CEDE & CO., as nominee for DTC, on the register
maintained by the Trustee under the Indenture. The
beneficial owner of a Book-Entry Note (i.e., an
owner of a beneficial interest in a Book-Entry
Note), or one or more indirect participants in DTC
designated by such owner, will designate one or more
participants in DTC (with respect to such Book-Entry
Note, the "Participants") to act as agent for such
beneficial owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such Book-Entry Note in the account of
such Participants. The ownership interest of such
beneficial owner in such Book-Entry Note will be
recorded through the records of such Participants or
through the separate records of such Participants
and one or more indirect participants in DTC.
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<PAGE> 16
Transfers: Transfers of beneficial interests in a Book-Entry
Note will be accomplished by book entries made by
DTC and, in turn, by Participants (and in certain
cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and
transferees of such Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice specifying (a)
the CUSIP numbers of two or more Book-Entry Notes
Outstanding on such date that represent Book-Entry
Notes having the same Fixed Rate Terms or Floating
Rate Terms, as the case may be, other than Original
Issue Dates, and for which interest has been paid to
the same date; (b) a date, occurring at least 30
days after such written notice is delivered and at
least 30 days before the next Interest Payment Date
for the related Book-Entry Notes, on which such
Book-Entry Notes shall be exchanged for a single
replacement Book-Entry Note; and (c) a new CUSIP
number to be assigned to such replacement Book-Entry
Note. Upon receipt of such a notice, DTC will send
to its Participants (including the Trustee) a
written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau written notice setting
forth such exchange date and the new CUSIP number
and stating that, as of such exchange date, the
CUSIP numbers of the Book-Entry Notes to be
exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such
Book-Entry Notes for a single Book-Entry Note
bearing the new CUSIP number and the CUSIP numbers
of the
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<PAGE> 17
exchanged Book-Entry Notes will, in accordance with
CUSIP Service Bureau procedures, be cancelled and
not immediately reassigned. Notwithstanding the
foregoing, if the Book-Entry Notes to be exchanged
exceed $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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<PAGE> 18
be, the Interest Payment Date (provided that in the
case of Floating Rate Notes with interest rates
which reset daily or weekly interest payments will
include interest accrued to and including the
Regular Record Date immediately preceding the
Interest Payment Date), the Stated Maturity Date,
Redemption Date or Repayment Date. Interest payable
at Maturity of a Book-Entry Note will be payable to
the Person to whom the principal of such Note is
payable. DTC will arrange for each pending deposit
message described under Settlement Procedure C below
to be transmitted to Standard & Poor's Corporation
("S&P"), which will use the information in the
message to include certain terms of the related
Book-Entry Note in the appropriate daily bond report
published by S&P.
Interest Payment Dates. Interest payments will be
made on each Interest Payment Date commencing with
the first Interest Payment Date following the
Original Issue Date; provided, however, the first
payment of interest on any Book-Entry Note
originally issued between a Regular Record Date and
an Interest Payment Date will occur on the Interest
Payment Date following the next Regular Record Date.
Fixed Rate Notes Interest payments on Fixed Rate
Book-Entry Notes will be made semiannually on June
15 and December 15 of each year and at Maturity.
Floating 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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<PAGE> 19
daily, weekly or monthly, on the third Wednesday of
each month or on the third Wednesday of March, June,
September and December of each year as specified in
the applicable Pricing Supplement; in the case of
Floating Rate Notes which reset quarterly, on the
third Wednesday of March, June, September and
December of each year; in the case of Floating Rate
Notes which reset semiannually, on the third
Wednesday of the two months of each year specified
in the applicable Pricing Supplement; or, in the
case of Eleventh District Cost of Funds Rate Notes,
on the first Business Day of each month or the first
Business Day of each March, June, September or
December as specified in the applicable Pricing
Supplement and in the case of Floating Rate Notes
which reset annually, on the third Wednesday of the
month specified in the applicable Pricing
Supplement; and, in each case, at Maturity. For
additional special provisions relating to Floating
Rate Notes, see the Prospectus Supplement.
Regular Record Dates. The Regular Record Date with
respect to any Interest Payment Date for a Fixed
Rate Note shall be the May 31 or November 30
preceding such Interest Payment Date. The Regular
Record Date with respect to any Interest Payment
Date for any Floating Rate Note shall be the date 15
calendar days (whether or not a Business Day)
preceding such Interest Payment Date.
Notice of Interest Payments and Regular Record
Dates. On the first Business Day of January, April,
July and October of each year, the Trustee will
deliver to the Company and DTC a written list of
Regular Record Dates and Interest Payment
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<PAGE> 20
Dates that will occur during the six-month period
beginning on such first Business Day with respect to
Floating Rate Book-Entry Notes. Promptly after each
Interest Determination Date for Floating Rate
Book-Entry Notes, the Company will notify S&P of the
interest rates determined on such Interest
Determination Date.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each
Regular Record Date, the Trustee will deliver to the
Company and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
Book-Entry Note issued under the Indenture on the
following Interest Payment Date (other than an
Interest Payment Date coinciding with Maturity) and
the total of such amounts. DTC will confirm the
amount payable on each Book-Entry Note on such
Interest Payment Date by reference to the daily bond
reports published by Standard & Poor's. On such
Interest Payment Date, the Company will pay to the
Trustee, and the Trustee in turn will pay to DTC,
such total amount of interest due (other than at
Maturity), at the times and in the manner set forth
below under "Manner of Payment."
ments at Maturity. On or about the first Business
Day of each month, the Trustee will deliver to the
Company and DTC a written list of principal,
interest and premium, if any, to be paid on each
Book-Entry Note issued under the Indenture having a
Maturity in the following month. The Trustee and DTC
will confirm the amounts of such principal, premium
and interest payments with respect to a Book-Entry
Note on or about the fifth Business Day preceding
the
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<PAGE> 21
Maturity of such Book-Entry Note. At such maturity,
the Company will pay to the Trustee, and the Trustee
in turn will pay to DTC, the principal amount of
such Note, together with interest and premium, if
any, due at such Maturity, at the times and in the
manner set forth below under "Manner of Payment."
Promptly after payment to DTC of the principal,
interest and premium, if any, due at the Maturity of
such Book-Entry Note, the Trustee will cancel and
destroy such Book-Entry Note and deliver to the
Company a certificate of destruction therefor.
Manner of Payment. The total amount of any
principal, premium, if any, and interest due on
Book-Entry Notes on any Interest Payment Date or at
Maturity shall be paid by the Company to the Trustee
in funds available for use as of 9:30 a.m., New York
City time, on such date. The Company will make such
payment on such Book-Entry Notes by instructing the
Trustee to withdraw funds from an account maintained
by the Company with the Trustee. The Company will
confirm such instructions in writing to the Trustee.
Prior to 10:00 a.m., New York City time, on such
date or as soon as possible thereafter, the Trustee
will pay by separate wire transfer (using Fedwire
message entry instructions in a form previously
specified by DTC) to an account at the Federal
Reserve Bank of New York previously specified by
DTC, in funds available for immediate use by DTC,
each payment of principal (together with interest
and premium, if any) due on a Book-Entry Note on
such date. Thereafter on such payment date, DTC will
pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds
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available for immediate use to the respective
Participants in whose names such Notes are recorded
in the book-entry system maintained by DTC. Neither
the Company nor the Trustee shall have any
responsibility or liability for the payment by DTC
of the principal of, or interest on, the Book-Entry
Notes to such Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Note will be determined and
withheld by the Participant, indirect participant in
DTC or other Person responsible for forwarding
payments and materials directly to the beneficial
owner of such Note.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Note sold by the Agents, as agents of the Company,
will be as follows:
A. The Presenting Agent will advise the
Company by telephone of the following
Settlement information:
1. Taxpayer identification number of
the purchaser.
2. Principal amount of the Note.
3. Fixed Rate Notes:
(a) interest rate
Floating Rate Notes:
(a) interest rate basis;
(b) initial interest rate;
(c) spread and/or spread
multiplier, if any;
(d) initial interest reset dates;
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<PAGE> 23
(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest rate, if
any;
(j) minimum interest rate, if
any;
(k) alternate rate event spread;
and
(l) interest rate reset dates.
5. Price to public of the Note.
6. Trade date.
7. Settlement Date (Original Issue
Date).
8. Stated Maturity.
9. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption
Percentage
(c) Annual Redemption
Percentage Reduction
10. Optional Repayment Date(s), if
any.
11. Net proceeds to the Company.
12. Presenting Agent's commission.
B. The Company will advise the Trustee by
telecopy or other method acceptable to the
Trustee of the above settlement information
received with respect to each Note from the
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<PAGE> 24
Presenting Agent and shall confirm to the
Trustee that the principal amount of Notes,
including such Note, issued as of the
relevant Settlement Date shall not exceed
the limit with respect to the principal
amount of Notes specified in the most
recent Company Order delivered to the
Trustee pursuant to Section 303 of the
Indenture.
C. The Trustee will assign a CUSIP Number to
the Book-Entry Note and will telephone and
advise the Company and the Presenting Agent
of such CUSIP Number. The Trustee will
communicate to DTC and the Presenting Agent
through DTC's Participant Terminal System a
pending deposit message specifying the
following settlement information:
1. The information set forth in
Settlement Procedure A.
2. Identification numbers of the
participant accounts maintained by
DTC on behalf of the Trustee and
the Presenting Agent.
3. Identification as a Fixed Rate
Book-Entry Note or Floating Rate
Book-Entry Note.
4. Initial Interest Payment Date for
such Note, number of days by which
such date succeeds the related
record date for DTC purposes (or,
in the case of Floating Rate Notes
which reset daily or weekly, the
date five calendar days preceding
the Interest Payment
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<PAGE> 25
Date) and, if then calculable, the
amount of interest payment on such
Interest Payment Date (which
amount shall have been confirmed
by the Trustee).
5. CUSIP number of the Book-Entry
Note representing such Note.
6. Whether such Book-Entry Note
represents any other Notes issued
or to be issued in book-entry
form.
D. The Company will deliver to the Trustee a
Book-Entry Note representing such Note in a
form that has been approved by the Company,
the Agents and the Trustee.
E. The Trustee will complete and authenticate
the Book-Entry Note.
F. DTC will credit such Note to the
participant account of the Trustee
maintained by DTC.
G. The Trustee will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC (i) to debit such
Note to the Trustee's participant account
and credit such Note to the participant
account of the Presenting Agent maintained
by DTC and (ii) to debit the settlement
account of the Presenting Agent and credit
the settlement account of the Trustee
maintained by DTC, in an amount equal to
the price of such Note less the Presenting
Agent's commission. Any entry of such a
deliver order shall
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be deemed to constitute a representation
and warranty by the Trustee to DTC that (i)
the Book-Entry Note has been issued and
authenticated and (ii) the Trustee is
holding such Book-Entry Note pursuant to
the Certificate Agreement between the
Trustee and DTC.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Note to the Presenting Agent's
participant account and credit such Note to
the participant account of the Participants
maintained by DTC and (ii) to debit the
settlement accounts of such Participants
and credit the settlement account of the
Presenting Agent maintained by DTC, in an
amount equal to the initial public offering
price of such Note.
I. Transfers of funds in accordance with SDFS
delivery orders described in Settlement
Procedures G and H will be settled in
accordance with SDFS operating procedures
in effect on the Settlement Date.
J. The Trustee will credit to an account of
the Company maintained by the Trustee funds
available for immediate use in the amount
transferred to the Trustee in accordance
with Settlement Procedure G.
K. The Trustee will send a copy of the
Book-Entry Note to the Company together
with a statement setting forth the
principal amount of Notes Outstanding as of
the related
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<PAGE> 27
Settlement Date after giving effect to such
transaction and all other offers to
purchase Notes of which the Company has
advised the Trustee but which have not been
settled.
L. The Presenting Agent will confirm the
purchase of such Note to the purchaser
either by transmitting to the Participant
with respect to such Note a confirmation
order through DTC's Participant Terminal
System or by mailing a written confirmation
to such purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by
the Company, Settlement Procedures "A"
through "L" set forth above shall be
completed as soon as possible but not later
than the respective times (New York City
time) set forth below:
Settlement
Procedure Time
A 11:00 a.m. on the trade date
B 12:00 noon on the trade date
C 2:00 p.m. on the trade date
D 3:00 p.m. on the Business Day
before Settlement Date
E 9:00 a.m. on Settlement Date F
10:00 a.m. on Settlement Date
G-H No later than 2:00 p.m. on
Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date]
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<PAGE> 28
If a sale is to be settled more than one Business
Day after the trade date, Settlement Procedures A,
B, and C may, if necessary, be completed at any time
prior to the specified times on the first Business
Day after such trade date. In connection with a sale
which is to be settled more than one Business Day
after the trade date, if the initial interest rate
for a Floating Rate Note is not known at the time
that Settlement Procedure A is completed, Settlement
Procedures B and C shall be completed as soon as
such rates have been determined, but no later than
11:00 a.m. and 2:00 p.m., New York City time,
respectively, on the second Business Day before the
Settlement Date. Settlement Procedure I is subject
to extension in accordance with any extension of
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect
on the Settlement Date.
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Company shall notify the Trustee and
the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message
to such effect by no later than 2:00 p.m., New York
City time, on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle: If the Trustee has not entered an SDFS deliver order
with respect to a Book-Entry Note pursuant to
Settlement Procedure G, then upon written request
(which may be evidenced by facsimile transmission)
of the Company the Trustee shall deliver to DTC,
through DTC's Participant Terminal System, as soon
as practicable a withdrawal message instructing DTC
to debit
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<PAGE> 29
such Note to the participant account of the Trustee
maintained at DTC. DTC will process the withdrawal
message, provided that such participant account
contains a principal amount of the Book-Entry Note
representing such Note that is at least equal to the
principal amount to be debited. If withdrawal
messages are processed with respect to all the Notes
represented by a Book-Entry Note, the Trustee will
mark such Book-Entry Note "cancelled", make
appropriate entries in its records and send such
cancelled Book-Entry Note to the Company. The CUSIP
number assigned to such Book-Entry Note shall, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned. If
withdrawal messages are processed with respect to a
portion of the Notes represented by a Book-Entry
Note, the Trustee will exchange such Book-Entry Note
for two Book-Entry Notes, one of which shall
represent the Book-Entry Notes for which withdrawal
messages are processed and shall be cancelled
immediately after issuance, and the other of which
shall represent the other Notes previously
represented by the surrendered Book-Entry Note and
shall bear the CUSIP number of the surrendered
Book-Entry Note.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Presenting Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing Settlement Procedures G
and H, respectively. Thereafter,
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<PAGE> 30
the Trustee will deliver the withdrawal message and
take the related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than default by the Presenting
Agent to perform its obligations hereunder or under
the Distribution Agreement, the Company will
reimburse the Presenting Agent on an equitable basis
for its loss of the use of funds during the period
when the funds were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event of
a failure to settle with respect to a Note that was
to have been represented by a Book-Entry Note also
representing other Notes, the Trustee will provide,
in accordance with Settlement Procedures D and E,
for the authentication and issuance of a Book-Entry
Note representing such remaining Notes and will make
appropriate entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Certificated Notes, other than Index Notes and
Multi-Currency Notes, will be issued in
denominations of $1,000 and integral multiples
thereof. Index Notes and Multi-Currency Notes will
be issued in the denominations specified in a
related Multi-Currency and Indexed Note Prospectus
Supplement and Pricing Supplement.
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Interest: Each Certificated Note will bear interest in
accordance with its terms. Interest will begin to
accrue on the Original Issue Date of a Certificated
Note for the first Interest Payment Period and on
the most recent Interest Payment Date to which
interest has been paid for all subsequent Interest
Payment Periods. Each payment of interest shall
include interest accrued to, but excluding, the date
of such payment. Interest payments in respect of
Fixed Rate Certificated Notes will be made
semiannually on June 15 and December 15 of each year
and at Maturity. However, the first payment of
interest on any Certificated Note issued between a
Regular Record Date and an Interest Payment Date
will be made on the Interest Payment Date following
the next succeeding Regular Record Date. The Regular
Record Date with respect to any Interest Payment
Date for a Fixed Rate Certificated Note shall be the
May 31 or November 30 preceding such Interest
Payment Date. Interest at Maturity will be payable
to the person to whom the principal is payable.
Except as provided in Part I under "Calculation of
Interest", the Interest Payment Date for a Floating
Rate Certificated Note will be, in the case of
Floating Rate Notes which reset daily, weekly or
monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and
December of each year as specified in the applicable
Pricing Supplement; in the case of Floating Rate
Notes which reset quarterly, on the third Wednesday
of March, June, September and December of each year;
in the case of Floating Rate Notes which reset
semiannually, on the third Wednesday of the two
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<PAGE> 32
months of each year specified in the applicable
Pricing Supplement; or, in the case of Eleventh
District Cost of Funds Rate Notes, on the first
Business Day of each month or the first Business Day
of each March, June, September or December as
specified in the applicable Pricing Supplement and
in the case of Floating Rate Notes which reset
annually, on the third Wednesday of the month
specified in the applicable Pricing Supplement; and,
in each case, at Maturity. The Regular Record Date
with respect to a Floating Rate Note shall be the
date 15 calendar days (whether or not a Business
Day) preceding an Interest Payment Date.
Notwithstanding the above, in the case of Floating
Rate Certificated Notes having interest rates which
reset daily or weekly, interest payments shall
include accrued interest from, and including, the
date of issue or from, but excluding, the last date
in respect of which interest has been accrued and
paid, as the case may be, through, and including,
the Regular Record Date, except that at Maturity the
interest payable will include interest accrued to,
but excluding, the date of Maturity. For additional
special provisions relating to Floating Rate
Certificated Notes, see the Prospectus Supplement.
Payments of Principal
and Interest: Upon presentment and delivery of the Certificated
Note, the Trustee or the Company's duly authorized
agent will pay the principal amount of each
Certificated Note at Maturity and the final
installment of interest in immediately available
funds. All interest payments in U.S. dollars on a
Certificated Note, other than interest due at
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<PAGE> 33
Maturity, will be made by check drawn on the Trustee
or the Company's duly authorized agent and mailed by
such Trustee or agent to the person entitled thereto
as provided in the Certificated Note. However, the
Registered Owners (as hereinafter defined) of ten
million dollars or more in aggregate principal
amount of the same series of Certificated Notes
(whether having identical or different terms and
provisions) shall be entitled to receive payments of
interest, other than at Maturity, by wire transfer
of immediately available funds if appropriate wire
transfer instructions have been received in writing
by the appropriate Trustee or such agent not less
than 16 days prior to the applicable Interest
Payment Date.
For special provisions relating to Multi-Currency
Notes and Indexed Notes, see the related
Multi-Currency and Indexed Note Prospectus
Supplement.
The Trustee will provide monthly to the Company a
list of the principal and interest in each currency
to be paid on Certificated Notes maturing in the
next succeeding month. Such Trustee or agent will be
responsible for withholding taxes on interest paid
as required by applicable law, but shall be relieved
from any such responsibility if it acts in good
faith and in reliance upon an opinion of counsel.
Certificated Notes presented to the Trustee or the
Company's duly authorized agent at Maturity for
payment will be cancelled by such Trustee or agent.
All cancelled Certificated Notes held by such
Trustee shall be destroyed, and the Trustee shall
furnish to the
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<PAGE> 34
Company a certificate with respect to such
destruction.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note purchased through the Agents, as
agents, shall be as follows:
A. Each Agent will advise the Company by
telephone of the following Settlement
information with regard to each
Certificated Note:
1. Exact name in which the
Certificated Note is to be
registered (the "Registered
Owner").
2. Exact address or addresses of the
Registered Owner for delivery,
notices and payments of principal,
premium, if any, and interest.
3. Taxpayer identification number of
the Registered Owner.
4. Principal amount of the
Certificated Note.
5. Denomination of the Certificated
Note.
6. Fixed Rate Notes:
(a) interest rate
Floating Rate Notes:
(a) interest rate basis or
bases;
(b) initial interest rate;
(c) spread or spread
multiplier, if any;
(d) initial interest reset
date;
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<PAGE> 35
(e) interest reset dates;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest rates, if
any;
(j) minimum interest rate, if
any;
(k) alternate rate event
spread; and
(l) interest determination
dates
Indexed Notes:
(a) specified currency;
(b) indexed currency; and
(c) base rate of exchange.
8. Currency or currency unit in which
the Certificated Note is to be
denominated.
9. Price to public of the
Certificated Note.
10. Settlement Date (Original Issue
Date).
11. Stated Maturity.
12. Redemption provisions, if any:
(a) Initial Redemption Date
(b) Initial Redemption
Percentage
(c) Annual Redemption
Percentage Reduction
13. Optional Repayment Date(s), if any.
14. Net proceeds to the Company.
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<PAGE> 36
15. Presenting Agent's commission.
B. The Company shall provide to the Trustee by
telecopy or other method acceptable to the
Trustee the above Settlement information
with respect to each Certificated Note
received from the Agents, the name of the
Presenting Agent and shall confirm to the
Trustee that the principal amount of Notes,
including such Certificated Note, issued as
of the relevant Settlement Date shall not
exceed the limit with respect to the
principal amount of Notes specified in the
most recent Company Order delivered to the
Trustee pursuant to Section 303 of the
Indenture. The Company also shall cause the
Trustee or its duly appointed agent to
issue, authenticate and deliver
Certificated Notes in accordance with the
Settlement Procedures Timetable set forth
below. The Company also shall provide to
the Trustee and the Presenting Agent a copy
of the applicable Pricing Supplement. The
Company also shall provide to the Trustee
and the Presenting Agent a copy of a
Multi-Currency and Indexed Note Supplement,
if applicable.
C. The Trustee or its duly appointed agent
will complete and authenticate the
Certificated Notes, including the
Guarantee, in forms approved by the Company
and the Guarantor, as the case may be.
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<PAGE> 37
D. With respect to each trade, the Trustee
will deliver the Certificated Notes and one
photocopy thereof to the applicable
Presenting Agent at the following
addresses:
Merrill Lynch & Co., Money Market
Clearance, 55 Water Street, 3rd Floor,
N.S.C.C. Window, New York, New York 10041,
Attention: Al Mitchell
Telephone: (212) 558-2405
Telecopy: (212) 558-2457
Credit Suisse First Boston Corporation,
Five World Trade Center, New York, New York
10048, Attention: Paul Riley.
Chase Securities, Inc., 55 Water street,
Room 226, Window 17 and 18, New York, New
York, 10011
Telephone: (212) 638-6787
Telecopy: (212) 638-5618
First Chicago Capital Markets, Inc. c/o
Bankers Trust, 16 Wall Street, 5th Floor,
Window 51, New York, New York, 10015,
Attention: Jim Murray,
Telephone: (212) 618-2370.
The Trustee will keep Stub 1. The
Presenting Agent will acknowledge receipt
of the Certificated Note through a broker's
receipt and will keep the photocopy.
Delivery of the Certificated Note will be
made only against such acknowledgment of
receipt.
Upon determination that the Certificated
Note, including the related Guarantee, has
been authorized, delivered and completed as
aforementioned, the Presenting Agent will
wire
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<PAGE> 38
the net proceeds of the Certificated Note
after deduction of its applicable
commission to the Company pursuant to
standard wire instructions given by the
Company.
E. The Presenting Agent will deliver the
Certificated Note, the related Guarantee
endorsed thereon, as well as a copy of the
Prospectus and any applicable Pricing
Supplement or Supplements received from the
Trustee, to the purchaser against payment
in immediately available funds.
F. The Trustee will send a photocopy of the
Certified Note to the Company.
Settlement Procedures
Timetable: For offers to purchase Certificated Notes accepted
by the Company, Settlement Procedures "A" through
"F" set forth above shall be completed on or before
the respective times set forth below:
Settlement
Procedure Time
A-B 3:00 PM on Business Day prior to
Settlement
C-D 2:15 PM on Settlement Date
E 3:00 PM on Settlement Date
F 5:00 PM on Settlement Date
Failure to Settle: In the event that a purchaser of a Certificated Note
from the Company shall either fail to accept
delivery of or make payment for a Certificated Note
on the date fixed for settlement, the Presenting
Agent will forthwith notify the
- 38 -
<PAGE> 39
Trustee and the Company by telephone, confirmed in
writing, and return the Certificated Note to such
Trustee.
The Trustee or the Company's duly authorized agent,
upon receipt of the Certificated Note from the
Presenting Agent, will immediately advise the
Company, and the Company will promptly arrange to
credit the account of the Presenting Agent in an
amount of immediately available funds equal to the
amount previously paid by the Presenting Agent in
settlement for the Certificated Note. Such credits
will be made on the Settlement Date if possible, and
in any event not later than the Business Day
following the Settlement Date; provided that the
Company has received notice on the same day. If such
failure shall have occurred for any reason other
than failure by the Presenting Agent to perform its
obligations hereunder or under the Distribution
Agreement, the Company will reimburse the Presenting
Agent on an equitable basis for its loss of the use
of funds during the period when the funds were
credited to the account of the Company. Immediately
upon receipt of the Certificated Note in respect of
which the failure occurred, the Trustee or the
Company's duly authorized agent will cancel and
destroy the Certificated Note, make appropriate
entries in its records to reflect the fact that the
Certificated Note was never issued, and accordingly
notify in writing the Company.
-39-
<PAGE> 1
EXHBIT 10(c)
POPULAR, INC.
INTEREST CALCULATION AGENCY AGREEMENT
INTEREST CALCULATION AGENCY AGREEMENT between Popular, Inc. a
Puerto Rico corporation (the "Issuer"), and The First National Bank of Chicago,
dated as of May 23, 1997.
PRELIMINARY STATEMENT
1. The Issuer proposes to issue and sell its Medium-Term
Notes, Series 3 (the "Notes") from time to time under, and pursuant to, the
terms of an Indenture, dated as of February 15, 1995, as supplemented by the
First Supplemental Indenture dated as of May 8, 1997 (together 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
<PAGE> 2
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:
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
-2-
<PAGE> 3
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.
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
-3-
<PAGE> 4
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, or in respect of, any action
taken, omitted to be taken or suffered by it in reliance upon any Floating Rate
Note,
-4-
<PAGE> 5
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.
-5-
<PAGE> 6
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
-6-
<PAGE> 7
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 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.
-7-
<PAGE> 8
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 reasonable legal fees and expenses) relating to or arising
-8-
<PAGE> 9
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
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<PAGE> 10
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:
Popular, Inc.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: Chief Financial Officer
Facsimile: (787) 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
-10-
<PAGE> 11
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.
-11-
<PAGE> 12
IN WITNESS WHEREOF, this Agreement has been entered into the
day and year first above written.
POPULAR, INC.
By: /s/ Jorge A. Junquera
--------------------------------------
Name: Jorge A. Junquera
Title: Senior Executive Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Steven M. Wagner
--------------------------------------
Name: Steven M. Wagner
Title: Vice President
-12-
<PAGE> 1
EXHIBIT 10(d)
POPULAR NORTH AMERICA, INC.
INTEREST CALCULATION AGENCY AGREEMENT
INTEREST CALCULATION AGENCY AGREEMENT between Popular North
America, Inc., a Delaware corporation (the "Issuer"), and The First National
Bank of Chicago, dated as of May 23, 1997.
PRELIMINARY STATEMENT
1.The Issuer proposes to issue and sell its Medium-Term Notes,
Series D (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, and by the Second Supplemental
Indenture, dated as of May 8, 1997 (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
<PAGE> 2
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:
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
-2-
<PAGE> 3
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.
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
-3-
<PAGE> 4
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
-4-
<PAGE> 5
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
-5-
<PAGE> 6
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 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
-6-
<PAGE> 7
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 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
-7-
<PAGE> 8
resignation, the resigning Calculation Agent may petition any court of
competent jurisdiction for the appointment of a successor Calculation Agent.
Upon termination by either party pursuant to the provisions of this Section,
the Calculation Agent shall be entitled to the payment of any compensation owed
to it by the Issuer hereunder and to the reimbursement of all reasonable
expenses, disbursements and advances incurred or made by the Calculation Agent
in connection with the services rendered by it hereunder, as provided by
Section 4 hereof.
Section 9. Appointment of Successor Calculation Agent. Any
successor Calculation Agent appointed by the Issuer or by a court following
termination of this Agreement pursuant to the provisions of Section 8 hereof
shall execute and deliver to the Calculation Agent and to the Issuer an
instrument accepting such appointment, and thereupon such successor Calculation
Agent shall, without any further act or instrument, become vested with all the
rights, immunities, duties and obligations of the Calculation Agent, with like
effect as if originally named as Calculation Agent
-8-
<PAGE> 9
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
-9-
<PAGE> 10
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:
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To the Issuer:
Popular North America, Inc.
c/o Popular, Inc.
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention:Chief Financial Officer
Facsimile:(787) 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
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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.
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IN WITNESS WHEREOF, this Agreement has been entered into the
day and year first above written.
POPULAR NORTH AMERICA, INC.
By: /s/ Jorge A. Junquera
----------------------------------
Name: Jorge A. Junquera
Title: President
THE FIRST NATIONAL BANK
OF CHICAGO
By: /s/ Steven M. Wagner
-----------------------------------
Name: Steven M. Wagner
Title: Vice President
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