<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PHH CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-0551284
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
11333 MCCORMICK ROAD
HUNT VALLEY, MARYLAND 21031
(410) 771-3600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
SAMUEL H. WRIGHT
PHH CORPORATION
11333 MCCORMICK ROAD
HUNT VALLEY, MARYLAND 21031
(410) 771-3600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER OF AGENT FOR SERVICE)
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COPIES TO:
VIRGINIA K. ADAMS ELLIOTT V. STEIN
PIPER & MARBURY L.L.P. WACHTELL, LIPTON, ROSEN & KATZ
1100 CHARLES CENTER SOUTH 51 WEST 52ND STREET
BALTIMORE, MARYLAND 21201 NEW YORK, NEW YORK 10019
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AGGREGATE AMOUNT OF
SECURITIES BEING AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT PRICE FEE
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<S> <C> <C> <C> <C>
Debt Securities........ $2,000,000,000* 100% $2,000,000,000 $689,655
</TABLE>
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* Or, if any such securities are issued at original issue discount, such
greater principal amount as shall result in an aggregate initial offering
price of $2,000,000,000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
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<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER , 1995
[LOGO OF PHH CORPORATION APPEARS HERE]
$2,000,000,000
PHH CORPORATION
MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 40 YEARS FROM DATE OF ISSUE
-----------
PHH Corporation (the "Company") may offer from time to time up to
$2,000,000,000 aggregate principal amount, or the equivalent thereof in
foreign currencies or currency units, of its Medium-Term Notes (the "Notes"),
subject to reduction as a result of the concurrent sale of other Debt
Securities of the Company. Each Note may be denominated or payable in U.S.
dollars or in a foreign currency, European Currency Units ("ECU") or such
other currency unit specified in the applicable Pricing Supplement (the
"Specified Currency"). The Notes will mature on any day from 9 months to 40
years from the date of issue, as selected by the initial purchaser and agreed
to by the Company. The specific interest rates and maturities of Notes sold
will be set forth in Pricing Supplements to this Prospectus Supplement.
Interest rates or interest rate formulas are subject to change by the Company
from time to time but no such change will affect any Note theretofore issued
or which the Company has agreed to sell. The Notes may be denominated in U.S.
dollars or in such foreign currencies or currency units or in amounts
determined by reference to an index as may be designated by the Company at the
time of the offering and set forth in a Pricing Supplement. Unless otherwise
indicated in the applicable Pricing Supplement, each Note will bear interest
at a fixed rate (a "Fixed Rate Note") or at a floating rate (a "Floating Rate
Note") determined by reference to the Commercial Paper Rate, the CD Rate, the
Federal Funds Effective Rate, LIBOR, the Treasury Rate, the Prime Rate or such
other base rate or interest rate formula as may be designated in any
accompanying Pricing Supplement. Except as described herein or in the
applicable Pricing Supplement, interest on each Fixed-Rate Note will accrue
from its issue date and will be payable February 15 and August 15 of each year
and at maturity. Interest on each Floating Rate Note will be payable on the
dates indicated therein and in the applicable Pricing Supplement. The Notes
will not be subject to redemption or repayment prior to their stated maturity
unless otherwise specified in the applicable Pricing Supplement. See
"Description of Notes."
The Notes will be issued in fully registered certificated form (a
"Certificated Note") or in the form of one or more fully registered global
notes (a "Global Note") in denominations of $1,000 and integral multiples of
$1,000 in excess thereof. Beneficial interest in Global Notes will be shown
on, and transfers thereof will be effected only through, records maintained by
The Depository Trust Company, as depositary (the "Depositary") and its
participants. See "Description of Notes--Global Notes."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT,
ANY PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENTS' DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(1)(2) COMPANY(2)(3)
-------------- ---------------------- -----------------------------
<S> <C> <C> <C>
Per Note... 100% .125%-.750% 99.875%-99.250%
Total(4)... $2,000,000,000 $2,500,000-$15,000,000 $1,997,500,000-$1,985,000,000
</TABLE>
(1) Notes may be sold at discounts from their principal amounts, if provided
for in the applicable Pricing Supplements.
(2) The Company will pay a commission to an Agent acting in its capacity as
agent of from .125% to .750%, depending upon the Note maturity, of the
principal amount of any Note sold with a maturity of up to 30 years.
Commissions on agency sales of Notes with maturities of more than 30 years
will be determined at the time of sale. The Company may also sell Notes to
an Agent acting in its capacity as principal at negotiated discounts for
resale to investors or other purchasers at varying prices related to
prevailing market prices at the time of resale, as determined by such
Agent. No commission will be payable on any sales made directly by the
Company. The Company has agreed to indemnify the Agents against certain
liabilities, including liabilities under the Securities Act of 1933, and
to reimburse the Agents for certain expenses.
(3) Before deduction of estimated expenses of the offering of $1,579,155.
(4) Or the equivalent thereof in foreign currencies or currency units.
-----------
The Notes are offered on a continuing basis by the Company through the
Agents, as set forth below, which have agreed to use best efforts to solicit
purchases of the Notes. The Company also may sell Notes to any Agent acting as
principal at negotiated discounts for resale to one or more investors or other
purchasers. The Company has the right to sell the Notes directly on its own
behalf and to appoint additional agents under the Distribution Agreement. The
Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes offered by this Prospectus Supplement will be sold or
that there will be a secondary market for the Notes. The Company reserves the
right to withdraw, cancel or modify the offering contemplated hereby without
notice. The Company or the Agents may reject any offer to purchase the Notes
in whole or in part. See "Supplemental Plan of Distribution."
CS First Boston
Goldman, Sachs & Co.
Merrill Lynch & Co.
J.P. Morgan Securities Inc.
The date of this Prospectus Supplement is October , 1995.
<PAGE>
IN CONNECTION WITH THE DISTRIBUTION OF NOTES UNDERWRITTEN BY AN AGENT ACTING
AS PRINCIPAL, SUCH AGENT MAY OVER-ALLOT OR EFFECT TRANSACTIONS IN THE NOTES
WITH A VIEW TO STABILIZING OR MAINTAINING THE MARKET PRICE OF THE NOTES AT
LEVELS OTHER THAN THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE AND,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF NOTES
The following description of the terms of the Medium-Term Notes of PHH
Corporation (the "Company") offered hereby (the "Notes") supplements, and to
the extent inconsistent therewith replaces, insofar as such description
relates to the Notes, the description of the general terms and provisions of
the Debt Securities set forth in the Prospectus, to which description
reference is hereby made. The following description of the Notes will apply
unless otherwise specified in an applicable Pricing Supplement.
GENERAL
The Notes are to be issued under an Indenture dated as of March 1, 1993 (the
"Indenture"), between the Company and The First National Bank of Chicago, as
trustee (the "Trustee"), as described more fully in the Prospectus. The Notes
offered hereby constitute a portion of a single series of Debt Securities for
purposes of the Indenture, unlimited in aggregate principal amount. The
aggregate principal amount in which the Notes offered hereby may be issued is
limited to $2,000,000,000 (or the equivalent thereof in foreign currencies or
currency units), less an amount equal to the gross proceeds from the sales of
other Debt Securities (other than the Notes) pursuant to the Registration
Statement of which the accompanying Prospectus is a part. The statements
herein concerning the Notes and the Indenture do not purport to be complete.
They are qualified in their entirety by reference to the provisions of the
Indenture, including the definitions of certain terms used herein without
definition. A copy of the Indenture has been filed with the Securities and
Exchange Commission.
The Notes will be unsecured obligations of the Company and will rank prior
to all subordinated indebtedness of the Company and on a parity with all other
unsecured indebtedness of the Company. As of July 31, 1995, the aggregate
amount of outstanding indebtedness to which the Notes will rank pari passu,
including medium-term notes, commercial paper and commercial bank notes, was
$3,781,628,000. Although the Notes will not be subordinated in right of
payment to any other indebtedness of the Company, the right of the Company and
its creditors, including the holders of Notes, under general equitable
principles, to participate in any distributions of assets of any subsidiary of
the Company upon the Company's liquidation or reorganization or otherwise is,
unless there is a substantive consolidation of the Company with its
subsidiaries, likely to be subject to the prior claims of creditors of such
subsidiary, except to the extent that claims of the Company itself as a
creditor may be recognized. As of July 31, 1995, the aggregate amount of
outstanding indebtedness of subsidiaries of the Company was $301,619,000.
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities
may be issued in one or more series up to the aggregate principal amount which
may be authorized from time to time by the Company. As of July 31, 1995, there
were $1,486,000,000 aggregate principal amount of medium-term notes
outstanding. The Company may, from time to time, without the consent of the
holders of the Notes (the "Holders"), provide for the issuance of additional
Notes or other Debt Securities under the Indenture. As used herein, "Holder"
includes the Depositary with respect to Global Notes.
The Notes will be offered on a continuing basis and will mature on any day
from 9 months to 40 years from the date of issue, as selected by the initial
purchaser and agreed to by the Company (the "Stated Maturity"), and may be
subject to redemption or repayment prior to Stated Maturity at the price or
prices specified in the applicable Pricing Supplement. "Maturity" means, when
used with respect to the Notes, the
S-2
<PAGE>
date on which the principal of such Note or an installment of principal
becomes due and payable as therein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise. Unless
otherwise specified in any applicable Pricing Supplement, each Note will bear
interest at either (a) a fixed rate or (b) a floating rate determined by
reference to an interest rate formula or a Base Rate (as hereinafter defined),
which may be adjusted by adding or subtracting the Spread and/or multiplying
by the Spread Multiplier (as hereinafter defined).
Each Note will be issued initially as either a Global Note or a Certificated
Note and, if denominated in U.S. dollars, in denominations of $1,000 and
integral multiples of $1,000 in excess thereof or, if denominated in any
foreign currency or currency units, the dollar equivalent in such foreign
currency or currency units. For a description of the denominations of Notes
denominated or payable in a Specified Currency other than U.S. dollars (a
"Foreign Currency Note") see "Special Provisions Relating to Foreign Currency
Notes." Certificated Notes may be transferred or exchanged at the offices of
the Trustee, 14 Wall Street, Eighth Floor, Window 2, New York, New York 10005.
Global Notes may be transferred or exchanged through a participating member of
the Depositary. See "Global Notes" below. No service charge will be made for
any registration of transfer or exchange of Certificated Notes, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
Interest rates or interest rate formulas are subject to change by the
Company from time to time but no such change will affect any Note theretofore
issued or which the Company has agreed to sell.
Unless otherwise indicated in the applicable Pricing Supplement, the
Interest Payment Dates for Fixed Rate Notes shall be as described below under
"Fixed Rate Notes." The Interest Payment Dates for Floating Rate Notes shall
be as indicated in the applicable Pricing Supplement. Unless otherwise
specified in the applicable Pricing Supplement, each Regular Record Date for a
Fixed Rate Note or a Floating Rate Note will be the fifteenth day (whether or
not a Business Day) next preceding each Interest Payment Date.
The Notes are referred to in the accompanying Prospectus as the "Debt
Securities." For a description of the rights attaching to different series of
Debt Securities under the Indenture, see "Description of Debt Securities" in
the Prospectus attached hereto.
PAYMENT OF PRINCIPAL AND INTEREST
Payments of principal, premium, if any, and interest on Global Notes will be
made to the Depositary by wire transfer, either in same day funds or in next
day funds. See "--Global Notes" below. In the case of Certificated Notes,
principal, premium, if any, and interest will be payable, the transfer of the
Notes will be registrable, and Notes will be exchangeable for Notes bearing
identical terms and provisions at the offices of the Trustee, 14 Wall Street,
Eighth Floor, Window 2, New York, New York 10005; provided, however, that
payment of interest, other than interest at Maturity, may be made at the
option of the Company by check mailed to the address of the person in whose
name the applicable Note is registered at the close of business on the
relevant Regular Record Date (as hereinafter defined) as shown on the
applicable security register (which in the case of Global Notes will be a
nominee of the Depositary). Notwithstanding the foregoing, a holder of U.S.
$10,000,000 or more in aggregate principal amount of Notes of like tenor and
term (or a holder of the equivalent thereof in a Specified Currency other than
U.S. dollars) shall be entitled to receive interest payments (other than an
interest payment due at Maturity) by wire transfer of immediately available
funds to a designated account maintained in the United States, but only if
proper instructions have been received in writing by the Trustee on or prior
to the applicable Regular Record Date. Such instructions shall remain in
effect with respect to payments of interest made to such holder on subsequent
Interest Payment Dates unless revoked or changed by written instructions
received by the Trustee from such holder, provided that any such written
revocation or change which is received by the Trustee after a Regular Record
Date and before the related Interest Payment Date shall not be effective with
respect to the interest payable on such Interest Payment Date. Interest will
be payable on each date specified in the Note on which an installment of
interest is due and payable (an "Interest Payment Date") and at Maturity. If
the original issue date of a Note is between a Regular Record Date and the
related Interest Payment Date, the initial interest
S-3
<PAGE>
payment will be made on the Interest Payment Date following the next
succeeding Regular Record Date to the registered Holder on such next
succeeding Regular Record Date unless otherwise specified in the applicable
Pricing Supplement.
Unless otherwise specified in an applicable Pricing Supplement, interest
payments will be in the amount of interest accrued from and including the next
preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including the date of issue, if no interest has
been paid with respect to such Note), to but excluding the applicable Interest
Payment Date (an "Interest Accrual Period"). In the case of Certificated
Notes, payment of principal, premium, if any, and interest payable at Maturity
on each Certificated Note will be paid in immediately available funds against
presentation of the Certificated Note at the offices of the Trustee, 14 Wall
Street, Eighth Floor, New York, New York 10005; provided that the Certificated
Notes are presented to the Trustee in time for the Trustee to make such
payments in such funds in accordance with its normal procedures. Interest
payable at Maturity will be payable to the person to whom the principal of the
Note shall be paid.
"Business Day" means any day, other than a Saturday or Sunday, that meets
each of the following applicable requirements: the day is (a) not a legal
holiday or a day on which banking institutions are authorized or required by
law or regulation to be closed in The City of New York, (b) if the Note is
denominated or payable in a Specified Currency other than U.S. dollars, (i)
not a day on which banking institutions are authorized or required by law or
regulation to close in the major financial center of the country issuing the
Specified Currency (which in the case of ECU shall include the financial
center of each country that issues a component currency of the ECU) and (ii) a
day on which banking institutions in such financial center are carrying out
transactions in such Specified Currency and (c) with respect to LIBOR Notes
(as defined below), also a London Banking Day."London Banking Day" means any
day on which dealings on deposits in U.S. dollars are transacted in the London
interbank market.
REDEMPTION AND REPAYMENT
Unless otherwise specified in an applicable Pricing Supplement, the Notes
will not be redeemable prior to their Stated Maturity. If so specified in an
applicable Pricing Supplement with respect to a Note or Notes, such Note or
Notes will be redeemable on or after the date set forth in such Pricing
Supplement, either in whole or from time to time in part, at the option of the
Company, at a redemption price (the "Redemption Price") determined in
accordance with the following paragraph, together with interest accrued
thereon to but excluding the date of redemption, on notice given not more than
60 nor less than 30 days prior to the date of redemption.
The Redemption Price for each Note subject to redemption shall initially be
equal to a certain percentage (the "Initial Redemption Percentage") of the
principal amount of such Note to be redeemed and shall decline at each
anniversary of the Initial Redemption Date with respect to such Note by a
percentage (the "Annual Redemption Percentage Reduction") of the principal
amount to be redeemed until the Redemption Price is 100% of such principal
amount. The Initial Redemption Percentage and any Annual Redemption Percentage
Reduction with respect to each Note subject to redemption prior to Stated
Maturity will be fixed at the time of sale and set forth in the applicable
Pricing Supplement and in the applicable Note.
Unless otherwise specified in an applicable Pricing Supplement, the Notes
will not be subject to repayment at the option of the Holders. If so specified
in an applicable Pricing Supplement with respect to a Note or Notes, such Note
or 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 fixed at the time of sale and set forth in the applicable Pricing
Supplement and in the applicable Note (the "Optional Repayment Dates"). On any
Optional Repayment Date with respect to a Note, such Note will be repayable in
whole or in part at the option of the Holder thereof at a price equal to 100%
of the principal amount to be repaid, together with interest thereon payable
to the Optional Repayment Date, on notice given by such Holder to the Company
not more than 60 nor less than 30 days prior to the Optional Repayment Date.
S-4
<PAGE>
If a Note is represented by a Global Note, the Depositary's nominee will be
the Holder of such Note and therefore will be the entity through which the
beneficial owners of Global Notes may exercise a right to repayment. In order
to ensure that the Depositary's nominee will timely exercise a right to
repayment with respect to a particular Note, the beneficial owner of such Note
must instruct the broker or other direct or indirect participant through which
it holds an interest in such Note to notify the Depositary of its desire to
exercise a right to repayment. The Depositary would then notify the Trustee.
Different firms have different deadlines for accepting instructions from their
customers and, accordingly, each beneficial owner should consult the broker or
other direct or indirect participant through which it holds an interest in a
Global Note in order to ascertain the deadline by which such an instruction
must be given in order for timely notice to be delivered to the Depositary.
Unless otherwise specified in an applicable Pricing Supplement, the Notes
will not be subject to any sinking fund.
FIXED RATE NOTES
Unless otherwise specified in an applicable Pricing Supplement, each Fixed
Rate Note will bear interest from the date of issue at the annual rate stated
on the face thereof, payable semiannually on February 15 and August 15 of each
year and at Maturity, subject to certain exceptions. Unless otherwise
specified in an applicable Pricing Supplement, interest on the Fixed Rate
Notes will be computed on the basis of a 360-day year of twelve 30-day months.
Interest on the Fixed Rate Notes will be payable generally to the person in
whose name the Note is registered at the close of business on the Regular
Record Date. However, interest payable at Maturity will be payable to the
person to whom principal shall be payable.
If any Interest Payment Date or the Maturity of a Fixed Rate Note falls on a
day that is not a Business Day, the payment will be made on the next Business
Day as if it were made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest at a floating rate determined by
reference to a Base Rate or an interest rate formula specified in the
applicable Pricing Supplement. Any Floating Rate Note may also have either or
both of the following: (i) a maximum numerical interest rate limitation, or
ceiling, on the rate of interest which may accrue during any interest period,
and (ii) a minimum numerical interest rate limitation, or floor, on the rate
of interest which may accrue during any interest period. Interest on the
Floating Rate Notes will be determined by reference to a "Base Rate," which
may be: (a) the CD Rate in which case such Note will be a "CD Rate Note," (b)
the Commercial Paper Rate in which case such Note will be a "Commercial Paper
Rate Note," (c) the Federal Funds Effective Rate in which case such Note will
be a "Federal Funds Effective Rate Note," (d) LIBOR in which case such Note
will be a "LIBOR Note," (e) the Treasury Rate in which case such Note will be
a "Treasury Rate Note," (f) the Prime Rate in which case such Note will be a
"Prime Rate Note" or (g) such other Base Rate or interest rate formula as is
set forth in such Pricing Supplement. The applicable Pricing Supplement will
specify the interest rate formula or the Base Rate and the Index Maturity, the
Spread and/or Spread Multiplier, if any, and the maximum or minimum interest
rate limitation, if any, applicable to each Floating Rate Note. In addition,
such Pricing Supplement may contain information concerning the Calculation
Agent, Calculation Dates, Initial Interest Rate, Interest Determination Dates,
Interest Payment Period, Interest Payment Dates, Maturity, Regular Record
Dates, Interest Reset Dates, Interest Reset Period, and, if applicable, the
Initial Redemption Dates, the Initial Redemption Percentage, Annual Redemption
Percentage Reduction and Optional Repayment Date, with respect to such
Floating Rate Note. The "Index Maturity" is the period to maturity of an
instrument or obligation with respect to which the Base Rate is calculated.
The "Spread" is the number of basis points above or below the Base Rate
applicable to such Floating Rate Note, and the "Spread Multiplier" is the
percentage of the Base Rate applicable to the interest rate for such Floating
Rate Note. The Spread, Spread Multiplier, Index Maturity and other variable
terms of the Floating Rate Notes are subject to
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<PAGE>
change by the Company from time to time, but no such change will affect any
Floating Rate Note theretofore issued or as to which an offer to purchase has
been accepted by the Company.
Unless otherwise specified in an applicable Pricing Supplement, the rate of
interest on each Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semi-annually or annually (each an "Interest Reset Date"), as
specified in the applicable Pricing Supplement. Unless otherwise specified in
an applicable Pricing Supplement, the Interest Reset Date will be, in the case
of Floating Rate Notes which reset daily, each Business Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) which reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes which reset weekly,
the Tuesday of each week (except as provided below); in the case of Floating
Rate Notes which reset monthly, the third Wednesday of each month; in the case
of Floating Rate Notes which reset quarterly, the third Wednesday of each
February, May, August and November; in the case of Floating Rate Notes which
reset semi-annually, the third Wednesday of each of the two months of each
year specified in the applicable Pricing Supplement; and in the case of
Floating Rate Notes which reset annually, the third Wednesday of one month of
each year, as specified in the applicable Pricing Supplement; provided,
however, that, unless otherwise specified in an applicable Pricing Supplement,
the interest rate in effect from the date of issue to the first Interest Reset
Date with respect to a Floating Rate Note will be the Initial Interest Rate
(as set forth in the applicable Pricing Supplement). If any Interest Reset
Date for any Floating Rate Note would otherwise be a day that is not a
Business Day for such Floating Rate Note, the Interest Reset Date for such
Floating Rate Note shall be postponed to the next day that is a Business Day
for such Floating Rate Note, except that in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Reset
Date shall be the immediately preceding Business Day.
The interest rate applicable to each Interest Accrual Period commencing on
an Interest Reset Date will be the rate determined by reference to the
Interest Determination Date. The Interest Determination Date with respect to
(a) a Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date"), (b) a Federal Funds Effective Rate Note (the "Federal Funds Interest
Determination Date"), (c) a CD Rate Note (the "CD Interest Determination
Date") or (d) a Prime Rate Note (the "Prime Interest Determination Date") will
be the second Business Day prior to the Interest Reset Date for such Note. The
Interest Determination Date pertaining to an Interest Reset Date for a LIBOR
Note (the "LIBOR Interest Determination Date") will be the second London
Banking Day prior to such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day of the week in which such
Interest Reset Date falls on which Treasury bills would normally be auctioned.
Treasury bills are usually sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is usually held on the
following Tuesday, except that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Interest Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding week.
If an auction date shall fall on any Interest Reset Date for a Treasury Rate
Note, then such Interest Reset Date shall instead be the first Business Day
immediately following such auction date.
With respect to a Floating Rate Note, accrued interest is calculated by
multiplying the principal amount of a Note by an accrued interest factor. The
accrued interest factor is computed by adding the interest factors calculated
for each day from the date of issue, or from the last date for which interest
has been paid, as the case may be, to the date for which accrued interest is
being calculated. Unless otherwise specified in an applicable Pricing
Supplement, the interest factor for each such day is computed by dividing the
interest rate applicable to such date by 360, in the case of Commercial Paper
Rate Notes, CD Rate Notes, Federal Funds Effective Rate Notes, LIBOR Notes and
Prime Rate Notes, or by the actual number of days in the year, in the case of
Treasury Rate Notes.
All percentages resulting from any calculation with respect to Floating Rate
Notes will be rounded, if necessary, to the nearest one hundred-thousandth of
a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or resulting from such calculation
on Floating Rates Notes will be rounded to the nearest
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cent with one half cent being rounded upward. The Calculation Agent will, upon
the request of the Holder of any Floating Rate Note, provide the interest rate
then in effect and the interest rate which will become effective as a result
of a determination made with respect to the most recent Interest Determination
Date with respect to such Note. Unless otherwise specified in an applicable
Pricing Supplement, the Trustee will be the Calculation Agent for the Floating
Rate Notes. Unless otherwise specified in an applicable Pricing Supplement,
the Calculation Date, where applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day after
such Interest Determination Date or if any such day is not a Business Day, the
next succeeding Business Day and (ii) the Business Day next preceding the
relevant Interest Payment Date or Maturity, as the case may be.
In addition to any specified maximum interest rate which may be applicable
to any Floating Rate Note, the interest rate on the Notes will in no event be
higher than the maximum rate permitted by New York law, as the same may be
modified by United States law of general application. Under current New York
law, the maximum rate of interest on a loan to a corporation is 25% per annum
on a simple interest basis. The limit may not apply to Floating Rate Notes in
which $2,500,000 or more has been invested.
Each Floating Rate Note will bear interest from the date of issue at the
rates determined as described below until the principal thereof is paid or
otherwise made available for payment. Except as provided below, and unless
otherwise indicated in an applicable Pricing Supplement, interest will be
payable, 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
February, May, August and November 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 February, May, August and November 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; 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.
If any Interest Payment Date, other than an Interest Payment Date occurring
at Maturity, for any Floating Rate Note would fall on a day that is not a
Business Day with respect to such Note, such Interest Payment Date will be the
following day that is a Business Day with respect to such Note, except that in
the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Payment Date will be the immediately preceding
day that is a Business Day with respect to such LIBOR Note. If the Maturity of
any Floating Rate Note would fall on a day that is not a Business Day, the
payment of interest and principal (and premium, if any) may be made on the
next succeeding Business Day, and no interest on such payment will accrue for
the period from and after Maturity.
COMMERCIAL PAPER RATE NOTES
A Commercial Paper Rate Note will bear interest at the interest rate
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any) specified in the Commercial Paper Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) on that date of
the rate for commercial paper having the Index Maturity designated in the
applicable Pricing Supplement as such rate is 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
"Commercial Paper." In the event that such rate is not published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Commercial
Paper Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield (as defined below) on such Commercial Paper Interest
Determination Date of the rate for commercial paper having the Index Maturity
designated in the applicable Pricing Supplement 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"
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("Composite Quotations") under the heading "Commercial Paper." If by 3:00
P.M., New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the Commercial
Paper Rate for such Commercial Paper Interest Determination Date shall be
calculated by the Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates as of 11:00 A.M., New York City time, on
such Commercial Paper Interest Determination Date, of three leading dealers of
commercial paper in New York City selected by the Calculation Agent for
commercial paper having the Index Maturity designated in the applicable
Pricing Supplement placed for an industrial issuer whose bond rating is "AA,"
or the equivalent, from a nationally recognized securities rating agency;
provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date will be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded, if
necessary, to the nearest one hundred-thousandth of a percent) calculated in
accordance with the following formula:
Money Market Yield = D X 360
------------- X 100
360 - (D X M)
where "D" refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
CD RATE NOTES
A CD Rate Note will bear interest at the interest rate (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in the CD Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Interest Determination Date, the rate on such
date for negotiable certificates of deposit having the Index Maturity
designated in the CD Rate Note as published in H.15(519) under the heading
"CDs (Secondary Market)" or, if not so published by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such CD Interest Determination
Date, the CD Rate will be the rate on such CD Interest Determination Date for
negotiable certificates of deposit of the Index Maturity designated in the
applicable Pricing Supplement as published in Composite Quotations under the
heading "Certificates of Deposit." If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such CD Interest Determination Date, the CD
Rate will be calculated by the Calculation Agent and will be the arithmetic
mean of the secondary market offered rates as of 10:00 A.M., New York City
time, on such CD Interest Determination Date, of three leading nonbank dealers
in negotiable U.S. dollar certificates of deposit in New York City selected by
the Calculation Agent (after consultation with the Company) for negotiable
certificates of deposit of major United States money market banks of the
highest credit standing (in the market for negotiable certificates of deposit)
with a remaining maturity closest to the Index Maturity designated in the
applicable Pricing Supplement in a denomination of $5,000,000; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent
are not quoting as mentioned in this sentence, the CD Rate with respect to
such CD Interest Determination Date will be the CD Rate in effect on such CD
Interest Determination Date.
FEDERAL FUNDS EFFECTIVE RATE NOTES
A Federal Funds Effective Rate Note will bear interest at the interest rate
(calculated with reference to the Federal Funds Effective Rate and the Spread
and/or Spread Multiplier, if any) specified in the Federal Funds Effective
Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Effective Rate" means, with respect to any Federal Funds Interest
Determination Date, the rate on that date for Federal Funds as
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published in H.15(519) under the heading "Federal Funds (Effective)" or, if
not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Federal Funds Interest Determination Date, the Federal
Funds Effective Rate will be the rate on such Federal Funds Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not yet published in either
H.15(519) or Composite Quotations by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Federal Funds Interest Determination Date,
then the Federal Funds Effective Rate for such Federal Funds Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight Federal
Funds arranged by three leading brokers of Federal Funds transactions in New
York City selected by the Calculation Agent as of 9:00 A.M., New York City
time, on such Federal Funds Interest Determination Date; provided, however,
that if the brokers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Federal Funds Effective Rate with
respect to such Federal Funds Interest Determination Date will be the Federal
Funds Effective Rate in effect on such Federal Funds Interest Determination
Date.
LIBOR NOTES
A LIBOR Note will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified
in the LIBOR Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will be,
as specified in the applicable Pricing Supplement, either (a) the
arithmetic mean of the offered rates for deposits in U.S. dollars having
the Index Maturity designated in the applicable Pricing Supplement,
commencing on the second London Banking Day immediately following such
LIBOR Interest Determination Date, that appears 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 designated in the applicable Pricing Supplement,
commencing on the second London Banking Day immediately following such
LIBOR Interest Determination Date, that appears on the 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
in the applicable Pricing Supplement, LIBOR will be determined as if LIBOR
Telerate had been specified. If at least two such offered rates appear on
the Telerate Page 3750, 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 Telerate Page 3750, or if no rate appears on the Reuters Screen LIBO
Page, 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) On any LIBOR Interest Determination Date on which fewer than two
offered rates appear on the Reuters Screen LIBO Page as specified in (i)
(a) above, or on which no rate appears on the 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 are offered by four
major banks in the London interbank market selected by the Calculation
Agent (the "Reference Banks") at approximately 11:00 A.M., London time, on
such LIBOR Interest Determination Date to prime banks in the London
interbank market, having the Index Maturity designated 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. $1,000,000 that is representative
for a single transaction in such market at
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such time. The Calculation Agent will request the principal London office
of each of such Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBOR in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of such quotations.
If fewer than two quotations are provided, LIBOR in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of the rates quoted
by three major banks in New York City selected by the Calculation Agent at
approximately 11:00 A.M., New York City time, on such LIBOR Interest
Determination Date for loans in U.S. dollars to leading European banks,
having the Index Maturity designated in the applicable Pricing Supplement,
such loans 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. $1,000,000 that is representative
for a single transaction in such market at such time; provided, however,
that if the banks in New York City selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR with respect to
such LIBOR Interest Determination Date will be LIBOR in effect on such
LIBOR Interest Determination Date.
TREASURY RATE NOTES
A Treasury Rate Note will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier,
if any) specified in the Treasury Rate Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the
rate for the most recent auction of direct obligations of the United States
("Treasury Bills") having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the heading Pricing "U.S.
Government Securities--Treasury Bills--auction average (investment)" or, if
not so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Treasury Interest Determination Date, the auction average
rate (expressed as a bond equivalent, rounded, if necessary, to the nearest
one hundred-thousandth of a percent, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) as otherwise announced by
the U.S. Department of the Treasury. In the event that the result of the
auction of Treasury Bills having the Index Maturity designated in the
applicable Pricing Supplement is not otherwise reported as provided above by
3:00 P.M., New York City time, on such Calculation Date or, if no such auction
is held in a particular week, then the Treasury Rate shall be calculated by
the Calculation Agent and shall be a yield to Stated Maturity (expressed as a
bond equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Treasury
Interest Determination Date, of three leading primary U.S. securities dealers
selected by the Calculation Agent for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate with respect to such Treasury Interest
Determination Date will be the Treasury Rate in effect on such Treasury
Interest Determination Date.
PRIME RATE NOTES
A Prime Rate Note will bear interest at the interest rate (calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier, if any)
specified in the Prime Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime Interest Determination Date, the rate
set forth on such date in H.15(519) under the heading "Bank Prime Loan." In
the event that such rate is not published prior to 9:00 A.M. New York City
time, on the Calculation Date pertaining to such Prime Interest Determination
Date, then the Prime Rate will be determined by the Calculation Agent and will
be the arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen USPRIME1 Page (as defined below) as
such bank's prime rate or base lending
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rate as in effect for that Prime Interest Determination Date. If fewer than
four such rates but more than one such rate appear on the Reuters Screen
USPRIME1 Page for the Prime Interest Determination Date, the Prime Rate will
be determined by the Calculation Agent and will 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 Interest
Determination Date by four major money center banks in New York City selected
by the Calculation Agent. If fewer than two such rates appear on the Reuters
Screen USPRIME1 Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in New York City by the appropriate
number of substitute banks or trust companies organized and doing business
under the laws of the United States, or any State thereof, having total equity
capital of at least U.S. $500,000,000 and being subject to supervision or
examination by federal or state authority, selected by the Calculation Agent
to provide such rate or rates; provided, however, that if the banks selected
as aforesaid are not quoting as mentioned in this sentence, the Prime Rate
will be the Prime Rate in effect on such Prime 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
the USPRIME1 page on that service for the purpose of displaying prime rates or
base lending rates of major United States banks).
FOREIGN CURRENCY AND INDEX-LINKED NOTES
If any Note is not to be denominated in U.S. dollars, certain provisions
with respect thereto will be set forth in a foreign currency Pricing
Supplement which will indicate the Specified Currency in which the principal,
premium, if any, and interest with respect to such Note are to be paid, along
with any other terms relating to the Specified Currency. The Pricing
Supplement also will provide specific historic exchange rate information,
certain currency risks relating to the specific currencies selected, certain
investment considerations and certain additional tax considerations.
Amounts due on a Note in respect of principal, premium, if any, and interest
may be determined with reference to (a) a currency exchange rate or rates, (b)
a securities or commodities exchange index, (c) the value of a particular
security or commodity or (d) any other index or indices (any such Note being
herein referred to as an "Index-Linked Note"). The Pricing Supplement relating
to an Index-Linked Note will set forth the method by and terms on which the
amount of principal payable at Stated Maturity (or upon redemption or
repayment, if applicable) and interest, premium or the amortized face amount,
if any, will be determined, the tax consequences to holders of Index-Linked
Notes, a description of certain risks associated with investments in Index-
Linked Notes and other information relating to such Index-Linked Notes.
An investment in Notes indexed, as to principal or interest or both, to one
or more values of currencies (including exchange rates between currencies),
commodities or interest rate indices entails significant risks that are not
associated with similar investments in a conventional fixed-rate debt
security. If the interest rate of such a Note is so indexed, it may result in
an interest rate that is less than that payable on a conventional fixed-rate
debt security issued at the same time, including the possibility that no
interest will be paid, and, if the principal amount of such a Note is so
indexed, the principal amount payable at Maturity may be less than the
original purchase price of such Note if allowed pursuant to the terms of such
Note, including the possibility that no principal will be paid. The secondary
market for such Notes will be affected by a number of factors independent of
the creditworthiness of the issuer and the value of the applicable currency,
commodity or interest rate index, including the volatility of the applicable
currency, commodity or interest rate index, the time remaining to the maturity
of such Notes, the amount outstanding of such Notes and market interest rates.
The value of the applicable currency, commodity or interest rate index depends
on a number of interrelated factors, including economic, financial and
political events, over which the Company has no control. Additionally, if the
formula used to determine the principal amount or interest payable with
respect to such Notes contains a multiple or leverage factor, the effect of
any change in the applicable currency, commodity or interest rate index will
be increased. The historical experience of the relevant currencies,
commodities or interest rate indices should not be taken as an indication of
future performance of such currencies, commodities or interest rate indices
during the term of any Note. The credit ratings assigned to the Company's
medium-term note program are a reflection of
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the Company's credit status, and are not a reflection of the potential impact
of the factors discussed above, or any other factors, on the market value of
the Notes. Accordingly, prospective investors should consult their own
financial and legal advisors as to the risks entailed by an investment in such
Notes and the suitability of such Notes in light of their particular
circumstances.
GLOBAL NOTES
The Notes may be issued in whole or in part in the form of one or more fully
registered Notes (each, a "Global Note") which will be deposited with, or on
behalf of, the Depositary and registered in the name of the Depositary's
nominee. Except as set forth below, a Global Note may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any nominee to a successor of the
Depositary or a nominee of such successor. The Depositary currently only
accepts securities which have a specified currency of U.S. dollars.
The Depositary has advised the Company and the Agents that it is a limited-
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Depositary was created to hold
securities for its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including
the Agents), banks, trust companies, clearing corporations and certain other
organizations, some of which (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. Persons who are not participants may beneficially own securities
held by the Depositary only through participants.
Upon the issuance by the Company of Notes represented by a Global Note, the
Depositary will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Notes represented by such Global Note
to the accounts of participants. The accounts to be credited shall be
designated by the Agents or by the Company, if such Notes are offered and sold
directly by the Company.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within
90 days, the Company will issue Notes in certificated form in exchange for
each Global Note. In addition, the Company may at any time determine not to
have Notes represented by one or more Global Notes, and, in such event, will
issue Notes in certificated form in exchange for the Global Note or Notes
representing such Notes. In any such instance, an owner of a beneficial
interest in a Global Note will be entitled to physical delivery in
certificated form of Notes equal in principal amount to such beneficial
interest and to have such Notes registered in its name. Notes so issued in
certificated form will be issued in denominations of $1,000 or any amount in
excess thereof which is an integral multiple of $1,000 and will be issued in
fully registered form only.
For a more complete description of Global Notes, see "Description of Debt
Securities--Global Securities" in the accompanying Prospectus.
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars and payments of principal of, premium, if
any, and interest on the Notes will be made in U.S. dollars.
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The following provisions shall apply to Foreign Currency Notes. Such
provisions are in addition to, and to the extent inconsistent therewith
replace, the description of general terms and provisions of the Notes set
forth in the attached Prospectus and elsewhere in this Prospectus Supplement.
Foreign Currency Notes are issuable in registered form only, without
coupons. The denominations for particular Foreign Currency Notes will be
specified in the applicable Pricing Supplement.
Unless otherwise provided in the applicable Pricing Supplement, payment of
the purchase price of Foreign Currency Notes will be made in immediately
available funds.
Unless otherwise indicated in the applicable Pricing Supplement, all
currency and currency unit amounts used and resulting from calculations
relating to currencies for a Foreign Currency Note will be rounded to the
nearest one-hundredth of a unit (with five one-thousandths of a unit being
rounded upwards).
CURRENCIES
Unless otherwise specified in the applicable Pricing Supplement, purchasers
are required to pay for Foreign Currency Notes in the Specified Currency. At
the present time there are limited facilities in the United States for the
conversion of U.S. dollars into foreign currencies or currency units and vice
versa, and banks generally do not offer non-U.S. dollar checking or savings
account facilities in the United States. However, if requested on or prior to
the third Business Day preceding the date of delivery of the Notes, or by such
other day as determined by the Agent which presented the offer to purchase
such Notes to the Company, such Agent is prepared to arrange for the
conversion of U.S. dollars into the Specified Currency set forth in the
applicable Pricing Supplement to enable the purchasers to pay for the Notes.
Each such conversion will be made by the applicable Agent on such terms and
subject to such conditions, limitations and charges as the applicable Agent
may from time to time establish in accordance with its regular foreign
exchange practices. All costs of exchange will be borne by the purchasers of
the Notes.
The Foreign Currency Notes provide that, in the event of an official
redenomination of a foreign currency or currency unit, the obligations of the
Company with respect to payments on Notes denominated or payable in such
foreign currency or currency unit shall, in all cases, be deemed immediately
following such redenomination to provide for payment of that amount of
redenominated currency representing the amount of such obligations immediately
before such redenomination. In no event, however, shall any adjustment be made
to any amount payable under the Notes as a result of any change in the value
of such foreign currency or currency unit relative to any other currency due
solely to fluctuations in exchange rates. See "Foreign Currency Risks--
Exchange Rates and Exchange Controls."
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
The principal of, premium, if any, and interest on Foreign Currency Notes
are payable by the Company in the Specified Currency. However, the agent
appointed by the Company (the "Exchange Rate Agent") will convert all payments
of principal of, premium, if any, and interest on Foreign Currency Notes to
U.S. dollars. Unless otherwise specified in the applicable Pricing Supplement,
the Holder of a Foreign Currency Note may elect to receive such payments in
the Specified Currency as described below.
Unless the Holder has elected otherwise or unless otherwise specified in the
applicable Pricing Supplement, payment in respect of a Foreign Currency Note
shall be made in U.S. dollars based upon the exchange rate as determined by
the Exchange Rate Agent based on the quotation for such non-U.S. dollar
currency or composite currency appearing at approximately 11:00 a.m., New York
City time, on the second Business Day preceding the applicable date of
payment, on the bank composite or multi-contributor pages of the Telerate
Monitor Foreign Exchange Service (or, if such service is not then available to
the Exchange Rate Agent, the Reuters Monitor Foreign Exchange Service or, if
neither is available, on a comparable display or in a comparable manner as the
Company and the Exchange Rate Agent shall agree), for the first three banks
(or two, if three are not available),
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in chronological order, appearing on a list of banks agreed to by the Company
and the Exchange Rate Agent prior to such second Business Day, which are
offering quotes. The Exchange Rate Agent shall then select from among the
selected quotations in a manner specified in the applicable Pricing
Supplement. If fewer than two bids are available, then such conversion will be
based on the Market Exchange Rate (as defined below) as of the second Business
Day preceding the applicable payment date. "Market Exchange Rate" means the
noon U.S. dollar buying rate in The City of New York for cable transfers of
the relevant currency as certified for customs purposes by the Federal Reserve
Bank of New York. If no Market Exchange Rate as of the second Business Day
preceding the applicable payment date is available, payments will be made in
the Specified Currency, unless such Specified Currency is unavailable due to
the imposition of exchange controls or to other circumstances beyond the
Company's control, in which case payment will be made as described below under
"Payment Currency." All currency exchange costs will be borne by the Holders
of such Notes by deductions from such payments.
Unless otherwise specified in the applicable Pricing Supplement, a Holder of
Foreign Currency Notes may elect to receive payment of the principal of,
premium, if any, and interest on the Notes in the Specified Currency by
transmitting a written request for such payment to the principal office of the
Trustee, 14 Wall Street, Eighth Floor, New York, New York 10005, on or prior
to the Regular Record Date or at least fifteen days prior to Maturity, as the
case may be. Such request may be in writing (mailed or hand delivered) or by
cable, telex or other form of facsimile transmission. A Holder of a Foreign
Currency Note may elect to receive payment in the Specified Currency for all
principal, premium, if any, and interest payments and need not file a separate
election for each payment. Such election will remain in effect until revoked
by written notice to the Trustee, 14 Wall Street, Eighth Floor, New York, New
York 10005, but written notice of any such revocation must be received by the
Trustee on or prior to the Regular Record Date or at least fifteen days prior
to Maturity, as the case may be. Holders of Foreign Currency Notes whose
Foreign Currency Notes are to be held in the name of a broker or nominee
should contact such broker or nominee to determine whether and how an election
to receive payments in the Specified Currency may be made.
Interest on Foreign Currency Notes paid in U.S. dollars will be paid in the
manner specified in the attached Prospectus and this Prospectus Supplement for
interest on Notes denominated in U.S. dollars. Interest on Foreign Currency
Notes paid in the Specified Currency will be paid by a check drawn on an
account maintained at a bank outside the United States, unless other
arrangements have been made. The principal and premium, if any, of Foreign
Currency Notes, together with interest accrued and unpaid thereon, due at
Maturity will be paid in immediately available funds against presentation of
such Foreign Currency Notes at the offices of the Trustee, 14 Wall Street,
Eighth Floor, New York, New York 10005.
PAYMENT CURRENCY
Except as set forth below, if payment in respect of a Foreign Currency Note
is required to be made in a Specified Currency and such currency is
unavailable due to the imposition of exchange controls or other circumstances
beyond the Company's control, or is no longer used by the government of the
country issuing such currency or for the settlement of transactions by public
institutions of or within the international banking community, then all
payments due on that due date in respect of such Foreign Currency Note shall
be made in U.S. dollars. The amount so payable on any date in such Specified
Currency shall be converted into U.S. dollars at the Market Exchange Rate, on
the date of such payment. In the event such Market Exchange Rate is not then
available, the Company will be entitled to make payments in U.S. dollars (i)
if such Specified Currency is not a composite currency, on the basis of the
most recently available Market Exchange Rate for such Specified Currency or
(ii) if such Specified Currency is a composite currency, in an amount
determined by the Exchange Rate Agent to be the sum of the results obtained by
multiplying the number of units of each component currency of such composite
currency, as of the most recent date on which such composite currency was
used, by the Market Exchange Rate for such component currency on the second
Business Day prior to such payment date (or if such Market Exchange Rate is
not then available, by the most recently available Market Exchange Rate for
such component currency).
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If payment in respect of a Foreign Currency Note is required to be made in
ECU and ECU are unavailable due to the imposition of exchange controls or
other circumstances beyond the Company's control, or are no longer used in the
European Monetary System, then all payments due on that date in respect of
such Foreign Currency Note shall be made in U.S. dollars. The amount so
payable on any date in ECU shall be converted into U.S. dollars at a rate
determined by the Exchange Rate Agent as of the second Business Day prior to
the date on which such payment is due on the following basis. The component
currencies of the ECU for this purpose (the "Components") shall be the
currency amounts that were components of the ECU as of the last date on which
ECU were used in the European Monetary System. The equivalent of ECU in U.S.
dollars shall be calculated by aggregating the U.S. dollar equivalents of the
Components. The U.S. dollar equivalent of each of the Components shall be
determined by the Exchange Rate Agent on the basis of the most recently
available Market Exchange Rate, or as otherwise indicated in the applicable
Pricing Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a
Component shall be divided or multiplied in the same proportion. If two or
more component currencies are consolidated into a single currency, the amounts
of those currencies as Components shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a
Component shall be replaced by amounts of such two or more currencies, each of
which shall have a value on the date of division equal to the amount of the
former component currency divided by the number of currencies into which that
currency was divided.
All determinations referred to above made by the Exchange Rate Agent shall
be subject to approval by the Company.
FOREIGN CURRENCY RISKS
THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO AND THE ATTACHED
PROSPECTUS DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN FOREIGN CURRENCY
NOTES AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS
MAY CHANGE FROM TIME TO TIME. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN SUCH
NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Governing Law and Judgments
The Notes will be governed by and construed in accordance with the laws of
the State of New York. Courts in the United States have not customarily
rendered judgments for money damages denominated or payable in any currency
other than the U.S. dollar. New York statutory law provides, however, that a
court shall render a judgment or decree in the foreign currency of the
underlying obligation and that the judgment or decree shall be converted into
U.S. dollars at the rate of exchange prevailing on the date of the entry of
the judgment or decree.
Exchange Rates and Exchange Controls
An investment in Foreign Currency Notes entails significant risks that are
not associated with a similar investment in a security denominated and payable
in U.S. dollars. Such risks include, without limitation, the possibility of
significant market changes in rates of exchange between the U.S. dollar and
the various foreign currencies, the possibility of significant changes in
rates of exchange between the U.S. dollar and the various foreign currencies
resulting from official redenomination with respect to a Specified Currency
and the possibility of the imposition or modification of foreign exchange
controls by either the United States or foreign governments. Such risks
generally depend on factors over which the Company has no control, such as
economic and political events and on the supply of and demand for the relevant
currencies. In recent years rates of exchange between the U.S. dollar and
certain foreign currencies have been volatile and such volatility may be
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expected in the future. Fluctuations in any particular exchange rate that have
occurred in the past are not necessarily indicative, however, of fluctuations
in the rate that may occur during the term of any Foreign Currency Note.
Depreciation of the Specified Currency of a Foreign Currency Note against the
U.S. dollar would result in a decrease in the effective yield of such Foreign
Currency Note below its coupon rate, and in certain circumstances could result
in a loss to the investor, on a U.S. dollar basis.
Governments have imposed from time to time, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency at an Interest Payment Date or at Maturity of a
Foreign Currency Note. There can be no assurance that exchange controls will
not restrict or prohibit payments of principal (and premium, if any) or
interest in any Specified Currency other than U.S. dollars. Even if there are
no actual exchange controls, it is possible that on an Interest Payment Date
or at Maturity of a particular Foreign Currency Note, the Specified Currency
for such Foreign Currency Note would not be available to the Company due to
circumstances beyond the control of the Company. In any such event, the
Company will make required payments in U.S. dollars on the basis described
herein.
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated or payable in a Specified Currency other than U.S. dollars or ECU
will not be sold in or to residents of the country issuing the Specified
Currency. The information set forth in this Prospectus Supplement and the
applicable Pricing Supplement is directed to prospective purchasers who are
United States residents, and the Company disclaims any responsibility to
advise prospective purchasers who are residents of countries other than the
United States with respect to any matters that may affect the purchase,
holding or receipt of payments of principal (and premium, if any) or interest
on the Notes. Such persons should consult their own counsel with regard to
such matters.
Pricing Supplements relating to Foreign Currency Notes will indicate the
Specified Currency in which the principal, premium, if any, and interest with
respect to such Note are to be paid, along with other terms relating to the
Specified Currency. The Pricing Supplement also will provide specific historic
exchange rate information, certain currency risks relating to the specific
currencies selected, certain investment considerations and certain additional
tax considerations. The information therein concerning exchange rates is
furnished as a matter of information only and should not be regarded as
indicative of the range of or trends in fluctuations in currency exchange
rates that may occur in the future.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material United States federal income tax
consequences of the ownership of Notes. It deals only with Notes held as
capital assets and not with special classes of Holders, such as dealers in
securities or currencies, life insurance companies, persons holding Notes as a
hedge against currency risks, and United States Holders (as defined below
under "United States Holders") whose functional currency is not the U.S.
dollar. In addition, this summary does not address the federal income tax
consequences of owning Indexed Notes. Such consequences will be addressed in
the applicable Pricing Supplement. The discussion is based upon the Internal
Revenue Code of 1986, as amended (the "Code") and regulations, rulings and
judicial decisions thereunder as of the date hereof. Such authorities may be
repealed, revoked or modified so as to produce federal income tax consequences
different from those discussed below.
PROSPECTIVE PURCHASERS OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IN THEIR
PARTICULAR SITUATIONS, AS WELL AS ANY CONSEQUENCES UNDER THE LAWS OF ANY OTHER
TAXING JURISDICTION.
UNITED STATES HOLDERS
For purposes of this discussion, a "United States Holder" means (i) a
citizen or resident of the United States, (ii) a partnership or corporation
created or organized in or under the law of the United States or of any
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State of the United States, (iii) a trust or estate the income of which is
subject to United States federal income tax regardless of its source, and (iv)
any other person that is subject to United States federal income tax on
interest income derived from a Note as a result of such income being
effectively connected with the conduct by such person of a trade or business
within the United States. The term also includes certain former citizens of
the United States whose income and gain on the Notes will be subject to U.S.
income tax.
Payments of Interest
Interest on a Note, whether payable in the Specified Currency or U.S.
dollars, that constitutes "qualified stated interest" (as defined below under
"Original Issue Discount") will be taxable to a United States Holder as
ordinary interest income at the time it is received or accrued, depending on
the Holder's method of accounting for tax purposes. In the case of a United
States Holder of a Foreign Currency Note using a cash method of accounting,
the amount of such interest income for United States federal income tax
purposes ("taxable interest") will be determined in the Specified Currency and
translated into U.S. dollars using the spot exchange rate on the date of
receipt, regardless of whether the interest is in fact paid in or converted to
U.S. dollars. In the case of a United States Holder of a Foreign Currency Note
using an accrual method of accounting, the amount of taxable interest will
depend on whether the Holder has made a valid election to use a "spot accrual
convention" pursuant to regulations under the Code. If the Holder has made
such an election, the amount of taxable interest will be measured in the
Specified Currency and translated into U.S. dollars using the spot exchange
rate in effect on the last day of the accrual period (or last day of a partial
accrual period ending on the last day of the Holder's taxable year); or where
interest is paid within five business days of such last day, the exchange rate
in effect on the date of receipt may be used. If the Holder has not made such
an election, the amount of taxable interest will be measured in the Specified
Currency and translated into U.S. dollars using the average exchange rate in
effect during the accrual period. A United States Holder of a Foreign Currency
Note on the accrual method will also recognize ordinary income or loss for
federal income tax purposes ("exchange gain or loss") upon actual or
constructive receipt of accrued interest income and upon the sale, retirement
or other disposition of a Note. Such exchange gain or loss, if any, will be
measured by subtracting the amount of taxable interest accrued in the manner
described above with respect to any accrual period from the U.S. dollar value
of the interest payment received attributable to that accrual period. The U.S.
dollar value of the interest payment received will be determined by
translating the units of Specified Currency received into dollars using the
spot exchange rate in effect on the date of receipt.
Original Issue Discount
General. A Note will generally be treated as having been issued at an
original issue discount (a "Discount Note") if the excess of its "stated
redemption price at maturity" over its issue price (defined as the first price
at which a substantial amount of the Notes are sold for money) equals or
exceeds 1/4 of 1 percent of such Note's stated redemption price at maturity
multiplied by the number of complete years to its Stated Maturity. "Stated
redemption price at maturity" is the total of all payments provided by the
Note that are not payments of "qualified stated interest." Generally,
"qualified stated interest" is stated interest that is unconditionally payable
in cash or property (other than debt instruments of the issuer) at least
annually in an amount equal to the product of the outstanding principal amount
of the Note and, with respect to a Fixed Rate Note, a single fixed rate of
interest (adjusted to account appropriately for any differing lengths of
intervals between payments). Qualified stated interest also includes stated
interest on certain variable rate debt instruments that satisfy certain
requirements of the Treasury regulations applicable to original issue discount
obligations (the "OID Regulations") if the interest is unconditionally payable
in cash or property (other than debt instruments of the issuer) at least
annually. A Floating Rate Note may or may not qualify as a variable rate debt
instrument under the OID Regulations depending on its interest rate formula
and other terms as set forth in the applicable Pricing Supplement.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to have original issue discount for federal income tax purposes,
with the result that the inclusion of interest in the Holder's income may vary
from the actual cash payments of interest on such Notes, generally
accelerating income for cash method
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taxpayers. Notice will be given in the applicable Pricing Supplement when the
Company determines that a particular Note will be a Discount Note. Unless an
applicable Pricing Supplement so indicates, Floating Rate Notes will not be
Discount Notes.
United States Holders of Discount Notes having a Stated Maturity of more
than one year from their date of issue will have to include original issue
discount in income before the receipt of cash attributable to such income. The
amount of original issue discount includible in income by a United States
Holder of a Discount Note is the sum of the daily portions of original issue
discount with respect to the Discount Note for each day during the taxable
year or portion of the taxable year in which it holds such Note ("accrued
original issue discount"). The daily portion is determined by allocating to
each day in any "accrual period" a pro rata portion of the original discount
allocable to that accrual period. The amount of original issue discount
allocable to an accrual period is the excess of (a) the product of the
Discount Note's adjusted issue price at the beginning of such accrual period
and its yield to maturity (determined on the basis of compounding at the close
of each accrual period and adjusted for the length of such period) over (b)
the sum of the qualified stated interest payments, if any, payable (or treated
as payable) on the Discount Note during the accrual period. Under the OID
Regulations, the "accrual period" may be of any length and may vary in length
over the term of the Note, provided that each accrual period is no longer than
one year and each scheduled payment of principal or interest occurs either on
the final day or on the first day of an accrual period. The "adjusted issue
price" of the Discount Note at the start of any accrual period is the sum of
the issue price of such Note plus the accrued original issue discount for each
prior accrual period minus any prior payments on the Note that were not
payments of qualified stated interest. The amount of original issue discount
includible in income is adjusted for any United States Holder which acquires a
Discount Note at a premium over its adjusted issue price (an "acquisition
premium"), but at an amount less than or equal to the sum of all amounts
payable on the instrument after the acquisition date (other than payments of
qualified stated interest).
Under the foregoing rules, United States Holders of Discount Notes will have
to include in income increasingly greater amounts of original issue discount
in successive accrual periods and in advance of any payment of cash related
thereto.
At the time the Company issues a Note, it will make a determination based on
the applicable Treasury Regulations and other authorities whether such Note
bears original issue discount. The Company is required to report the amount of
original issue discount accrued on Notes held of record by persons other than
corporations and other exempt Holders.
Optional Redemption of Discount Notes. Under the OID Regulations, if either
the Company or the Holder has an option to redeem, or cause the redemption of,
a Discount Note prior to its Stated Maturity, such option will be presumed to
be exercised if, by utilizing any date on which such Note may be redeemed as
its maturity date and the amount payable on such date in accordance with the
terms of the Note as its stated redemption price at maturity, the yield on
such Note would be (i) in the case of an option of the Company, lower than its
yield to maturity computed without assuming the option to be so exercised or
(ii) in the case of an option of the Holder, higher than its yield to maturity
computed without assuming the option to be so exercised. If such option is not
in fact exercised when presumed to be exercised, the Note would be treated
solely for original issue discount purposes as if it were redeemed, and a new
Note were issued, on the presumed exercise date for an amount equal to the
adjusted issue price of the original Note on such date. Notice will be given
in an applicable Pricing Supplement when the Company determines that a
particular Note will be deemed to have a maturity date for federal income tax
purposes prior to its Stated Maturity.
Short Term Discount Notes. Under the OID Regulations, a Note that matures
one year or less from the date of its issuance ("short-term Discount Note")
will be treated as having been issued at a discount ("short-term discount")
equal to the excess of the total principal and interest payments on the Note
over its tax basis (or its issue price if the United States Holder so elects).
In general, an individual or other cash basis United States Holder of a short-
term Discount Note is not required to accrue short-term discount for United
States federal
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income tax purposes unless it elects to do so. Accrual basis United States
Holders and certain other United States Holders, including banks and dealers
in securities, are required to accrue the short-term discount on short-term
Discount Notes on a straight-line basis unless an election is made to accrue
the short-term discount under the constant-yield method (based on daily
compounding). In the case of a United States Holder not required and not
electing to include the short-term discount in income currently, any gain
realized on the sale or retirement of the short-term Discount Note will be
ordinary income to the extent of the short-term discount accrued on a
straight-line basis (unless an election is made to accrue the short-term
discount under the constant-yield method) through the date of sale or
retirement. United States Holders who are not required and do not elect to
accrue the short-term discount on short-term Discount Notes will be required
to defer deductions for interest on borrowings allocable to short-term
Discount Notes in an amount not exceeding the deferred income until the
deferred income is realized.
Foreign Currency Notes. The amount of original issue discount for any
accrual period on a Discount Note that is a Foreign Currency Note will depend
on whether the Holder has made a valid election to use a "spot accrual
convention" pursuant to regulations under the Code. If the Holder has made
such an election, original issue discount will be determined in the Specified
Currency and translated into U.S. dollars using the spot exchange rate in
effect on the last day of the accrual period (or last day of a partial accrual
period ending on the last day of the Holder's taxable year); or where interest
is paid within five business days of such last day, the exchange rate in
effect on the date of receipt may be used. If the Holder has not made such an
election, original issue discount will be determined in the Specified Currency
and translated into U.S. dollars using the average exchange rate in effect
during the accrual period. A United States Holder of a Discount Note that is a
Foreign Currency Note will also recognize ordinary income or loss ("exchange
gain or loss") upon actual or constructive receipt of an amount attributable
to original issue discount (whether in connection with a payment of interest
or the sale or retirement of a Discount Note). Such exchange gain or loss, if
any, will be measured by subtracting the amount of original issue discount
with respect to the accrual period from the U.S. dollar value of the amount
received attributable to that accrual period. The U.S. dollar value of the
amount received will be determined by translating the units of Specified
Currency received into dollars using the spot exchange rate in effect on the
date of receipt.
Notes Issued at a Premium. A United States Holder that purchases a Note for
an amount in excess of the sum of all amounts payable on the Note after the
purchase date other than qualified stated interest will be considered to have
purchased the Note at a "premium" and will not be required to include any
original issue discount in income. A United States Holder may generally elect
to amortize the premium over the remaining term of the Note on a constant-
yield method. The amount amortized in any year will be treated as a reduction
of the United States Holder's interest income from the Note in such year. Any
such election shall apply to all debt instruments (other than debt instruments
the interest on which is excludable from gross income) held by the United
States Holder at the beginning of the first taxable year to which the election
applies and to any such debt instruments thereafter acquired by the United
States Holder, and is irrevocable without the consent of the Internal Revenue
Service (the "IRS"). Bond premium on a Note held by a United States Holder
that does not make such election will decrease the gain or increase the loss
otherwise recognized on a taxable disposition of the Note. If a Note is
callable by the Company before its Stated Maturity, the earlier call date will
be considered as the Maturity if it results in a smaller amortizable bond
premium attributable to the period of earlier call date. If a Note is not then
called on the earlier call date, any unamortized bond premium must then be
amortized to a succeeding call date or to Maturity. Certain of the Notes may
be callable prior to Stated Maturity. Holders therefore should consult with
their tax advisors to determine whether this rule will apply to their
individual situation.
Bond premium on a Foreign Currency Note will be computed in the applicable
Specified Currency. With respect to a United States Holder that elects to
amortize the premium, the amortizable bond premium will reduce interest income
measured in units of the Specified Currency. At the close of any period in
which a portion of the bond premium is amortized, exchange gain or loss (which
is generally ordinary income or loss) will be realized with respect to such
portion based on the difference between spot rates at the close of such period
and spot rates
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at the time of acquisition of the Foreign Currency Note. With respect to a
United States Holder that does not elect to amortize bond premium, the amount
of the bond premium will constitute a capital loss when the Note matures,
which may be offset or eliminated by exchange gain.
Market Discount. If a United States Holder purchases a Note for an amount
that is less than its "revised issue price" (defined as the sum of the issue
price of the Note and the aggregate amount of the original issue discount, if
any, includible in the gross income of all previous Holders of the Note,
determined without regard to any adjustment for a previous holder's
acquisition premium), the amount of the difference will be treated as "market
discount", unless such difference is less than a de minimis amount. The market
discount provisions of the Code generally require a Holder of a Note acquired
at a market discount to treat as ordinary interest income any gain recognized
on the disposition of such Note to the extent of the "accrued market discount"
on such Note at the time of disposition. If a Holder of a Note makes a gift of
such Note, any accrued market discount will be included in income as if such
Holder had sold the Note for a price equal to its fair market value. In
addition, if a Holder of a Note acquired at a market discount receives a
partial principal payment prior to Maturity, that payment may be treated as
ordinary income to the extent of the accrued market discount on the Note at
the time the payment is received and the accrued market discount on the Note
will be reduced by the amount of ordinary income so recognized. These rules
will not apply to the extent the Holder has, pursuant to an election, included
the accrued market discount in income as it accrued. Once made, the election
will apply to all market discount obligations acquired on or after the first
day of the first taxable year to which the election applies and may not be
revoked without the consent of the IRS. The adjusted basis of a Note will be
increased by any accrued market discount that is included in a Holder's income
pursuant to the election.
The amount of market discount that accrues while a Holder holds a Note will
be equal to the amount which bears the same ratio to the market discount on
the Note as the number of days on which the Holder holds the Note bears to the
number of days from the date the Holder acquires the Note through its Stated
Maturity. Alternatively, a Holder of a Note may elect to accrue market
discount on the basis of a constant-yield method, rather than the ratable-
accrual method described in the preceding sentence.
The market discount rules also provide that any Holder of a Note acquired at
a market discount may be required to defer the deduction of a portion of the
interest on any indebtedness incurred or maintained to purchase or carry the
Note until the Note is disposed of in a taxable transaction. This rule will
not apply if the Holder elects to include accrued market discount in income
currently.
Accrued market discount on Foreign Currency Notes will generally be
determined by translating the market discount determined in the Specified
Currency into U.S. dollars at the spot rate on the date the Foreign Currency
Note is retired or otherwise disposed of. If the United States Holder has
elected to accrue market discount currently, then the amount which accrues is
determined in the Specified Currency and then translated into U.S. dollars on
the basis of the average exchange rate in effect during the accrual period. A
United States Holder will recognize exchange gain or loss with respect to
market discount which is accrued currently upon the sale, retirement or other
disposition of the Foreign Currency Note measured in the same manner as
exchange gain or loss arising upon receipt of accrued interest on a Foreign
Currency Note, as described above.
ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT
Under the OID Regulations, a United States Holder may elect to treat all
interest on any Note as original issue discount and calculate the amount
includible in gross income under the constant-yield method described above.
For the purpose of this election, interest includes stated interest, short-
term discount, original issue discount, de minimis original issue discount,
market discount, de minimis market discount and unstated interest, as adjusted
by any amortizable bond premium or acquisition premium. If a United States
Holder makes this election for a Note with market discount or amortizable bond
premium, the election is treated as an election under the market discount or
amortizable bond premium provisions, as the case may be, and the electing
United States Holder will be required to include market discount in income
currently or amortize bond premium for all of the
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Holder's other debt instruments with market discount or amortizable bond
premium, as the case may be. The election is to be made for the taxable year
in which the United States Holder acquired the Note, and may not be revoked
without the consent of the IRS. United States Holders should consult with
their own tax advisors about this election.
PURCHASE, SALE AND RETIREMENT OF NOTES
A United States Holder's tax basis in a Note will be its U.S. dollar cost
(which, in the case of a Foreign Currency Note, will be the U.S. dollar value
of the purchase price on the date of purchase), increased by the amount of any
original issue discount, short-term discount or market discount included in
the United States Holder's income with respect to the Note and reduced by the
amount of any payments on a Note that are not qualified stated interest
payments and by the amount of any amortizable bond premium applied to reduce
interest on the Note. A United States Holder will generally recognize gain or
loss upon the sale or retirement of a Note equal to the difference between the
amount realized upon the sale or retirement and the tax basis in the Note. The
amount realized on a sale or retirement for an amount in Specified Currency
will be the U.S. dollar value of such amount on the date of sale or
retirement. Except (i) to the extent described above with respect to short-
term Discount Notes and Foreign Currency Notes, and (ii) to the extent
attributable to accrued but unpaid interest, market discount or currency gain
or loss (as described in the following paragraph), gain or loss recognized by
a United States Holder on the sale or retirement of a Note will generally be
capital gain or capital loss and such gain or loss will be long-term capital
gain or loss if the Note was held for more than one year.
Gain or loss recognized by a United States Holder on the sale or retirement
of a Foreign Currency Note that is attributable to changes in exchange rates
will be treated as ordinary income or loss and will be limited to the amount
of overall gain or loss realized on the disposition of the Note. Gain or loss
attributable to fluctuations in exchange rates will equal the difference
between the U.S. dollar value of the principal amount of the Note expressed in
units of the Specified Currency, determined at the spot exchange rate on the
date such payment is received or the Note is disposed of, and the U.S. dollar
value of the amount paid for the Note expressed in units of the Specified
Currency, determined at the spot exchange rate as of the date the Holder
acquired the Note.
EXCHANGE OF THE SPECIFIED CURRENCY
A United States Holder who purchases a Note with previously owned Specified
Currency will recognize exchange gain or loss at the time of purchase
attributable to the difference at the time of purchase, if any, between his
tax basis in such currency and the fair market value of the Note in U.S.
dollars on the date of purchase. Such gain or loss will be ordinary income or
loss.
Specified Currency received as interest on (or original issue discount with
respect to) a Foreign Currency Note or on the sale or retirement of a Note
will have a tax basis equal to its U.S. dollar value determined with reference
to the spot exchange rate at the time such interest is received or at the time
of such sale or retirement. Foreign currencies and currency units which are
purchased will generally have a tax basis equal to their U.S. dollar cost. Any
gain or loss realized on a sale or other disposition of a foreign currency or
currency unit (including its use to purchase the Foreign Currency Notes or
upon exchange for U.S. dollars) will be ordinary income or loss.
UNITED STATES ALIEN HOLDERS
Under present United States federal income and estate tax law and subject to
the discussion of backup withholding below:
(a) payments of principal, premium, if any, and interest (including
original issue discount) on the Notes to any Holder who is not a United
States Holder (a "United States Alien Holder") will not be subject to
United States federal income or withholding of federal income tax, provided
that in the case of interest or original issue discount, (i) such interest
or original issue discount is not effectively connected with a trade or
business conducted by the United States Alien Holder in the United States,
(ii) the United States Alien
S-21
<PAGE>
Holder does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to
vote, (iii) the United States Alien Holder is not a controlled foreign
corporation that is related to the Company through stock ownership, (iv)
the United States Alien Holder is not a bank that acquired the Notes
pursuant to a loan agreement made in the ordinary course of its trade or
business, and (v) either (A) the beneficial owner of the Note certifies to
the Company or its agent, under penalties of perjury, that he is not a
United States Holder and provides his name and address, or (B) a securities
clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and holds the Note, certifies to the Company or
its agent under penalties of perjury that such statement has been received
from the beneficial owner by it or by a financial institution and furnishes
the payor with a copy thereof;
(b) a United States Alien Holder will not be subject to United States
federal income or withholding of federal income tax on gain realized on the
sale, exchange or redemption of a Note unless (i) such gain is effectively
connected with a trade or business conducted by the United States Alien
Holder in the United States or (ii) in the case of a United States Alien
Holder who is an individual and holds a Note as a capital asset, such
Holder is present in the United States for 183 days or more in the taxable
year of sales and certain other requirements are met; and
(c) a Note held by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to United
States federal estate tax as a result of such individual's death if the
individual does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to
vote and the income on the Note, if received at the time of the
individual's death, would not have been effectively connected with a U.S.
trade or business of the individual.
BACKUP WITHHOLDING AND INFORMATION REPORTING
United States Holders
In general, information reporting requirements will apply to payments of
principal and interest on a Note and the proceeds of the sale of a Note before
Maturity within the United States to, and to the accrual of original issue
discount on a Note with respect to, non-corporate United States Holders. A 31%
"backup withholding" tax will apply to such payments and to payments with
respect to original issue discount if the United States Holder fails to
provide an accurate taxpayer identification number or to report all interest
and dividends required to be shown on its federal income tax returns. The
amount of original issue discount required to be reported by the Company may
not be equal to the amount of original issue discount required to be reported
as taxable income by a United States Holder of Discount Notes.
United States Alien Holders
Payment of principal, premium, if any, and interest made within the United
States by the Company or any of its Paying Agents are generally subject to
information reporting and possibly "backup withholding" at a rate of 31%.
Information reporting and backup withholding will not, however, apply to
payments made to a United States Alien Holder on a Note if the certification
described in clause (a)(v) above under "United States Alien Holders" is
received, provided in each case the payor does not have actual knowledge that
the Holder is a United States person.
Payment of the proceeds from the sale by a United States Alien Holder of a
Note made to or through a foreign office of a broker will not generally be
subject to information reporting or backup withholding. If, however, the
broker is a United States person, a controlled foreign corporation for United
States tax purposes or a foreign person 50% or more of whose gross income is
from a United States trade or business, such payments will not be subject to
backup withholding but will be subject to information reporting, unless (a)
such broker has documentary evidence in its records that the beneficial owner
is not a U.S. person and certain other conditions are met or (b) the
beneficial owner otherwise establishes an exemption. Temporary Treasury
regulations provide
S-22
<PAGE>
that the Treasury is considering whether backup withholding will apply with
respect to the proceeds of a sale that are not subject to backup withholding
under the current regulations. Under proposed Treasury regulations not
currently in effect, backup withholding will not apply to such payments absent
actual knowledge that the payee is a United States person. Payment of the
proceeds from a sale of a Note through the United States office of a broker is
subject to information reporting and backup withholding unless the Holder or
beneficial owner certifies as to its non-United States status or otherwise
establishes an exemption from information reporting and backup withholding.
Any amounts withheld under the backup withholding rules will be allowed as a
credit against such holder's U.S. federal income tax liability (any resulting
overpayment being refundable) provided the required information is furnished
to the IRS.
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by the Company through CS First
Boston Corporation, Goldman, Sachs & Co., Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc.
(collectively, the "Agents") who have agreed to use their best efforts to
solicit purchases of the Notes, and may be sold to the Agents for resale to
investors and other purchasers at varying prices related to prevailing market
prices at the time of resale, to be determined by the Agents. The Company
reserves the right to sell Notes directly on its own behalf in those
jurisdictions where it is authorized to do so. The Company will have the sole
right to accept offers to purchase Notes and may reject any proposed purchase
of Notes in whole or in part. The Agents will have the right to reject any
proposed purchase of Notes through them in whole or in part. Payment of the
purchase price of Notes will be required to be made in immediately available
funds in The City of New York. The Company will pay the Agents a commission
ranging from .125% to .750% of the principal amount of Notes with maturities
of up to 30 years sold through the Agents, depending upon the Stated Maturity,
and may also sell Notes to the Agents as principals at negotiated discounts.
Commissions on agency sales of Notes with maturities of more than 30 years
will be determined at the time of sale. No commission will be payable on any
sales made directly to the public by the Company.
In addition, the Agents may offer the Notes they have purchased as principal
to other dealers. The Agents may sell Notes to any dealer at a discount and,
unless otherwise specified in the applicable Pricing Supplement, such discount
allowed to any dealer may include all or a portion of the discount to be
received by such Agent from the Company. Unless otherwise indicated in the
applicable Pricing Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to any agency
sale of a Note of identical maturity, and may be resold by the Agent to
investors and other purchasers from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale or may be resold to certain
dealers as described above. After the initial public offering of Notes to be
resold to investors and other purchasers, the public offering price (in the
case of a fixed-price public offering), concession and discount may be
changed.
The Agents and any dealers to whom Notes are sold may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"). The Company has agreed to indemnify the Agents against
certain liabilities, including liabilities under the Securities Act, and will
reimburse the Agents for certain expenses.
The Notes are a new issue of securities with no established trading market.
The Agents have informed the Company that they intend to make a market in the
Notes, but are under no obligation to do so and such market making may be
terminated at any time. Therefore, no assurance can be given as to the
existence of a trading market in the Notes in the future.
One or more of the Agents or their affiliates may be customers of, extend
credit to, engage in transactions with or perform services for the Company in
the ordinary course of business.
S-23
<PAGE>
PHH CORPORATION
DEBT SECURITIES
PHH Corporation (the "Company") from time to time may offer up to
$2,000,000,000 aggregate principal amount, or the equivalent thereof in
foreign currencies or currency units, of its debt securities (the "Debt
Securities"). The Debt Securities will be offered as separate series in
amounts, at prices and on terms to be determined at the time of sale and to be
set forth in supplements to this Prospectus. The Company may sell Debt
Securities to or through underwriters, and also may sell Debt Securities
directly to other purchasers or through agents. See "Plan of Distribution."
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, denominations, maturity, interest
rate (which may be fixed or variable) and time of payment of interest, if any,
currency denomination, terms for redemption, if any, at the option of the
Company or the holder, terms for sinking or purchase fund payments, if any,
the identity of the Trustee and the Indenture under which the Debt Securities
are being issued, the initial public offering price, the names of, and the
principal amounts, if any, to be purchased by, underwriters or agents, if any,
the compensation of such underwriters or agents and the other terms in
connection with the offering and sale of the Debt Securities in respect of
which this Prospectus is being delivered (the "Offered Debt Securities"), are
set forth in the accompanying Prospectus Supplement, as supplemented from time
to time by Pricing Supplements (as so supplemented, the "Supplement").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SE-
CURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESEN-
TATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS OCTOBER , 1995
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at: Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549; Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661- 2511 and New York
Regional Office, 7 World Trade Center, Thirteenth Floor, New York, New York
10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Such reports and other information concerning
the Company can also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following documents of the
Company filed by it with the Commission pursuant to Section 13 of the Exchange
Act: (1) Annual Report on Form 10-K for the fiscal year ended April 30, 1995;
and (2) Quarterly Report on Form 10-Q for the period ended July 31, 1995. All
documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any document subsequently filed with the Commission which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any of the
documents incorporated by reference herein (other than exhibits to such
documents). Written or telephone requests should be directed to: PHH
Corporation, 11333 McCormick Road, Hunt Valley, Maryland 21031, Telephone
(410) 771-3600, Attention: Secretary.
THE COMPANY
PHH Corporation is a Maryland corporation. The Company's executive offices
are located at 11333 McCormick Road, Hunt Valley, Maryland 21031 (telephone
410-771-3600).
The Company provides a broad range of integrated management services,
expense management programs and mortgage banking services to more than 3,000
clients, including many of the world's largest corporations, as
2
<PAGE>
well as government agencies and affinity groups. Its primary business service
segments consist of vehicle management, real estate, and mortgage banking.
Vehicle management services consist primarily of the management, purchase,
leasing and resale of vehicles for corporate clients and government agencies,
including fuel and cost management programs and other fee-based services for
their vehicle fleets in the United States, Europe and Canada. Real estate
services consist primarily of the purchase, management and resale of homes for
transferred employees of corporate clients, financial institutions and
government agencies in the United States, Europe and Canada. Services also
include related fee-based services which provide assistance to transferring
employees and other fee-based real estate and consulting services. Mortgage
banking services consist primarily of the origination, sale and servicing of
residential first mortgage loans.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED APRIL 30,
ENDED ------------------------
JULY 31, 1995 1995 1994 1993 1992 1991
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges....... 1.51 1.60 1.64 1.47 1.34 1.25
</TABLE>
The ratios of earnings to fixed charges have been computed by dividing
earnings from continuing operations of the Company and its consolidated
subsidiaries before income taxes and fixed charges by the fixed charges. For
purposes of these ratios, fixed charges consist of interest, the interest
portion of "Costs, including interest, of carrying and reselling homes," and
that portion of rentals deemed representative of the appropriate interest
factor. Interest included in fixed charges consists of the amounts identified
as interest expense in the Company's consolidated statements of income, the
substantial portion of which represents interest on debt incurred to finance
leasing activities and mortgage banking activities, as well as interest costs
associated with home relocation services which are ordinarily recovered
through direct billings to clients and are included with "Costs, including
interest, of carrying and reselling homes" in the Company's consolidated
financial statements.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities will be used to
finance assets the Company manages for its clients and for general corporate
purposes. The Company's "Assets Under Management Programs," which currently
are represented by subsidiaries' net investment in leases and leased vehicles,
equity advances on homes and other assets under management programs, represent
the Company's principal financing requirement. Financing for Assets Under
Management Programs is also provided by banks and through the sale of
commercial paper by the Company.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Supplement may relate. The particular terms of the Debt Securities offered by
any Supplement (the "Offered Debt Securities") and the extent, if any, to
which such general provisions may apply to the Debt Securities so offered will
be described in the Supplement relating to such Offered Debt Securities.
The Debt Securities are to be issued under any of three substantially
identical indentures (each, an "Indenture" and collectively, the "Indentures")
between the Company and various trustees (each, a "Trustee" and collectively,
the "Trustees"). A copy of each Indenture has been filed with the Commission
as indicated in the Registration Statement. The following summaries of certain
provisions of the Indentures do not purport to be complete and are subject to,
and qualified in their entirety by reference to, all the provisions of the
Indentures, including the definitions therein of certain terms. Wherever
reference is made to particular sections or defined terms of the Indentures,
such sections or defined terms are incorporated herein by reference.
3
<PAGE>
GENERAL
The Debt Securities will be unsecured obligations of the Company and will
rank on a parity with all other unsecured and unsubordinated indebtedness of
the Company. The Debt Securities will be issued under (i) an Indenture dated
as of March 1, 1993, between the Company and The First National Bank of
Chicago, as Trustee, (ii) an Indenture dated as of May 1, 1992, between the
Company and The Bank of New York, as Trustee, or (iii) an Indenture dated as
of May 1, 1992 between the Company and Chemical Bank, as Trustee.
Unless a different place is specified in the applicable Supplement,
principal of and interest, if any, on the Debt Securities will be payable at
the corporate offices of the applicable Trustee; provided that payment of
interest may be made at the option of the Company by check or draft mailed to
the person entitled thereto.
The Indentures do not limit the aggregate principal amount of the Debt
Securities or of any particular series of Offered Debt Securities and provide
that Debt Securities may be issued thereunder from time to time in one or more
series.
Reference is made to the Supplement relating to the particular series of
Debt Securities offered thereby for the following terms of the Offered Debt
Securities: (1) the title of the Offered Debt Securities and the series of
which the Offered Debt Securities shall be a part; (2) any limit on the
aggregate principal amount of the Offered Debt Securities; (3) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Debt Securities will be issued; (4) the date or dates on which the
Offered Debt Securities will mature; (5) the rate or rates (which may be fixed
or variable) per annum at which the Offered Debt Securities will bear
interest, if any; (6) the date from which such interest, if any, on the
Offered Debt Securities will accrue, the dates on which such interest, if any,
will be payable, the date on which payment of such interest, if any, will
commence and the record dates for such interest payment dates, if any; (7) the
dates, if any, on which and the price or prices at which the Offered Debt
Securities will, pursuant to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund or to any purchase fund provisions, be
redeemed by the Company, and the other detailed terms and provisions of such
sinking and/or purchase funds; (8) the date, if any, after which and the price
or prices at which the Offered Debt Securities may, pursuant to any optional
redemption provisions, be redeemed at the option of the Company or of the
Holder thereof and the other detailed terms and provisions of such optional
redemption; (9) the denominations in which the Offered Debt Securities are
authorized to be issued; (10) whether the principal and/or interest of the
Offered Debt Securities is denominated in a currency other than United States
dollars; (11) the identity of the Trustee and the Indenture under which the
Offered Debt Securities are issued; and (12) any other terms of the Offered
Debt Securities.
Debt Securities bearing no interest or interest at a rate which at the time
of issuance is below market rates may be issued under the Indentures and
offered and sold at a substantial discount from the principal amount thereof.
Special federal income tax, accounting and other considerations applicable
thereto will be described in any Supplement relating to such Debt Securities.
The Debt Securities are not subordinated in right of payment to any other
indebtedness of the Company. However, the right of the Company and its
creditors, including the holders of Debt Securities, under general equitable
principles to participate in any distributions of assets of any subsidiary
upon the Company's liquidation or reorganization or otherwise is, unless there
is a substantive consolidation of the Company with its subsidiaries, likely to
be subject to the prior claims of creditors of such subsidiary, except to the
extent that claims of the Company itself as a creditor may be recognized.
The Debt Securities will be issued only in fully registered form without
coupons. Offered Debt Securities may be presented at the corporate offices of
the applicable Trustee for registration of transfer or exchange without
service charge, but the Company may require payment to cover taxes or other
governmental charges payable in connection therewith.
CERTAIN DEFINITIONS
The Indentures contain certain restrictions upon actions of the Company and
certain of its subsidiaries and related definitions of terms. The following
terms, among others, are defined in the Indentures as indicated:
4
<PAGE>
Assets Under Management Programs means those assets of the Company or any
Restricted Subsidiary, the value of which for financial reporting purposes
(i) is included in "Assets Under Management Programs" in the Company's most
recent consolidated balance sheet preceding the date of any determination
or (ii) upon any acquisition subsequent to the date of such balance sheet,
would be included in "Assets Under Management Programs" in a consolidated
balance sheet prepared as of the date of such acquisition, all determined
in accordance with generally accepted accounting principles applied on the
basis used from time to time in reports to the Company's stockholders.
Attributed Debt in respect of any Sale-Leaseback Transaction means, as of
the date of any determination, the lesser of (i) the sale price of the
property so leased multiplied by a fraction the numerator of which is the
remaining portion of the base term of the lease included in such
transaction and the denominator of which is the base term of such lease or
(ii) the total obligation (discounted to present value at 18% compounded
semiannually) of the lessee for rental payments (other than amounts
required to be paid on account of property taxes as well as maintenance,
repairs, insurance, water rates and other items which do not constitute
payments for property rights) during the remaining portion of the base term
of the lease included in such transaction.
Consolidated Tangible Net Worth means stockholders' equity of the Company
and consolidated subsidiaries (excluding the cost of any treasury shares),
including any amounts recorded in respect of preferred stock of the
Company, and less goodwill, as reflected in the Company's consolidated
balance sheet determined as of a date within 60 days preceding the date of
any determination, determined in accordance with generally accepted
accounting principles applied on the basis used from time to time in
reports to the Company's stockholders.
Debt means (i) any debt for money borrowed, (ii) any debt evidenced by a
note, debenture or other similar instrument, including purchase money
obligations given in connection with the acquisition of any property or
assets, including securities, (iii) any debt of others described in clauses
(i) and (ii) and guaranteed by the Company or a Restricted Subsidiary or
for which the Company or a Restricted Subsidiary is otherwise liable and
(iv) any amendment, renewal, extension or deferral or refunding of any Debt
described in clauses (i), (ii) and (iii).
Lien means any mortgage, pledge, lien, security interest or encumbrance.
Long-Term Debt means Debt that by its terms matures on a date more than
12 months after the date it was created or Debt that the obligor extends or
renews without the obligee's consent to a date more than 12 months after
the date the Debt was created.
Restricted Subsidiary means a Subsidiary substantially all of the
business of which is carried on within the United States, Canada or the
United Kingdom, or which is incorporated under the laws of any jurisdiction
in the United States, Canada or the United Kingdom.
Sale-Leaseback Transaction means an arrangement whereby the Company or a
Restricted Subsidiary now owns or hereafter acquires a property, transfers
it to a person and leases it back, except that such term shall not include
those arrangements in which the lease is (i) for a term of three years or
less or (ii) between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries.
Subsidiary means a corporation of which at least a majority of the
outstanding stock having voting power under ordinary circumstances to elect
directors is owned, directly or indirectly, by the Company, or one or more
other Subsidiaries or by the Company and one or more other Subsidiaries.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more fully registered global notes (the "Global Securities")
that will be deposited with, or on behalf of, a depositary identified in the
Prospectus Supplement relating to such series. Global Securities will be
issued in registered form and in either temporary or permanent form. Unless
and until it is exchanged for Debt Securities in definitive form, a Global
Security may not be transferred except as a whole by the depositary for such
Global Security to a nominee of
5
<PAGE>
such depositary or by a nominee of such depositary to such depositary or
another nominee of such depositary or by such depositary or any such nominee
to a successor of such depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will apply
to any depositary arrangements.
Upon the issuance of a Global Security, the depositary for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Debt Securities represented by such
Global Security. Such accounts shall be designated by the underwriters or
agents with respect to such Debt Securities or by the Company if such Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the depositary for such Global Security or its nominee
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on,
and the transfer of ownership will be effected only through, records
maintained by the depositary (with respect to participants' interests) for
such Global Security or by participants or persons that hold through
participants (with respect to beneficial owners' interests).
LIMITATIONS ON LIENS
The Company shall not, and it shall not permit any Restricted Subsidiary to,
incur any Lien to secure Debt without equally and ratably securing the Debt
Securities except (i) Liens incurred in the ordinary course of business to
secure Debt utilized to fund Assets Under Management Programs; (ii) Liens
existing prior to the date of the Indentures; (iii) Liens on property, Debt or
shares of stock of a corporation at the time it becomes a Restricted
Subsidiary or it is merged with or acquired by a Restricted Subsidiary or the
Company; provided that any such Lien does not extend to other property of the
Company or a Restricted Subsidiary; (iv) Liens to secure certain intracompany
Debt; (v) Liens on property at the time the Company or a Restricted Subsidiary
acquires the property; provided that any such Lien does not extend to other
property of the Company or a Restricted Subsidiary; (vi) Liens in favor of a
government securing Debt representing payments under contract or statute or
Debt incurred to finance construction of property subject to the Lien; (vii)
Liens placed upon property or assets of the Company or a Restricted Subsidiary
to secure Debt incurred to finance all or a portion of the purchase price
thereof or such cost of construction no more than one year after the later of,
the acquisition, completion of construction or commencement of operation of
such property or assets; provided that any such Lien does not extend to other
property of the Company or a Restricted Subsidiary; (viii) Liens on property
of a person at the time the person transfers or leases all or substantially
all of its assets to the Company or a Restricted Subsidiary; provided that any
such Lien does not extend to other property of the Company or a Restricted
Subsidiary; (ix) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any of the
above, with certain restrictions; or (x) Liens to secure Debt not otherwise
permitted under clauses (i) through (ix) if, at the time any such Liens are
incurred, the aggregate amount of Debt secured by such Liens plus the sum of
the aggregate Attributed Debt in respect of Sale-Leaseback Transactions
permitted under clause (iii) of "Limitations on Sale-Leaseback Transactions"
and the then outstanding principal amount of Debt permitted under the second
sentence of "Limitations on Certain Advances to Non-Subsidiaries" does not
exceed 10% of Consolidated Tangible Net Worth.
LIMITATIONS ON SALE-LEASEBACK TRANSACTIONS
The Company shall not, and it shall not permit any Restricted Subsidiary to,
enter into a Sale- Leaseback Transaction unless (i) the Company or a
Restricted Subsidiary could create a Lien under any of clauses (ii) through
(ix) of "Limitations on Liens" on the property or asset involved in the Sale-
Leaseback Transaction without equally and ratably securing the Debt
Securities, (ii) the Company or a Restricted Subsidiary within 180 days
applies an amount at least equal to the Attributed Debt in respect of such
Sale-Leaseback Transaction to retire Long-Term Debt of the Company or such
Restricted Subsidiary, provided, however, that the Company or a Restricted
Subsidiary may not receive credit for the retirement of (a) Debt of the
Company that is subordinated
6
<PAGE>
to the Debt Securities or Debt of a Subsidiary that is subordinated to other
Debt of such Subsidiary, (b) Debt retired at maturity or through mandatory
redemption or (c) Debt owed to the Company or a Subsidiary or (iii) the
Company or a Restricted Subsidiary could create Liens under clause (x) of
"Limitations on Liens" to secure Debt in a principal amount equal to the
Attributed Debt in respect to such Sale-Leaseback property without equally and
ratably securing the Debt Securities.
LIMITATIONS ON CERTAIN ADVANCES TO NON-SUBSIDIARIES
Neither the Company nor any Subsidiary will have outstanding any claims on
account of funds advanced by the Company or a Subsidiary by way of loans,
which, when made, were made to finance Assets Under Management Programs,
against any person other than a Subsidiary or the Company unless such
Subsidiary or the Company is primarily liable in respect thereof and the
assets so financed would continue to be included in Assets under Management
Programs on the Company's consolidated balance sheet as of the date of any
determination. This restriction will not apply if the principal amount of Debt
represented by claims otherwise prohibited as aforesaid does not exceed the
amount which, in addition to any amounts which at the time of determination
had been incurred under clause (x) of "Limitations on Liens" and clause (iii)
of "Limitations on Sale-Leaseback Transactions", could then be incurred by the
Company or a Restricted Subsidiary in compliance with clause (x) of
"Limitations on Liens."
RESTRICTIONS ON SALE, CONSOLIDATION OR MERGER
The Company will not consolidate with or merge into, or transfer all or
substantially all of its assets to any other corporation unless the resulting,
surviving or transferee corporation assumes all the obligations of the Company
under the Debt Securities and the Indentures. Thereafter, all such obligations
of the predecessor corporation shall terminate. If upon any such
consolidation, merger or transfer any property or assets of the Company or a
Restricted Subsidiary would become subject to a Lien securing Debt, then
before the consolidation, merger or transfer occurs, the Company shall secure
the Debt Securities equally and ratably with or prior to the Debt secured by
such Lien; provided, however, that the Company need not so secure the Debt
Securities if the Company or a Restricted Subsidiary could incur such Debt and
secure it by a Lien on the property of the Company or any Restricted
Subsidiary pursuant to the Indentures (see "Limitations on Liens") without
equally and ratably securing the Debt Securities.
MODIFICATION AND WAIVER
The Company is permitted, with the consent of the Holders of not less than a
majority in principal amount of the Outstanding Debt Securities (as defined in
the Indentures) of each series affected by the modification, to supplement the
Indentures to modify the rights of the Holders of the Debt Securities;
provided that no such modification shall, without the consent of the Holder of
each Outstanding Debt Security affected thereby, (i) change the Stated
Maturity of the principal, or any installment of principal or interest, of any
Outstanding Debt Security or change the Redemption Price; (ii) reduce the
principal amount of or the rate of interest on or any premium payable on
redemption of any Outstanding Debt Security; (iii) modify the manner of
determination of the rate of interest so as to affect adversely the interest
of a Holder or reduce the amount of the principal of an Original Issue
Discount Debt Security due and payable upon acceleration; (iv) change the
place or currency of payment of principal of or interest, if any, on any Debt
Security; (v) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security; or (vi) modify the provisions
relating to modification or amendment of the Indenture or to waiver of
compliance with or defaults of certain restrictive provisions of the
Indenture, except to increase the percentage in principal amount of
Outstanding Debt Securities required, or to provide that certain other
provisions of the Indenture cannot be modified or amended without the Consent
of the Holder of each Outstanding Debt Security affected thereby.
The Holders of a majority in principal amount of an Outstanding series of
Debt Securities may on behalf of all the Holders of such series waive the
compliance with certain covenants or waive any past default except (i) a
default in payment of the principal of (or premium, if any) or interest on any
Debt Security of such series or
7
<PAGE>
(ii) a default in respect of a covenant or provision of the Indenture which
cannot be amended or modified without the consent of the Holder of each
Outstanding Debt Security of such series affected.
EVENTS OF DEFAULT
The following shall constitute events of default with respect to Debt
Securities of any series then Outstanding: (i) default for a period of 30 days
in payment of any interest on the Debt Securities of such series when due;
(ii) default in payment of principal of (or premium, if any, on) the Debt
Securities of such series; (iii) default in the deposit of any sinking fund
payment, when and as due by the terms of a Debt Security of that series; (iv)
default in performance of any other covenant in the applicable Indenture with
respect to a series of Debt Securities, including violations of the covenants
described above relating to limitations on Liens, limitations on Sale-
Leaseback Transactions, limitations on certain advances to non-Subsidiaries
and restrictions on sales of assets and consolidation or merger of the
Company, continued for 90 days after written notice to the Company by the
Trustee or by the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series; and (v) certain events of
bankruptcy, insolvency or reorganization.
If an event of default with respect to Debt Securities of any series shall
occur and be continuing, the applicable Trustee or the holders of 25% in
principal amount of the Outstanding Debt Securities of such series may declare
the principal and accrued interest of all of the Debt Securities of that
series to be due and payable immediately. The Company will comply with
applicable tender offer rules under the Exchange Act in the event that the
occurrence of an event of default results in the repurchase of Debt
Securities.
Each Indenture provides that the Trustee will, within 90 days after the
occurrence of a default under such Indenture, give to Holders of the series of
Debt Securities with respect to which a default has occurred notice of all
uncured defaults known to it but, except in the case of a default in the
payment of principal (including any sinking fund payment) or premium, if any,
or interest on or Redemption Price (if called for redemption) of a series of
Debt Securities with respect to which such default has occurred, the Trustee
shall be protected in withholding such notice if it in good faith determines
that the withholding of such notice is in the interest of such Holders.
Each Indenture contains a provision entitling the Trustee, subject to the
duty of such Trustee during default to act with the required standard of care,
to be indemnified by the Holders of a series of Debt Securities with respect
to which a default has occurred before proceeding to exercise any right or
power under the appropriate Indenture at the request of such Holders. Subject
to such right of indemnification, each Indenture provides that the Holders of
a majority in principal amount of the Outstanding Debt Securities of such
series may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
upon the Trustee.
The Company will be required to furnish to the Trustees annually a statement
as to the fulfillment by the Company of all of its obligations under the
Indentures.
The general provisions of the Indentures do not afford holders of the Debt
Securities protection in the event of a highly leveraged or other transaction
involving the Company that may adversely affect holders of the Debt
Securities. Any covenants or other provisions included in a supplement or
amendment to the Indenture for the benefit of the holders of any particular
series of Debt Securities will be described in the applicable Prospectus
Supplement.
CONCERNING THE TRUSTEE
The Company maintains general banking and credit relations with the Trustees
in the ordinary course of business.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. The
distribution of the Debt Securities may be effected from time to time
8
<PAGE>
in one or more transactions at a fixed price or prices (which may be changed
from time to time), at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Each
Supplement will describe the method of distribution of the Offered Debt
Securities.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters under the
Securities Act and any discounts or commissions received by them and any
profit on the resale of Debt Securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
underwriter or agent will be identified and any such compensation will be
described in the Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled
to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the Supplement, the Company will authorize underwriters
or other persons acting as the Company's agents to solicit offers by certain
institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (1) the purchase of
the Offered Debt Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject, and (2)
if the Offered Debt Securities are also being sold to dealers acting as
principals for their own account, the dealers shall have purchased such
Offered Debt Securities not sold for delayed delivery. The underwriters and
such other agents will not have any responsibility in respect of the validity
or performance of such contracts.
LEGAL MATTERS
The validity of each issue of Debt Securities will be passed upon for the
Company by Piper & Marbury L.L.P. and certain legal matters will be passed
upon for the underwriters or agents by Wachtell, Lipton, Rosen & Katz.
Attorneys at the firm of Piper & Marbury currently own 775 shares of the
Company's common stock.
EXPERTS
The financial statements and schedules included in the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 1995, which are
incorporated by reference in this Prospectus, have been audited by KPMG Peat
Marwick LLP, independent certified public accountants, to the extent and for
the periods indicated in their report thereon, and are incorporated herein in
reliance upon the report of KPMG Peat Marwick LLP and the authority of said
firm as experts in accounting and auditing.
9
<PAGE>
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMA-
TION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUP-
PLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICI-
TATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED
IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL, OR THE SOLICITATION OF AN
OFFER TO BUY, SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SO-
LICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, IN ANY CIRCUM-
STANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED
BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF SUCH INFORMATION.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Description of Notes....................................................... S-2
Special Provisions Relating to Foreign Currency Notes...................... S-12
Certain Federal Income Tax Considerations.................................. S-16
Supplemental Plan of Distribution.......................................... S-23
<CAPTION>
PROSPECTUS
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 2
Ratio of Earnings to Fixed Charges......................................... 3
Use of Proceeds............................................................ 3
Description of Debt Securities............................................. 3
Plan of Distribution....................................................... 8
Legal Matters.............................................................. 9
Experts.................................................................... 9
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[LOGO OF PHH CORPORATION APPEARS HERE]
$2,000,000,000
PHH Corporation
Medium-Term Notes
PROSPECTUS SUPPLEMENT
CS First Boston
Goldman, Sachs & Co.
Merrill Lynch & Co.
J.P. Morgan Securities Inc.
, 1995
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be borne by the
Company in connection with the issuance and distribution of the securities
being registered hereunder, other than commissions.
<TABLE>
<S> <C>
Registration fee............................................... $ 689,655
Transfer agent and registrar fees and expenses................. 60,000
Trustee fees and expenses...................................... 33,500
Printing and engraving......................................... 57,000
Legal fees and expenses........................................ 90,000
Accounting fees and expenses................................... 32,000
Blue Sky filing fees and expenses.............................. 25,000
Rating agency fees............................................. 564,000
Miscellaneous expenses......................................... 28,000
----------
Total...................................................... $1,579,155
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
1. Charter, By-Law and Statutory Provisions
Article VII, Section 5 of the charter of the Company provides that the
Company shall indemnify its directors and officers to the full extent provided
by the general laws of the State of Maryland now or hereafter in force.
Article VII, Section 6 of the by-laws of the Company relating to
indemnification of directors and officers provides for indemnification in
accordance with the charter of the Company.
2. Contract Provisions
The Company expects to enter into selling agency agreements, distribution
agreements and underwriting agreements with selling agents and underwriters,
pursuant to which such selling agents and underwriters will agree to indemnify
officers, directors and other persons controlling the Company against certain
losses, claims, damages and liabilities arising out of untrue statements or
omissions in the Company's Registration Statement or related Supplements in
reliance upon information furnished by such selling agents and underwriters
for use therein.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL SCHEDULES.
(a) Exhibits
<TABLE>
<C> <S>
1 --Proposed Form of Distribution Agreement.
4(a)(i) --Proposed Form of Indenture between The First National Bank of
Chicago and the Company dated as of March 1,1993 (filed as
Exhibit 4(a)(i) to Form S-3 Registration Statement (Registration
No. 33-59376) and incorporated by reference herein).
4(a)(ii) --Form of Indenture between The Bank of New York and the Company
dated as of May 1, 1992 (filed as Exhibit 4(a)(iii) to Form S-3
Registration Statement (Registration No. 33-48125) and
incorporated by reference herein).
4(a)(iii) --Proposed Form of Indenture between Chemical Bank and the Company
dated as of May 1, 1992 (filed as Exhibit 4(a)(iv) to Form S-3
Registration Statement (Registration No. 33-48125) and
incorporated by reference herein).
4(b)(i) --Proposed Form of Fixed Rate Note between the Company and each of
the following Trustees: The First National Bank of Chicago, The
Bank of New York and Chemical Bank.
4(b)(ii) --Proposed Form of Floating Rate Note between the Company and each
of the following Trustees: The First National Bank of Chicago,
The Bank of New York and Chemical Bank.
5 --Opinion and consent of Piper & Marbury L.L.P., counsel for the
Company.
12 --Computation of Ratio of Earnings to Fixed Charges.
23 --Consent of Independent Certified Public Accountants.
24 --Power of Attorney.
25(a) --Form T-1: Statement of Eligibility under the Trust Indenture Act
of 1939 of The First National Bank of Chicago, Trustee under the
Indenture dated as of March 1, 1993.
25(b) --Form T-1: Statement of Eligibility under the Trust Indenture Act
of 1939 of The Bank of New York, Trustee under the Indenture
dated as of May 1, 1992.
25(c) --Form T-1: Statement of Eligibility under the Trust Indenture Act
of 1939 of Chemical Bank, Trustee under the Indenture dated as of
May 1, 1992.
</TABLE>
(b) Financial Statement Schedules
None.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes to file, during any period in
which offers or sales are being made, a post-effective amendment to this
Registration Statement (i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and (iii) to include any material information
with respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; that for the purpose of determining any liability
under the Securities Act of 1933 each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and to remove from registration by
means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post- effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE COUNTY OF BALTIMORE, STATE OF MARYLAND, ON THE 24TH DAY OF
OCTOBER, 1995.
PHH CORPORATION
By *
---------------------------------
ROBERT D. KUNISCH CHAIRMAN OF THE
BOARD, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
PRINCIPAL EXECUTIVE OFFICER:
* October 24, 1995
- -------------------------------------
ROBERT D. KUNISCH CHAIRMAN OF THE
BOARD, PRESIDENT ANDCHIEF EXECUTIVE
OFFICER
PRINCIPAL FINANCIAL OFFICER:
* October 24, 1995
- -------------------------------------
ROY A. MEIERHENRY SENIOR VICE
PRESIDENT AND CHIEF FINANCIAL
OFFICER
PRINCIPAL ACCOUNTING OFFICER:
* October 24, 1995
- -------------------------------------
NAN A. GRANT CONTROLLER
A MAJORITY OF THE BOARD OF DIRECTORS:*
James S. Beard, Andrew F. Brimmer,
George L. Bunting, Jr., Alan P.
Hoblitzell, Jr., Paul X. Kelley,
Robert D. Kunisch, Francis P.
Lucier, Kent C. Nelson, Donald J.
Shepard, Anne M. Tatlock, Alexander
B. Trowbridge
*By /s/ Samuel H. Wright
---------------------------------
SAMUEL H. WRIGHT ATTORNEY-IN-FACT
October 24, 1995
II-4
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBITS NO.
------- ----------------------- ----
<C> <S> <C>
1 --Proposed Form of Distribution Agreement.
4(a)(i) --Proposed Form of Indenture between The First National
Bank of Chicago and the Company dated as of March 1,
1993 (filed as Exhibit 4(a)(i) to Form S-3 Registration
Statement (Registration No. 33-59376) and incorporated
by reference herein).
4(a)(ii) --Form of Indenture between The Bank of New York and
the Company dated as of May 1, 1992 (filed as
Exhibit 4(a)(iii) to Form S-3 Registration Statement
(Registration No. 33-48125) and incorporated by
reference herein).
4(a)(iii) --Proposed Form of Indenture between Chemical Bank
and the Company dated as of May 1, 1992 (filed as
Exhibit 4(a)(iv) to Form S-3 Registration Statement
(Registration No. 33-48125) and incorporated by
reference herein).
4(b)(i) --Proposed Form of Fixed Rate Note between the Company
and each of the following Trustees: The First National
Bank of Chicago, The Bank of New York and Chemical Bank.
4(b)(ii) --Proposed Form of Floating Rate Note between the Company
and each of the following Trustees: The First National
Bank of Chicago, The Bank of New York and Chemical Bank.
5 --Opinion and consent of Piper & Marbury, L.L.P. counsel
for the Company.
12 --Computation of Ratio of Earnings to Fixed Charges.
23 --Consent of Independent Certified Public Accountants.
24 --Power of Attorney.
25(a) --Form T-1: Statement of Eligibility under the Trust
Indenture Act of 1939 of The First National Bank
of Chicago, Trustee under the Indenture dated as of
March 1, 1993.
25(b) --Form T-1: Statement of Eligibility under the Trust
Indenture Act of 1939 of The Bank of New York, Trustee
under the Indenture dated as of May 1, 1992.
25(c) --Form T-1: Statement of Eligibility under the Trust
Indenture Act of 1939 of Chemical Bank, Trustee under
the Indenture dated as of May 1, 1992.
</TABLE>
<PAGE>
Exhibit 1
PHH CORPORATION
U.S. $2,000,000,000
Medium-Term Notes
DISTRIBUTION AGREEMENT
________, 1995
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
North Tower
World Financial Center
New York, New York 10281
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Sirs:
Section 1. Introductory. PHH Corporation, a Maryland corporation
------------
(the "Company"), has filed with the Securities and Exchange Commission (the
"Commission"), and the Commission declared effective on _____________, 1995, a
registration statement on Form S-3 (Registration No. 33-_____, hereinafter
called the "Registration Statement"), covering up to U.S. $2,000,000,000
aggregate principal amount of the Company's debt securities (the
"Securities"). Any reference herein to the term "Registration Statement" shall
be deemed to refer, unless the context otherwise indicates, to the
Registration Statement, including the form of final prospectus, financial
statements and other documents included or incorporated by reference therein
and all exhibits included therein, as from time to time amended, and the term
"Prospectus" shall be deemed to refer collectively, unless the context
otherwise indicates, to the final prospectus in the form filed with the
Commission pursuant to Rule 424(b) under the Securities Act of 1933 (the
"Act") and each prospectus as supplemented mailed to the Commission pursuant
to Rule 424(c) under the Act, including documents incorporated by reference
therein, as from time to time amended or supplemented (exclusive of any
supplements relating solely to Securities that are not
<PAGE>
Offered Securities as hereinafter defined). The Securities will be issued
under one or more indentures (the "Indentures") identified and described in
the Registration Statement between the Company and one or more commercial
banks, as trustees (the "Trustees"). One class of Securities that the Company
is authorized to issue under the Indentures is Medium-Term Notes (the "Offered
Securities"). Without limitation on the Company's right to sell all other
classes of Securities through underwriters (which may include any or all of
you) or dealers, or directly to one or more institutional investors, or
through agents (which may include any or all of you), and without limitation
on the Company's right to sell Offered Securities through other agents as
provided in Section 3(a) hereof, the Company confirms its agreement with you
with respect to the issue and sale by the Company of up to U.S. $2,000,000,000
(or the equivalent in foreign currency or currency units) principal amount of
the Offered Securities issued under the Indentures, subject to reduction as a
result of the concurrent sale of other Securities of the Company.
Section 2. Representations and Warranties of the Company. The
---------------------------------------------
Company represents and warrants to each of you, as of the date hereof, as of
the Closing Time hereinafter referred to and as of the times referred to in
Sections 4(k) and 4(l) (in each case the "Representation Date"), as follows:
(a) The Registration Statement and the Prospectus, on their
respective dates of effectiveness and filing did, and as of the applicable
Representation Date will, conform in all material respects to the requirements
of the Act, the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the
rules and regulations (the "Rules and Regulations") of the Commission; as of the
respective dates of their effectiveness and filing, neither the Registration
Statement nor the Prospectus did, nor as of the applicable Representation Date
will, include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph do not apply to (i)
statements or omissions in the Registration Statement or the Prospectus based
upon written information furnished to the Company by any of you or any of the
Trustees expressly for use therein or (ii) that part of the Registration
Statement that constitutes the Statement of Eligibility under the Trust
Indenture Act on Form T-1 of any Trustee, except statements or omissions in such
Statement made in reliance upon information furnished in writing to such Trustee
by or on behalf of the Company for use therein.
-2-
<PAGE>
(b) The Company has been duly incorporated and is validly existing
and in good standing under the laws of the State of Maryland and has full
power and authority to conduct the businesses presently being conducted by it.
(c) Neither the execution or delivery of this Agreement, the Offered
Securities or the Indentures, the consummation of the transactions herein or
therein contemplated, nor compliance with the terms, conditions or provisions of
any such instruments, will result in a breach or violation of any of the terms
and provisions of, or constitute (with due notice or lapse of time, or both) a
default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any material subsidiary of the Company is a
party or by which it or any of its assets is bound, any statute, the charter or
by-laws of the Company or any material subsidiary or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any material subsidiary or over its assets (except, no
------
representation, warranty or agreement is being made in this paragraph as to the
Blue Sky or securities laws of any State of the United States or the District of
Columbia, the Commonwealth of Puerto Rico or foreign jurisdictions).
(d) This Agreement has been duly authorized, executed and delivered
on behalf of the Company and is a valid and legally binding agreement of the
Company enforceable in accordance with its terms (except as the same may be
limited by bankruptcy, insolvency, reorganization or other laws relating to or
affecting creditors' rights generally); the Offered Securities have been duly
authorized and, when authenticated as contemplated by the applicable Indenture
or Indentures and delivered and paid for in accordance with this Agreement, will
have been duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company enforceable in accordance
with their terms (except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting creditors' rights
generally) and will be entitled to the benefits provided by the applicable
Indenture or Indentures.
(e) There is no consent, approval, authorization, order, registration
or qualification of or with any court or any regulatory authority or other
governmental body having jurisdiction over the Company or any material
subsidiary which is required for, or the absence of which would materially
affect, the issue and sale of the Offered Securities as
-3-
<PAGE>
contemplated by this Agreement or the execution, delivery or performance of
the Indentures, except the registration under the Act of the Offered
Securities, the qualification of the Indentures under the Trust Indenture Act
and such consents, approvals, authorizations, registrations or qualifications
as may be required under the securities or "Blue Sky" laws of any jurisdiction
in connection with the offering of the Offered Securities by the Company and
the Agent in the manner contemplated hereby.
(f) All financial statements of the Company provided to the Agent(s)
by the Company (including those contained in the Registration Statement) fairly
present the financial condition of the Company in all material respects and
have been prepared in conformity with U.S. generally accepted accounting
principles.
(g) The Company has complied with all provisions of section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
Section 3. Solicitations as Agent; Purchases as Principal or Under-
--------------------------------------------------------
writer. (a) Solicitations as Agent. On the basis of the representations and
- ------ ----------------------
warranties herein contained, but subject to the terms and conditions herein
set forth, each of you will use your best efforts to solicit offers to
purchase the Offered Securities upon the terms and conditions set forth in the
Prospectus as then amended or supplemented. You are hereinafter sometimes
referred to in your capacity as agents, individually as an "Agent" and
collectively as the "Agents". The Company reserves the right, and may submit
offers, to purchase and sell Offered Securities directly to the public on its
own behalf in jurisdictions in which it is authorized to do so. In addition,
after notice to each of the Agents, the Company may appoint any additional
agent to solicit and receive offers to purchase Offered Securities from the
Company upon the terms and conditions set forth in the Prospectus, provided
that any such additional agent is made a party to this Agreement or executes a
distribution agreement substantially identical to this Agreement.
Each Agent further undertakes that in connection with the distribution
of Offered Securities denominated in any foreign currency or currency unit, it
will comply with the further restrictions in respect of offers and sales of
Offered Securities so denominated set forth in Exhibit C hereto.
-4-
<PAGE>
The Company agrees to pay each Agent a commission for each Offered
Security sold, the purchase of which is solicited by such Agent, as follows:
<TABLE>
<CAPTION>
Commission as a Percentage
Maturity of Principal Amount
- -------- --------------------------
<S> <C>
9 months to less than 1 year .125%
1 year to less than 18 months .150
18 months to less than 2 years .200
2 years to less than 3 years .250
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 6 years .500
6 years to less than 7 years .550
7 years to less than 10 years .600
10 years to less than 15 years .625
15 years to less than 20 years .700
20 years to 30 years .750
More than 30 years to 40 years To be negotiated
</TABLE>
The authorized denominations of Offered Securities denominated in a
currency or currency unit other than United States dollars shall be the
equivalent, as determined by the Market Exchange Rate (as defined herein) for
such currency or currency unit on the business day immediately preceding the
trade date for such Offered Securities, of U.S. $1,000 (rounded down to an
integral multiple of 1,000 units of such currency or currency unit), and any
larger amount that is an integral multiple of 1,000 units of such currency or
currency unit. The authorized denominations of Offered Securities denominated
in United States dollars shall be U.S. $1,000 and any larger amount that is an
integral multiple of U.S. $1,000. The Agents shall communicate to the Company,
orally or in writing, each offer to purchase Offered Securities other than
those rejected by the Agents. The Company shall have the sole right to accept
offers to purchase the Offered Securities and may reject any such offer in whole
or in part.
-5-
<PAGE>
The Agents shall have the right to reject any offer to purchase the Offered
Securities in whole or in part, and any such rejection shall not be deemed a
breach of their agreements contained herein.
The "Market Exchange Rate" on a given date for a given foreign
currency means the noon buying rate in New York City for cable transfers in such
currency as certified for customs purposes by the Federal Reserve Bank of New
York on such date; provided, however, that in the case of European Currency
--------
Units, Market Exchange Rate means the rate of exchange determined by the Council
of European Communities (or any successor thereto) as published on such date or
the most recently available date in the Official Journal of the European
Communities (or any successor publication).
(b) Purchases as Principal or Underwriter. Each sale of Offered
-------------------------------------
Securities to any or all of you as principal or underwriter for resale to others
shall be made in accordance with the terms of this Agreement and a separate
agreement to be entered into between us which will provide for the sale of such
Offered Securities to, and the purchase and reoffering thereof by, any or all of
you. Each such separate agreement is herein referred to as a "Terms Agreement".
Your commitment to purchase Offered Securities pursuant to any Terms Agreement
shall be deemed to have been made on the basis of the representations and
warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth. Each Terms Agreement shall specify the
currency denomination, principal amount and maturity of Offered Securities to
be purchased by you pursuant thereto, the price to be paid to the Company for
such Offered Securities, the initial public offering price, if any, at which
the Offered Securities are proposed to be reoffered, the time and place of
delivery of and payment for such Offered Securities, and any provisions
relating to rights of, and default by, any purchasers acting together with you
in the reoffering of the Offered Securities. To the extent required, such
Terms Agreement shall also specify any requirements for opinions of counsel,
officer's certificates and letters from KPMG Peat Marwick or other independent
certified public accountant of national standing pursuant to Section 5 hereof.
Terms Agreements, each of which shall be substantially in the form of Exhibit
A hereto, may take the form of an exchange of any standard form of written
communication (including a written confirmation of an oral agreement) between
the Company and each of you participating in the sale referred to therein,
including by telecopy or telex. If agreed to by the Company and any one or
more Agents, such Agents may purchase Offered Securities as principal pursuant
-6-
<PAGE>
to the procedures for documentation and settlement applicable to agency sales.
The Agents may utilize a selling or dealer group in connection with the resale
of the Offered Securities.
(c) Procedures. Certain administrative functions are set forth in
----------
the Medium-Term Note Administrative Procedures (the "Procedure"), attached
hereto as Exhibit B. You and the Company agree to perform the respective duties
and obligations specifically provided to be performed by each of them herein and
in the Procedure, as amended from time to time. The Procedure may only be
amended by written agreement of all the parties hereto.
(d) Delivery. The documents required to be delivered by Section 5
--------
hereof (subject to paragraph (b) above) shall be delivered at the office of
Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York, on the
date hereof, and at the delivery time specified in each Terms Agreement (each
called a "Closing Time").
Section 4. Covenants of the Company. The Company covenants with
------------------------
you that:
(a) The Company will make no amendment or supplement (other than by
an amendment or supplement in the form previously agreed to by the parties
providing solely for a change in the interest rates or maturities offered
in the Offered Securities, or for a change in the currency in which the
Offered Securities are denominated, chosen from among currencies that have
previously been described in the Prospectus (a "Pricing Supplement")) to
the Registration Statement or the Prospectus, whether by the filing of
documents incorporated by reference in whole or in part into the
Registration Statement or the Prospectus or otherwise, or make any change
in the form of final prospectus prior to the time it is first filed with
the Commission pursuant to Rule 424(b) under the Act, prior to having
furnished each of you a reasonable opportunity to review the same and which
shall not have been disapproved by you; the Company will advise each of you
promptly of the filing and effectiveness of any amendment to the
Registration Statement or the filing of any amendment or supplement (other
than a Pricing Supplement) to the Prospectus (including the filing and
effectiveness of any document incorporated by reference in whole or in part
into the Registration Statement or the Prospectus), and of the institution
by the Commission of any stop-order proceedings in respect
-7-
<PAGE>
of the Registration Statement, and will use its best efforts to prevent
the issuance of any such stop-order and to obtain as soon as possible its
lifting, if issued.
(b) If at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act any event occurs as a
result of which the Registration Statement or Prospectus would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if, in your reasonable
opinion or in the reasonable opinion of the Company, it is necessary at any
time to amend or supplement the Registration Statement or Prospectus
(including any document incorporated by reference in whole or part therein)
to comply with the Act, the Company promptly will notify you, or you shall,
as the case may be, suspend solicitation of offers to purchase Offered
Securities and, if so notified by the Company, you shall forthwith suspend
such solicitation and cease using the Prospectus; the Company will promptly
prepare and file with the Commission an amendment or supplement to such
Registration Statement or Prospectus (or to such document incorporated by
reference therein) which will correct such statement or omission or effect
such compliance and will supply such amended or supplemented Prospectus or
document to each of you in such quantities as you may reasonably request;
and if such amendment or supplement or document, and any documents,
certificates and opinions furnished to each of you pursuant to paragraph
(i) below in connection with the preparation or filing of such amendment or
supplement, are satisfactory in all respects to you, you will, upon the
filing of such amendment or supplement or document with the Commission or
effectiveness of an amendment to the Registration Statement, resume your
respective obligation to solicit offers to purchase Offered Securities
hereunder.
(c) As soon as practicable, the Company will make generally available
to its securityholders an earnings statement or statements that will
satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder.
(d) The Company will furnish to each of you copies of all amendments
of and supplements (other than Pricing Supplements, copies of which need
only be furnished to the Agents involved in the sale of the Offered
Securities to which such Pricing Supplements relates) to the Registration
Statement and the Prospectus, as soon as
-8-
<PAGE>
available and in such quantities as you reasonably request.
(e) The Company will take such action as you may request in order to
qualify the Offered Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as you may request; provided, however,
--------
that in no event shall the Company be obligated to subject itself to
taxation or to qualify to do business in any jurisdiction where it is not
now so subject or qualified or to take any action which would subject it to
service of process in suits, other than those arising out of the offering
or sale of the Offered Securities, in any jurisdiction where it is not now
so subject.
(f) So long as any Offered Security is outstanding, the Company will
furnish to each of you, as soon as practicable after the end of each fiscal
year, a balance sheet and statement of income of the Company as at the end
of and for such fiscal year in reasonable detail and reported on by
independent public accountants. The Company will furnish to each of you as
soon as practicable after the end of each quarterly fiscal period (except
for the last quarterly fiscal period of each fiscal year), a balance sheet
and statement of income of each of the Company as at the end of such period
and for the fiscal year to date, certified by either the Chief Financial
Officer or Chief Accounting Officer of the Company. So long as the Company
has active subsidiaries, such financial statements will be furnished on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated.
(g) The Company shall furnish to each of you as soon as practicable
following the filing of any amendment or supplement (other than a Pricing
Supplement) to the Registration Statement or Prospectus (including the
filing of any document incorporated by reference in whole or in part into
the Registration Statement or Prospectus), a certificate of (i) the
Chairman of the Board, the President, any Executive Vice President or any
Vice President and (ii) the Vice President and Treasurer, the Vice
President and Controller or any other Vice President of the Company to the
effect that, at the date of such certificate, neither the Registration
Statement nor the Prospectus includes any untrue statement of a material
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the foregoing does not apply
-9-
<PAGE>
to (i) statements or omissions in the Registration Statement or
Prospectus based upon written information furnished to the Company by any
of you or any of the Trustees expressly for use therein or (ii) that part
of the Registration Statement that constitutes the Statement of
Eligibility under the Trust Indenture Act on Form T-1 of any Trustee,
except statements or omissions in such Statement made in reliance upon
information furnished in writing to such Trustee by or on behalf of the
Company for use therein.
(h) The Company shall furnish to each of you (i) forthwith after the
Company is required to file the same with the Commission, copies of its
annual reports and quarterly reports on Forms 10-K and 10-Q, respectively,
its proxy statements and of any other information, documents and reports
that the Company is required to file with the Commission pursuant to
Section 13, 14 or Section 15(d) of the Securities Exchange Act of 1934 or
with the New York Stock Exchange, Inc., or any other national securities
exchange on which any security of the Company is listed and (ii) at the
earliest time the Company makes the same available to others, copies of
annual reports and other financial reports of the Company furnished or made
available to the public generally.
(i) The Company shall furnish to each of you such documents,
certificates of officers of the Company and opinions of counsel for the
Company relating to the business, operations and affairs of the Company,
the Registration Statement, the Prospectus (including any amendments or
supplements thereto), the Indenture, the Offered Securities, this
Agreement, the Procedure and the performance by the Company and you of our
respective obligations hereunder and thereunder as you may from time to
time and at any time prior to the termination of this Agreement reasonably
request.
(j) The Company shall pay all expenses incident to the performance of
its obligations under this Agreement, including the fees and disbursements
of its accountants, the cost of printing and delivery of the Registration
Statement, the Prospectus (including all amendments and supplements
thereto) and the Indentures, the costs of preparing, printing, packaging
and delivering the Offered Securities, the fees and disbursements of the
Trustees and the fees of any agency that rates the Offered Securities, the
reasonable fees of your counsel, and will reimburse you from time to time
for all reasonable out-of-pocket expenses incurred by you, including
-10-
<PAGE>
in connection with the offering and sale of the Offered Securities and the
qualification of the Offered Securities for sale and determination of
eligibility for investment of the Offered Securities under the securities
or Blue Sky laws of such jurisdictions as you designate and any advertising
expenses connected with the offering and sale of Offered Securities.
(k) Each acceptance by the Company of an offer to purchase Offered
Securities and each delivery of Offered Securities in any sale made to, or
pursuant to an offer solicited by, you will be deemed to be an affirmation
to any Agent that solicited such offer or purchased such Offered Securities
that the representations and warranties of the Company contained in
Sections 2(a) through 2(e) are true and correct at the time of such
acceptance or delivery, as though made at and as of such time, and a
representation and warranty to any Agent that solicited such offer or
purchased such Offered Securities that neither the Registration Statement
nor the Prospectus includes any untrue statement of a material fact or
omits to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that the foregoing does not apply to (i) statements or
omissions in the Registration Statement or the Prospectus based upon
written information furnished to the Company by any of you or any of the
Trustees expressly for use therein or (ii) that part of the Registration
Statement that constitutes the Statement of Eligibility under the Trust
Indenture Act on Form T-1 of any Trustee, except statements or omissions
in such Statement made in reliance upon information furnished in writing
to such Trustee by or on behalf of the Company for use therein.
(l) Each time that the Registration Statement or the Prospectus
(including any portion of any document incorporated by reference in whole
or part into either), is amended or supplemented (other than by a Pricing
Supplement), the Company will deliver or cause to be delivered forthwith to
each of you a certificate of the officers of the Company as specified in
Section 4(g), dated the date of the effectiveness of such amendment or the
date of filing of such supplement, in form reasonably satisfactory to you,
to the effect that the statements contained in the certificate referred to
in Section 5(c)(ii) that was last furnished to you (either pursuant to
Section 5(c)(ii) or this Section 4(l)) are true and correct at the time of
the effectiveness of such amendment or the filing of such supplement as
-11-
<PAGE>
though made at and as of such time or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section
5(c)(ii) dated the effective date of such amendment or the date of filing
of such supplement.
(m) Each time that the Registration Statement or the Prospectus,
including any portion of any document incorporated by reference in whole or
part into either, is amended or supplemented (other than by a Pricing
Supplement), and except for an amendment or supplement occasioned by the
incorporation by reference of proxy materials of the Company or reports of
the Company on Form 10-K, Form 10-Q or Form 8-K, in which case the written
opinion furnished by the Company referred to hereafter shall be that of the
General Counsel or Assistant General Counsel of the Company), the Company
shall furnish or cause to be furnished forthwith to each of you a written
opinion of Piper & Marbury L.L.P., or other counsel for the Company
acceptable to the Agents, dated the date of the effectiveness of such
amendment or the date of filing of such supplement or the filing of such
document incorporated by reference into the Registration Statement or the
Prospectus, in form satisfactory to you, relating to the Registration
Statement and the Prospectus.
(n) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information, whether by incorporation by reference in whole or in part or
otherwise, the Company shall cause KPMG Peat Marwick L.L.P., or other
independent certified public accountants of national standing, forthwith to
furnish to each of you a letter, dated the date of the effectiveness of
such amendment or the date of filing of such supplement, in form
satisfactory to you, of the same tenor as the letter referred to in Section
5(d) with such changes as may be necessary to reflect the amended or
supplemental financial information included in the Registration Statement
and the Prospectus and the other financial information of the Company
available within five days of the date of such letter; provided, however,
-------- -------
that such accountants need only furnish you a letter in compliance with SAS
71, as appropriately modified, where such amendment or supplement or
document incorporated by reference only sets forth unaudited quarterly
financial information contained in the Company's Quarterly Report on Form
10-Q.
-12-
<PAGE>
(o) Between the date of any Terms Agreement and the settlement date
with respect to the Offered Securities covered thereby, the Company will
not, without the prior consent of each of you that is a party to such
Terms Agreement, offer or sell, or enter into any agreement to sell, any
debt securities of the Company, other than (i) borrowings under the
Company's revolving credit agreements and lines of credit and (ii)
issuances of the Company's commercial paper.
(p) The Company shall offer to any person who has agreed to purchase
Offered Securities as a result of an offer to purchase solicited by any of
you the right to refuse to purchase and pay for such Offered Securities if,
on the related settlement date fixed pursuant to the Procedure, (i) the
condition set forth in Section 5(a) hereof shall not be satisfied, (ii) the
condition set forth in clause (a) of the last sentence of Section 5 hereof
shall not be satisfied or (iii) if any of the events set forth in clause
(ii) or clause (iii) of the second sentence of Section 9 hereof shall have
occurred (it being understood that, for purposes of this paragraph (p),
the judgment of such person shall be substituted for the judgment of the
Agent with respect to the matters referred to in clause (ii) of the second
sentence of Section 9 hereof, and that the Agent shall have no duty or
obligation to exercise its judgment on behalf of such person). This
paragraph (p) shall not affect any other right of any person who has agreed
to purchase Offered Securities to refuse to purchase and pay for such
Offered Securities that arises under any other provision of this Agreement.
Section 5. Conditions of Obligations. Your several obligations to
-------------------------
solicit offers to purchase the Offered Securities as Agent(s) and your
obligations to purchase Offered Securities pursuant to any Terms Agreement or
otherwise will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the
statements of the Company's officers made in each certificate furnished
pursuant to the provisions hereof, to the performance and observance by the
Company of all covenants and agreements herein contained on its part to be
performed and observed and to the following additional conditions precedent:
(a) At the date hereof and at each Closing Time no stop-order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings
-13-
<PAGE>
for that purpose shall have been instituted or, to your knowledge or the
knowledge of the Company, threatened or contemplated by the Commission.
(b) At the date hereof and at each Closing Time if called for by the
applicable Terms Agreement, each of you (or, with respect to a Closing Time
called for by any Terms Agreement, each of you that is a party to such
Terms Agreement) shall have received an opinion, dated, as applicable,
either the date hereof or such Closing Time, of Piper & Marbury L.L.P., or
other counsel for the Company acceptable to the Agents (or in the case of
any Closing Time other than the date hereof, the opinion of the General
Counsel or Assistant General Counsel of the Company), substantially
identical to the proposed form of their opinion heretofore delivered to
each of you.
(c) (i) At the date hereof and at each Closing Time subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus (except as set forth in or contemplated by the
Registration Statement and the Prospectus), the Company shall not have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions not in the ordinary course of
business, nor shall there have been any material decrease in the
stockholders' equity or any material increase in the long-term debt of the
Company or any material adverse change in the condition, financial or
otherwise, or in the earnings, affairs or business prospects of the
Company, whether or not arising in the ordinary course of business.
(ii) At the date hereof and at each Closing Time if called for by the
applicable Terms Agreement, each of you (or, with respect to a Closing Time
called for by any Terms Agreement, each of you that is a party to such
Terms Agreement) shall have received a certificate, dated, as applicable,
the date hereof or such Closing Time, signed by the officers of the Company
specified in Section 4(g), certifying that, to the best of their knowledge
after reasonable investigation, the statements made in the immediately
preceding paragraph (i) are accurate and to the effect that (A) no stop-
order suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for that purpose have been instituted or, to the
knowledge of such officers, are threatened or contemplated by the
Commission, (B) the Registration Statement and the Prospectus conform in
all material respects to the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations,
-14-
<PAGE>
(C) neither the Registration Statement nor the Prospectus contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
foregoing does not apply to (i) statements or omissions in the
Registration Statement or the Prospectus made in reliance upon
information furnished in writing to the Company by any of you or on your
behalf or on behalf of any of the Trustees expressly for use therein or
(ii) that part of the Registration Statement that constitutes the
Statement of Eligibility under the Trust Indenture Act on Form T-1 of any
Trustee, except statements or omissions in such Statement made in reliance
upon information furnished in writing to such Trustee by or on behalf of
the Company for use therein, and (D) the representations and warranties
of the Company included in Sections 2(a) through 2(e) are, as of the
Closing Time, accurate in all material respects and the Company has
performed and observed all covenants and agreements herein contained on
its part to be performed and observed prior to the Closing Time.
(d) At the date hereof, and at each Closing Time if called for by the
applicable Terms Agreement, each of you (or, with respect to a Closing Time
called for by any Terms Agreement, each of you that is a party to such
Terms Agreement) shall have received a letter, dated as of the Closing
Time, signed by KPMG Peat Marwick or other independent certified public
accountant of national standing, substantially identical to the proposed
form of such letter heretofore delivered to each of you.
(e) At the date hereof and at each Closing Time if called for by the
applicable Terms Agreement, each of you (or with respect to a Closing Time
called for by any Terms Agreement, each of you that is a party to such
Terms Agreement) shall have received an opinion, dated such date, of
Messrs. Wachtell, Lipton, Rosen & Katz, or other counsel selected by the
Agents, with respect to the Company, the Offered Securities, the
Registration Statement, including the form of final prospectus included
therein, this Agreement and the form and sufficiency of all proceedings
taken in connection with the authorization, sale and delivery of the
Offered Securities, all of which shall be satisfactory in all respects to
you, and the Company shall have furnished to your counsel such documents as
such counsel may reasonably request for the purpose of enabling them to
render such opinion.
-15-
<PAGE>
(f) At the date hereof and at each Closing Time if called for by the
applicable Terms Agreement, the Company shall have furnished to each of you
(or, with respect to a Closing Time called for by any Terms Agreement, each
of you that is a party to such Terms Agreement) such further information
and documents as you may have reasonably requested.
(g) There shall not have occurred any change, or any development
involving a prospective change, involving currency exchange rates,
exchange controls, taxation or similar matters that in your respective
judgments makes it impracticable or inadvisable to proceed with your
solicitation of offers to purchase the Offered Securities denominated in
the affected currency or currencies, or your purchase of such Offered
Securities from the Company as principal; provided, however, that any such
-------- -------
change or development shall not affect your respective obligations with
respect to Offered Securities denominated in any currency not so affected.
Your respective obligations to purchase Offered Securities pursuant to
any Terms Agreement (or as contemplated by the last sentence of Section 3(b)
hereof) will be subject to the following further conditions: (a) the rating
assigned by any nationally recognized securities rating agency to any debt
securities of the Company as of the date of the applicable Terms Agreement shall
not have been lowered since that date nor shall any such organization have
publicly announced that it has under surveillance or review, with possible
negative implications, its ratings of any debt securities of the Company and (b)
there shall not have come to your attention any facts that would cause you to
believe that the Prospectus, at the time it was required to be delivered to a
purchaser of the Offered Securities, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at such time, not
misleading.
Section 6. Indemnification. (a) The Company shall indemnify and
---------------
hold harmless each of you, each of your partners, directors, officers and
employees and each person, if any, who controls you within the meaning of
Section 15 of the Act against any and all losses, claims, damages, and
liabilities, joint or several (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they, or any
-16-
<PAGE>
of them, may become subject under the Act, the Securities Exchange Act of 1934
or other Federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except that the foregoing does not apply to (i) untrue
statements or omissions or alleged untrue statements or omissions in such
preliminary prospectus, the Registration Statement or the Prospectus, based
upon written information furnished to the Company by any of you expressly for
use therein or (ii) that part of the Registration Statement that constitutes
the Statement of Eligibility under the Trust Indenture Act on Form T-1 of any
Trustee, except untrue statements or omissions or alleged untrue statements or
omissions in such Statement made in reliance upon information furnished in
writing to such Trustee by or on behalf of the Company for use therein;
provided, however, that the aforesaid indemnity agreement with respect to the
- -------- -------
Registration Statement and the Prospectus shall not inure to your benefit (if
the person asserting any such loss, claim, damage or liability purchased the
Offered Securities which are the subject thereof through you), or to the benefit
of any person controlling you, if the Company shall have furnished an amendment
or supplement to the Prospectus to you prior to the time a written confirmation
of the sale of such Offered Securities was sent or given to the person asserting
such loss, claim, damage, liability or action for which indemnification is
sought, and the Prospectus as so supplemented or amended was not sent or given
to such person at or prior to the written confirmation of the sale of such
Offered Securities to such person.
(b) Each Agent shall indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section 15 of the
Act, each director of the Company and each officer of the Company who signs the
Registration Statement or any amendment thereto to the same extent as the
foregoing indemnity from the Company to you but only insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which was made in
any preliminary prospectus, the Registration Statement or the Prospectus in
reliance upon and in conformity with information furnished in writing to the
Company by such Agent expressly for use therein.
-17-
<PAGE>
(c) Any party which proposes to assert the right to be indemnified
under this Section 6 shall, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a claim is
to be made against an indemnifying party under paragraph (a) or (b) of this
Section 6, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served, but the
omission so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability which it may have to any
indemnified party otherwise than under paragraph (a) or (b) of this Section 6.
In case any such action, suit or proceeding is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it wishes, jointly with any other indemnifying party, similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party
(who shall not except with the consent of the indemnified party be counsel to
the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses, other than reasonable costs of investigation subsequently
incurred by such indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any such action,
but the fees and expenses of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by such indemnified party
has been authorized by the indemnifying party, (ii) the indemnified party shall
have reasonably concluded that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of the defense of
such action (in which case the indemnifying party shall not have the right to
direct the defense of such action on behalf of the indemnified party) or (iii)
the indemnifying party has not in fact employed counsel to assume the defense of
such action, in any of which events such fees and expenses shall be borne by the
indemnifying party. An indemnifying party shall not be liable for any
settlement of any action or claim effected without its consent.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses,
-18-
<PAGE>
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and each of you on the other from the offering of the
Securities to which such loss, claim, damage or liability (or action in
respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and each of you on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each of you on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Offered Securities
(before deducting expenses) received by the Company bear to the total
commissions or discounts received by each of you in respect thereof. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading
relates to information supplied by the Company on the one hand or by you on
the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and you agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Agent shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities purchased by or
through such Agent were sold exceeds the amount of any damages which such
Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
-19-
<PAGE>
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Agents' obligations to
contribute pursuant to this Section 6(d) are several, in proportion to the
respective principal amounts of Offered Securities purchased or sold by each
of such Agents, and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls you
within the meaning of the Act; and your obligations under this Section 6 shall
be in addition to any liability which you may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company within the meaning of the
Act.
Section 7. Position of the Agent(s). In soliciting purchases of
------------------------
the Offered Securities, each Agent is acting solely as agent for the Company,
and not as principal. Each Agent shall make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose offer to purchase
Offered Securities has been solicited by such Agent and accepted by the
Company, but such Agent shall not have any liability to the Company in the
event any such purchase is not consummated for any reason.
Section 8. Representations and Indemnities to Survive Delivery. Your
---------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements and those of the Company or its officers set forth in or made
pursuant to this Agreement shall remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any of you or on behalf of the Company or any of its officers or directors or
any controlling person, and will survive each delivery of and payment for any of
the Offered Securities.
Section 9. Termination. This Agreement may be terminated at any
-----------
time (i) by the Company with respect to any Agent by giving written notice of
such termination to such Agent or (ii) by any Agent, as to the rights and
obligations of such Agent only, by giving written notice to the Company. Any
Agent that is a party to any Terms Agreement may also terminate such Terms
Agreement (or other obligation to purchase Offered Securities as principal as
contemplated by the penultimate sentence of Section 3(b) hereof), immediately
upon notice to the Company, at any time prior to the Closing Time relating
thereto (i) if there has been, since the respective
-20-
<PAGE>
dates as of which information is given in the Registration Statement and
Prospectus, any material adverse change in the condition, financial or
otherwise, of the Company and its subsidiaries considered as one enterprise,
or in the earnings, affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any outbreak or
escalation of hostilities or other calamity or crisis the effect of which on
the financial markets of the United States, or of any other country in the
currency of which the Offered Securities are denominated, is such as to make
it, in the judgment of such Agent, impracticable to market the Offered
Securities or enforce contracts for the sale of the Offered Securities, or
(iii) if trading in any securities of the Company has been suspended by the
Commission or a national securities exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
exchanges or by order of the Commission or any other governmental authority,
or if a banking moratorium has been declared by either Federal or New York
State authorities or by authorities in any other country in the currency of
which the Offered Securities are denominated. In the event of such termination
by the Company, the Company and any Agent as to which this Agreement has been
terminated shall have no liability or other obligation to each other, and in
the event of such termination by an Agent, such Agent and the Company shall
have no further liability or obligation to each other, in each case except as
provided in the first sentence of the third paragraph of Section 3, Section
4(c), Section 4(j), Section 6 and Section 8 and except that, if at the time of
termination (i) an offer to purchase any of the Offered Securities has been
accepted by the Company but the time of delivery to the purchaser or its agent
of the Offered Security or Offered Securities relating thereto has not
occurred or (ii) any Agent shall own any of the Offered Securities which were
bought by such Agent as principal with the intention of reselling them, the
Company's obligations provided in Sections 4(k) through 4(n) and, in the
circumstances described in clause (ii), all obligations of the Company
relating to such Agent's ability to resell such Offered Securities, shall not
be terminated.
Section 10. Notices. All communications hereunder will be in
-------
writing and, if sent to you, will be mailed, delivered or telegraphed and
confirmed in duplicate originals to:
-21-
<PAGE>
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Attention: Joseph D. Fashano
Telephone: (212) 909-2107
Telecopy: (212) 318-0532
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Credit Control--Medium Term Notes
Telecopy: (212) 363-7609
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
North Tower
World Financial Center
New York, New York, 10281
Attention: MTN Product Management
Telecopy: (212) 449-2234
J.P. Morgan Securities Inc.
60 Wall Street - 3rd Floor
New York, New York 10260
Attention: Medium-Term Note Desk
Telecopy: (212) 648-5907
or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 11333 McCormick Road, Hunt Valley, Maryland 21031, Attention
of Vice President and Treasurer.
Section 11. Parties. This Agreement will inure to the benefit of
-------
and be binding upon each of the parties hereto and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or is
to be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons,
directors, officers and employees referred to in Section 6, 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 being intended to be and being for the sole exclusive benefit of the
parties hereto and their respective successors and said controlling persons
and said directors, officers and employees, and for the benefit of no other
person, firm or corporation. No purchaser of any Offered Securities through
any Agent will be deemed to be a successor by reason merely of such purchase.
Section 12. Governing Law. This Agreement will be governed by and
-------------
construed in accordance with the laws of the State of New York.
-22-
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Company and you in accordance with its terms.
Very truly yours,
PHH CORPORATION
By
-----------------------------
Vice President and Treasurer
Confirmed and Accepted,
as of the date first
above-written:
CS FIRST BOSTON CORPORATION
By
--------------------------
GOLDMAN, SACHS & CO.
BY
--------------------------
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By
--------------------------
J.P. MORGAN SECURITIES INC.
By
--------------------------
-23-
<PAGE>
EXHIBIT A
PHH CORPORATION
(A Maryland corporation)
Medium-Term Notes
TERMS AGREEMENT
[Date]
PHH Corporation
11333 McCormick Road
Hunt Valley, Maryland 21037
Attention: __________________
Re: Distribution Agreement for Above-Mentioned Securities
Pursuant to the Distribution Agreement dated _________ __, 1995
between PHH Corporation (the "Company") and [Agent(s)], the undersigned agrees
to purchase the Company's Medium-Term Notes having the principal amounts
(denominated in the respective currencies), maturities, interest rates and other
terms set forth in Schedule I hereto.
[The opinions referred to in Sections 5(b) and 5(e) of the
Distribution Agreement, the accountants' letter referred to in Section 5(d) of
the Distribution Agreement [and the officer's certificate referred to in Section
5(c) of the Distribution Agreement] will be required.]
[Agent(s)]
Accepted: By
PHH CORPORATION -----------------------------
- ---------------
By
--------------------------
<PAGE>
Schedule I
<TABLE>
<CAPTION>
Principal Discount Initial
Amount (as % of Public
Maturity Settlement and Interest Principal Offering
Date Date Currency Rate Amount) Price Trustee
-------- ---------- --------- -------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
A.
B.
C.
D.
E.
F.
G.
H.
Time of delivery
Place of delivery
[Other terms]
[Closing date]
</TABLE>
<PAGE>
EXHIBIT B
PHH CORPORATION
Administrative Procedures
-------------------------
These Administrative Procedures relate to the Offered Securities
defined in the Distribution Agreement, dated _______ __, 1995 (the "Distribution
Agreement"), between PHH Corporation (the "Company") and CS First Boston
Corporation, Goldman, Sachs & Co., Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and J.P. Morgan Securities Inc. (together, the
"Agents"), to which this Administrative Procedure is attached as Exhibit B.
Defined terms used herein and not defined herein shall have the meanings given
such terms in the Distribution Agreement, the Prospectus as amended or
supplemented, or the applicable Indenture. As used in these Administrative
Procedures, the "Indenture" refers to the Indenture pursuant to which the
subject Offered Securities are issued and the "Trustee" refers to the Trustee
under such Indenture.
The procedures to be followed with respect to the settlement of sales
of Offered Securities directly by the Company to purchasers solicited by an
Agent, as agent, are set forth below. The terms and settlement details related
to a purchase of Offered Securities by an Agent, as principal, from the Company
will be set forth in a Terms Agreement pursuant to the Distribution Agreement,
unless the Company and such Agent otherwise agree as provided in Section 3(b) of
the Distribution Agreement, in which case the procedures to be followed in
respect of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of an Offered Security by a purchaser solicited by such
Agent, is referred to herein as the "Selling Agent" and, in relation to a
purchase of an Offered Security by such Agent as principal other than pursuant
to a Terms Agreement, as the "Purchasing Agent."
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Offered
Securities and the related settlement details.
Each Offered Security will be issued only in fully registered form and
will be represented by either a global security (a "Global Security") delivered
to the Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set forth in the
applicable
B-1
<PAGE>
Pricing Supplement. An owner of a Book-Entry Security will not be entitled to
receive a certificate representing such a Security, except as provided in the
Indenture.
Certificated Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Book-Entry Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
B-2
<PAGE>
Communication of Sale Information to
Company by Selling Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate and the
initial interest payment date;
(3) Maturity Date;
(4) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(5) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(8) Net proceeds to the Company;
(9) Settlement Date;
(10) If a redeemable Certificated Security, such of the following as
are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(11) If a Floating Rate Certificated Security, such of the following
as are applicable:
B-3
<PAGE>
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates, and
(xi) Calculation Agent;
(12) Name, address and taxpayer identification number of the
registered owner(s);
(13) Denomination of certificates to be delivered at settlement; and
(14) Name of the Trustee.
Preparation of Pricing Supplement by Company
If the Company accepts an offer to purchase a Certificated Security,
it will prepare a Pricing Supplement. The Company will supply at least ten
copies of such Pricing Supplement to the Selling Agent or Purchasing Agent, as
the case may be, not later 3:00 p.m., New York City time, on the second business
day following the date of acceptance of such offer, or if the Company and the
purchaser agree to settlement on the date of such acceptance, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth business day following the date on which
such Pricing Supplement is first used.
Pricing Supplements will be delivered to the Selling Agent or
Purchasing Agent as follows:
B-4
<PAGE>
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Attn: Joseph D. Fashano
Telephone: (212) 909-2107
Telecopy: (212) 318-0532
Goldman, Sachs & Co
85 Broad Street
New York, New York 10004
Attn: Karen Robinson
MTN Desk Assistant
Telephone: (212) 902-8401
Telecopy: (212) 902-0658
Merrill Lynch & Co. - Tritech Services
4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
Attn: Final Prospectus Unit/Nachman Kimerling
Telephone: (908) 878-6525/26/27
Telecopy: (908) 878-6530
with a copy to:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center, North Tower
10th Floor
New York, NY 10281-1310
Attn: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
J.P. Morgan Securities Inc.
60 Wall Street
3rd Floor
New York, New York 10260
Attn: Medium-Term Note Desk
Telecopy: (212) 648-5907
Delivery of Confirmation and Prospectus to
Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such Purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
B-5
<PAGE>
Date of Settlement:
All offers solicited by a Selling Agent or made by a Purchasing Agent
and accepted by the Company will be settled on a date (the "Settlement Date")
which is the fifth business day after the date of acceptance of such offer,
unless the Company and the purchaser agree to settlement (a) on any other
business day after the acceptance of such offer or (b) with respect to an
offer accepted by the Company prior to 10:00 a.m., New York City time, on the
date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated
Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the business day prior to the Settlement Date unless the Settlement
Date is the date of acceptance by the Company of the offer to purchase
Certificated Securities in which case such instruction will be given by the
Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by
Trustee and Receipt of Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by an Agent, the Trustee will, by 2:15 p.m., New York City time, on
the Settlement Date, deliver the Certificated Securities to the Selling Agent
for the benefit of the purchaser or such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the
B-6
<PAGE>
purchaser. The Company shall not use any proceeds advanced by a Selling Agent
to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing
Agent, the Trustee will, by 2:15 p.m., New York City time, on the Settlement
Date, deliver the Certificated Securities to the Purchasing Agent against
delivery of payment for such Certificated Securities in immediately available
funds to the Company in an amount equal to the issue price of the Certificated
Securities less the Purchasing Agent's discount.
Certified Securities will be delivered to the Agents as follows:
CS First Boston Corporation
Five World Trade Center
New York, New York 10048
Attention: Paul Riley
Telephone: (212) 322-1606
Telecopy: (212) 335-0623
Goldman, Sachs & Co.
85 Broad Street, Sixth Floor
New York, New York 10004
Attention: Corporate Bond Operations
Telephone: (212) 902-8095
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Money Market Clearance - MTNs
One Liberty Plaza
165 Broadway, 4th Floor
New York, NY 10080
Attention: David Alavarces
J.P. Morgan Securities Inc.
35 Wall Street
17th Floor
New York, New York 10015
Attention: Al Rios/Ron Reda
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Certificated Security, the Selling Agent will
promptly notify the Trustee and the Company thereof by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Selling Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an adequate basis for its loss of
the use of funds
B-7
<PAGE>
during the period when they were credited to the account of the Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
PART II: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- ------------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary (the "Certificate Agreement"), and its obligations as a
participant in the Depositary, including the Depositary's Same Day Funds
Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by the maturity of Book-Entry Securities that may
be sold as a result of the solicitation of offers by an Agent. The Company may
establish a fixed set of interest rates and maturities for an offering period
("posting"). If the Company decides to change already posted rates, it will
promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Offered Securities, other
than those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it in whole or in part. Each Agent also
may make offers to the Company to purchase Book-Entry Securities as a Purchasing
Agent. The Company will have the sole right to accept offers to purchase Book-
Entry Securities and may reject any such offer in whole or in part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or
B-8
<PAGE>
rejection of an offer to purchase Book-Entry Securities. If the Company
accepts an offer to purchase Book-Entry Securities, it will confirm such
acceptance in writing to the Selling Agent or Purchasing Agent, as the case
may be, and the Trustee.
Communication of Sale Information to the Company by
Selling Agent and Settlement Procedures:
A. After the acceptance of an offer by the Company, the Selling
Agent or Purchasing Agent, as the case may be, will communicate promptly, but in
no event later than the time set forth under "Settlement Procedure Timetable"
below, the following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means:
(1) Principal amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate and the
initial interest payment date;
(3) Maturity Date;
(4) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency (it being understood that currently the Depositary
accepts deposits of Global Securities denominated in U.S.
dollars only);
(5) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(6) Issue Price;
(7) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(8) Net Proceeds to the Company;
(9) Settlement Date;
(10) If a redeemable Book-Entry Security, such of the following as
are applicable:
(i) Redemption Commencement Date,
B-9
<PAGE>
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date;
(11) If a Floating Rate Book-Entry Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates, and
(xi) Calculation Agent; and
(12) Name of the Trustee.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, the Company will communicate such Sale Information to the
Trustee by facsimile transmission or other acceptable written means. The
Company will assign a CUSIP number to the Global Security representing such
Book-Entry Security and then advise the Trustee and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
B-10
<PAGE>
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the Participant account maintained by the Depositary
on behalf of the Selling Agent or Purchasing Agent, as the case
may be;
(5) The interest payment period;
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date for
the Depositary's purposes (which, in the case of Floating Rate
Offered Securities which reset weekly shall be the date five
calendar days immediately preceding the applicable Interest
Payment Date and in the case of all other Book-Entry Securities
shall be the Regular Record Date, as defined in the Offered
Security) and, if calculable at that time, the amount of
interest payable on such Interest Payment Date per $1,000
principal amount.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the
Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i)
debit such Book-Entry Security to the Trustee's participant account and credit
such Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission or discount, as applicable. The entry of such a deliver order shall
constitute a representation and warranty by the Trustee to the Depositary that
(a) the Global Security representing such Book-Entry Security has been issued
and authenticated
B-11
<PAGE>
and (b) the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary (i) to
debit such Book-Entry Security to such Agent's participant account and credit
such Book-Entry Security to the participant accounts of the Participants with
respect to such Book-Entry Security and (ii) to debit the settlement accounts of
such Participants and credit the settlement account of such Agent for an amount
equal to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "F" and "G" will be settled in accordance
with SDFS operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer
to an account of the Company previously specified by the Company to the Trustee
funds available for immediate use in the amount transferred to the Trustee in
accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security
to the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or
the Trustee, promptly furnish to the Company or the Trustee a list of the names
and addresses of the Participants for whom the Depositary has credited Book-
Entry Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 3:00 p.m., New York City time, on the second
B-12
<PAGE>
Business Day following the receipt of the Sale Information, or if the Company
and the purchaser agree to settlement on the Business Day following the date
of acceptance, not later than noon, New York City time, on such date. The
Company will arrange to have ten Pricing Supplements filed with the Commission
not later than the close of business of the Commission on the fifth Business
Day following the date on which such Pricing Supplement is first used.
Pricing Supplements will be delivered to the Selling Agent or
Purchasing Agent as follows:
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Attn: Joseph D. Fashano
Telephone: (212) 909-2107
Telecopy: (212) 318-0532
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attn: Karen Robinson
MTN Desk Assistant
Telephone: (212) 902-8401
Telecopy: (212) 902-0658
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attn: Patricia O'Connell,
MTN Desk Assistant
Telephone: (212) 902-1482
Telecopy: (212) 902-0658
Merrill Lynch & Co. - Tritech Services
4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
Attn: Final Prospectus Unit/Nachman Kimerling
Telephone: (908) 878-6525/26/27
Telecopy: (908) 878-6530
with a copy to:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center, North Tower
23rd Floor
New York, NY 10281-1323
Attn: MTN Product Management
Telephone: (212) 449-7582
Telecopy: (212) 449-2234
J.P. Morgan Securities Inc.
60 Wall Street
3rd Floor
New York, New York 10260
Attn: Medium Term Note Desk
Telecopy: (212) 648-5907
B-13
<PAGE>
Delivery of Confirmation and Prospectus
to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders accepted by the Company
will be settled on the fifth Business Day pursuant to the timetable for
settlement set forth below unless the Company and the purchaser agree to
settlement on another day which shall be no earlier than the next Business Day.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by an Agent, as agent,
and accepted by the Company for settlement on the first Business Day after the
sale date, Settlement Procedures "A" through "I" 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> <C>
A 5:00 p.m. on the Business Day following
the acceptance of an offer by
the Company or 10:00 a.m. on
the Business Day prior to the
settlement date, whichever is
earlier
Settlement
Procedure Time
---------- ----
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
</TABLE>
B-14
<PAGE>
<TABLE>
<S> <C> <C>
D 9:00 a.m. on settlement date
E 10:00 a.m. on settlement date
F-G 2:00 p.m. on settlement date
H 4:45 p.m. on settlement date
I 5:00 p.m. on settlement date
</TABLE>
If a sale is to be settled more than one Business Day after the sale
date, Settlement Procedures "B" and "C" shall be completed as soon as
practicable but not later than 2:00 p.m. on the first Business Day after the
sale date. If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day before
the settlement date. Settlement Procedure "H" 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 Security is rescheduled or cancelled,
the Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participation Terminal System, a cancellation message
to such effect by no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled settlement date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal
System, as soon as practicable a withdrawal message instructing the Depositary
to debit such Book-Entry Security to the Trustee's participant account,
provided that the Trustee's participant account contains a principal amount of
the Global Security representing such Book-Entry Security that is at least
equal to the principal amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Securities represented by a
Global Security, the Trustee will mark such Global Security "cancelled", make
appropriate entries in the Trustee's records and send such cancelled Global
Security to the Company. The CUSIP number assigned to such Global Security
shall, in accordance with CUSIP Service
B-15
<PAGE>
Bureau procedures, be cancelled and not immediately reassigned. If a
withdrawal message is processed with respect to one or more, but not all, of
the Book-Entry Securities represented by a Global Security, the Trustee will
exchange such Global Security for two Global Securities, one of which shall
represent such Book-Entry Security or Securities and shall be cancelled
immediately after issuance and the other of which shall represent the
remaining Book-Entry Securities previously represented by the surrendered
Global Security and shall bear the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry Security is not timely paid
to the Participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security "free" to the
Trustee's participant account and shall notify the Company and the Trustee
thereof. Thereafter, the Trustee will (i) immediately notify the Company of
such order and the Company shall transfer to such Agent funds available for
immediate use in an amount equal to the price of such Book-Entry Security which
was transferred to the Company in accordance with Settlement Procedure I, and
(ii) 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 applicable Agent to perform its obligations hereunder
or under the Distribution Agreement, the Company will reimburse such Agent on an
equitable basis for the loss of its 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 Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Securities to
have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D" for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time
B-16
<PAGE>
to time, furnish the Trustee with a sufficient quantity of Offered Securities.
B-17
<PAGE>
EXHIBIT C
Restrictions on Sale of
Medium-Term Notes
No Offered Securities denominated in a currency other than United
States dollars will be sold or offered for sale in the country issuing such
currency.
C-1
<PAGE>
REGISTERED
No. FXR-
CUSIP NO.
Exhibit 4(b)(i)
PHH CORPORATION MEDIUM-TERM NOTE
(FIXED RATE)
If this Debt Security is registered in the name of The Depository Trust
Company (the "Depositary") (55 Water Street, New York, New York) or its
nominee, this Debt Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary unless and until this Debt
Security is exchanged in whole or in part for Debt Securities in
definitive form. Unless this certificate is presented by an authorized
representative of the Depositary to the Issuer or its agent for
registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of the Depositary and any
payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
ORIGINAL ISSUE DATE: PRINCIPAL AMOUNT AND CURRENCY
OR CURRENCY UNIT:
OPTION TO RECEIVE PAYMENTS
IN SPECIFIED CURRENCY:
YES: NO:
_______ _______
INTEREST RATE: MATURITY DATE:
REDEMPTION PROVISIONS, IF ANY: REPAYMENT PROVISIONS, IF ANY:
REDEEMABLE ON OR AFTER: OPTIONAL REPAYMENT DATE:
INITIAL REDEMPTION PERCENTAGE: OPTIONAL REPAYMENT PRICE:
ANNUAL REDEMPTION PERCENTAGE
REDUCTION:
OTHER PROVISIONS: EXCHANGE RATE AGENT:
<PAGE>
If this Debt Security is issued with original issue discount, the
following information is supplied for purposes of Sections 1273 or 1275 of the
Internal Revenue Code: Issue Price (for each $1,000 principal amount):
$________; Original Issue Discount Under Section 1272 of the Internal Revenue
Code (for each $1,000 principal amount): $________; Yield To Maturity:
_____________; Method Used to Determine Yield To Maturity For Short Accrual
Period of _____________ to ______________: _____________; and Original Issue
Discount for Short Accrual Period of _________ to ________: _________.
PHH CORPORATION, a corporation duly organized and existing under the
laws of the State of Maryland (herein called the "Corporation"), for value
received, hereby promises to pay to ________________________ or registered
assigns the principal sum of _______________________ (any currency or currency
unit other than U.S. dollars being hereinafter referred to as a "Specified
Currency"), on the Stated Maturity shown above (the "Maturity Date"), in such
coin or currency specified above as at the time of payment shall be legal tender
for the payment of public and private debts, and to pay interest thereon from
the Original Issue Date shown above or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
February 15 and August 15 in each year (the "Interest Payment Dates") commencing
with the Interest Payment Date immediately following the Original Issue Date
shown above, and on the Maturity Date, at the interest rate per annum shown
above until the principal hereof is paid or made available for payment;
provided, however, that if the Original Issue Date shown above is after a
- ------------------
Regular Record Date and on or before the immediately following Interest Payment
Date, interest payments will commence on the Interest Payment Date following the
next succeeding Regular Record Date to the registered owner on such next Regular
Record Date and provided, further, that, unless the Holder hereof is entitled to
-------- -------
make, and has made, a Specified Currency Payment Election (as hereinafter
defined) with respect to one or more such payments, the Corporation will make
all such payments in U.S. dollars in amounts determined as set forth below. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture dated as of March 1, 1993
(hereinafter called the "Indenture"), between the Corporation and The First
National Bank of Chicago, as trustee (hereinafter called the "Trustee", which
term includes any successor trustee under the Indenture), be paid to the Person
in whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest, which shall
be the January 31 or July 31 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date;
-1-
<PAGE>
provided, however, that interest payable at the Maturity Date will be paid to
- -------- -------
the Person to whom said principal sum is payable. Any interest not so
punctually paid or duly provided for 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 Securities) 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, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.
Payment of the principal of (and premium, if any) and any interest on
this Note due to the Holder hereof at the Maturity Date will be made in
immediately available funds, upon surrender of this Note at the offices of the
Trustee, 14 Wall Street, Eighth Floor, New York, New York 10005, provided that
the Note is presented to the Trustee or its agent in time for the Trustee to
make such payments in such funds in accordance with its normal procedures.
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) will be made by
check mailed to the address of the person entitled thereto at the holder's last
address as it appears on the Security Register (which in the case of Global
Notes will be a nominee of The Depository Trust Company). Notwithstanding the
foregoing, a holder of $10,000,000 or more in aggregate principal amount of
Notes of like tenor and term shall, upon written request, be entitled to receive
payments of interest (other than interest on said Notes due to the holder at
Maturity) by wire transfer to an account maintained by such holder with a bank
located in the United States of America.
If this Note is denominated in a Specified Currency, payment of the
principal of (and premium, if any) and any interest due on this Note will be
made in Specified Currency provided that the Holder hereof is entitled to make,
and has made, a Specified Currency Payment Election with respect to such
payments, the Exchange Rate Agent is able to convert such payments as provided
below, the Specified Currency is not unavailable due to the imposition of
exchange controls or other circumstances beyond the control of the Corporation
and the Specified Currency is used by the government of the country issuing such
currency or for the settlement of transactions by public institutions of or
within the international banking community. If this Note is denominated in a
Specified Currency, the Holder hereof may elect to receive payments of
-2-
<PAGE>
principal of (and premium, if any) and interest in such Specified Currency (a
"Specified Currency Payment Election") by delivery of a written request for such
payment to the principal office of the Trustee, 14 Wall Street, Eighth Floor,
New York, New York 10005, on or prior to the Regular Record Date or at least
fifteen days prior to the Maturity Date, as the case may be. Such request may
be in writing (mailed or hand delivered) or by cable, telex or other form of
facsimile transmission. A Holder of a Foreign Currency Note may elect to
receive payment in the Specified Currency for all principal, premium, if any,
and interest payments and need not file a separate election for each payment.
Such election will remain in effect until revoked by written notice to the
Trustee, 14 Wall Street, Eighth Floor, New York, New York 10005, but written
notice of any such revocation must be received by the Trustee on or prior to the
Regular Record Date or at least fifteen days prior to the Maturity Date, as the
case may be.
In the event of an official redenomination of a foreign currency or
currency unit, the obligations of the Corporation with respect to payments
hereunder denominated or payable in such foreign currency or currency unit
shall, in all cases, be deemed immediately following such redenomination to
provide for payment of that amount of redenominated currency representing the
amount of such obligations immediately before such redenomination. In no event,
however, shall any adjustment be made to any amount payable hereunder as a
result of any change in the value of such foreign currency or currency unit
relative to any other currency due solely to fluctuations in exchange rates.
Any such designation for wire transfer purposes shall be made by
filing the appropriate information with the Trustee at its office, 14 Wall
Street, Eighth Floor, New York, New York 10005, on or prior to the Regular
Record Dates relating to the applicable Interest Payment Dates and any such
designation made with respect to any Note by a registered holder shall remain in
effect with respect to any further payments with respect to this Note payable to
such holder unless revoked or changed by written instructions received by the
Trustee from such holder, provided that any such written revocation or change
which is received by the Trustee after a Regular Record Date and before the
related Interest Payment Date shall not be effective with respect to such
Interest Payment Date.
If any Interest Payment Date or the Maturity Date (or date of
redemption or repayment) of this Note would fall on any day which is not a
Business Day, the payment of interest and principal (and premium, if any) 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 the due date and no interest shall
accrue for the period from and after such date.
-3-
<PAGE>
This Note is one of a duly authorized issue of securities of the
Corporation (hereinafter called the "Securities"), issued and to be issued in
one or more series under the Indenture, to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
respective rights, obligations, duties and immunities thereunder of the
Corporation, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. As
provided in the Indenture, the 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 in the Indenture
provided or permitted. This Note is one of a series of the Securities, which
series is unlimited in aggregate principal amount and is designated as the
Medium-Term Notes (the "Notes") of the Corporation, of which series the
Corporation initially has designated $2,000,000,000 aggregate principal amount,
or the equivalent thereof in foreign currencies or currency units. The Notes
may be issued from time to time in various principal amounts and currencies or
currency units, mature at different times, bear interest, if any, at different
rates, be redeemable at different times or not at all, and may have other terms
as may be designated with respect to a Note.
Interest payments for this Note will include interest accrued to but
excluding the Interest Payment Dates. Interest payments for this Note shall be
computed and paid on the basis of a 360-day year of twelve 30-day months.
If this Note is denominated in a Specified Currency, unless the Holder
hereof has elected otherwise, payment in respect of a Foreign Currency Note
shall be made in U.S. dollars based upon the exchange rate as determined by the
Exchange Rate Agent based on the quotation for such non-U.S. dollar currency or
composite currency appearing at approximately 11:00 a.m., New York City time, on
the second Business Day (as defined below) preceding the applicable date of
payment, on the bank composite or multi-contributor pages of the Telerate
Monitor Foreign Exchange Service (or, if such service is not then available to
the Exchange Rate Agent, the Reuters Monitor Foreign Exchange Service or, if
neither is available, on a comparable display or in a comparable manner as the
Corporation and the Exchange Rate Agent shall agree), for the first three banks
(or two, if three are not available), in
-4-
<PAGE>
chronological order, appearing on a list of banks agreed to by the Corporation
and the Exchange Rate Agent prior to such second Business Day, which are
offering quotes. The Exchange Rate Agent shall then select from among the
selected quotations in a manner specified in the applicable Pricing Supplement.
If fewer than two bids are available, then such conversion will be based on the
Market Exchange Rate (as defined below) as of the second Business Day preceding
the applicable payment date. "Business Day" means any day, other than a
Saturday or Sunday, that meets each of the following applicable requirements:
the day is (a) not a legal holiday or a day on which banking institutions are
authorized or required by law or regulation to be closed in The City of New
York, (b) if the Note is denominated or payable in a Specified Currency other
than U.S. dollars, (i) not a day on which banking institutions are authorized or
required by law or regulation to close in the major financial center of the
country issuing the Specified Currency (which in the case of ECU shall include
the financial center of each country that issues a component currency of the
ECU) and (ii) a day on which banking institutions in such financial center are
carrying out transactions in such Specified Currency and (c) with respect to
LIBOR Notes (as defined below), also a London Banking Day. "London Banking Day"
means any day on which dealings on deposits in U.S. dollars are transacted in
the London interbank market. "Market Exchange Rate" means the noon U.S. dollar
buying rate in The City of New York for cable transfers of the relevant currency
as certified for customs purposes by the Federal Reserve Bank of New York. If
no Market Exchange Rate as of the second Business Day preceding the applicable
payment date is available, payments will be made in the Specified Currency,
unless such Specified Currency is unavailable due to the imposition of exchange
controls or to other circumstances beyond the Corporation's control, in which
case payment will be made in U.S. dollars. All currency exchange costs will be
borne by the Holders of such Notes by deductions from such payments.
Unless otherwise indicated above, this Note may not be redeemed by the
Corporation prior to Maturity. If so indicated above, this Note may be redeemed
on any date on or after the date set forth above, either in whole or in part, at
the option of the Corporation, at a redemption price equal to the product of the
principal amount of this Note to be redeemed multiplied by the Redemption
Percentage. The Redemption Percentage shall initially equal the Initial
Redemption Percentage specified above, 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 above, until the Redemption Percentage
is equal to 100%.
-5-
<PAGE>
If this Note is subject to redemption, notice of redemption shall be
mailed to the Registered Holders of the Notes designated for redemption at their
addresses as the same shall appear in the Security Register not less than 30 and
not more than 60 days prior to the date of redemption, subject to all conditions
and provisions of the Indenture. In the event of redemption of this Note in
part, a new Note for the amount of the unredeemed portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof.
Unless otherwise indicated above, this Note may not be redeemed prior
to Maturity. If so indicated above, this Note may be payable prior to Maturity
at the option of the Holder on the Optional Repayment Dates shown above at the
Optional Repayment Prices shown above, together with accrued interest to the
date of repayment. In order for this Note to be repaid, the Trustee must
receive at least 30 but not more than 45 days prior to an Optional Repayment
Date (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 of trust company in the United
States of America setting forth the name of the Holder of this Note, the
Principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of this Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that this Note with
the form below entitled "Option to Elect Repayment" duly completed will be
received by the Trustee not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter. If the procedure described
in clause (ii) of the preceding sentence is followed, this Note with form duly
completed must be received by the Trustee by such fifth Business Day. Any
tender of this Note for repayment shall be irrevocable. The repayment option
may be exercised by the Holder of this Note for less than the entire principal
amount of the Note provided that the principal amount of this Note remaining
outstanding after repayment is an authorized denomination. Upon such partial
repayment, this Note shall be cancelled and a new Note or Notes for the
remaining principal amount hereof shall be issued in the name of the Holder of
this Note.
If an Event of Default with respect to Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
-6-
<PAGE>
The Indenture permits, with certain exceptions as therein provided,
the amendment or supplementing thereof and the modification of the rights and
obligations of the Corporation and the rights of the Holders of the Securities
of each series to be affected under the Indenture at any time by the Corporation
and the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Securities at the time outstanding of each series to be
affected. The Indenture also contains a provision permitting the Holders of not
less than a majority in aggregate principal amount of the Securities of any
series at the time outstanding, on behalf of the Holders of all Securities of
such series, to waive any past defaults under the Indenture with respect to such
series of Securities 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.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Note of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holder of not less
than 25% in principal amount of the Notes of this series at the time outstanding
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in principal amount of the Notes of this
series at the time outstanding a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days, provided,
---------
however, that such limitations do not apply to a suit instituted by the Holder
- -------
hereof for the enforcement of payment of the principal of (and premium, if any)
or interest on this Note on or after the respective due date expressed herein.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Corporation, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, places and rate herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Security
Register, upon surrender of this
-7-
<PAGE>
Note for registration of transfer at the office or agency of the Corporation in
any place where the principal of (and premium, if any) and interest on this Note
are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Corporation and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of this series of like tenor and of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees. As provided in the Indenture and subject
to certain limitations therein set forth, this Note is exchangeable for the same
aggregate principal amount of Notes of like tenor and of authorized
denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple of $1,000
in excess thereof (or in the case of Securities denominated in a Specified
Currency, in such minimum denomination not less than the equivalent of $1,000 in
such Specified Currency on the basis of the Market Exchange Rate).
Prior to due presentation of this Note for registration of transfer,
the Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note is overdue and neither the Corporation,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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 officer of the Trustee or its duly authorized agent under the
Indenture.
-8-
<PAGE>
IN WITNESS WHEREOF, PHH CORPORATION has caused this instrument to be
signed by its duly authorized officers, and has caused its corporate seal or a
facsimile thereof to be affixed hereto or imprinted hereon.
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities PHH CORPORATION
of the series designated herein
issued under the within-mentioned
Indenture. By:
-----------------------
[Title]
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee Attest:
By:
----------------------------- --------------------------
Authorized Signatory Corporate Secretary
[SEAL]
-9-
<PAGE>
ASSIGNMENT FORM
-----------------------------------------------
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 PHH CORPORATION and does hereby irrevocably constitute and
appoint
________________________________________________________________________________
attorney to transfer the said Note on the books of the Corporation, with full
power of substitution in the premises.
Dated:__________________ Your Signature:____________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the within instrument in every particular, without alteration or
enlargement or any change whatever.
-10-
<PAGE>
---------------------------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Corporation to repay $__________ principal amount of the within Note, pursuant
to its terms, on the "Optional Repayment Date" first occurring after the date of
receipt of the within Note as specified below, together with Interest thereon
accrued to the date of repayment, to the undersigned
at
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address of the Undersigned)
and to issue to the Undersigned, pursuant to the terms of the Indenture, a new
Note or Notes representing the remaining principal amount of this Note, if any.
For the Option to Elect Repayment to be effective, this Note with the
Option to Elect Repayment duly completed must be received by the Corporation
within the relevant time period set forth above at the offices of the Trustee,
at 14 Wall Street, Eighth Floor, New York, New York 10005.
Dated:
----------------------------------------
NOTICE: The signature to this Option to
Elect Repayment must correspond with the
name as written upon the within Note in
every particular without alteration or
enlargement or any change whatsoever.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or __________________________
Other Identifying Number of Assignee __________________________
- --------------------------------------------------------------------------------
-11-
<PAGE>
Please Print or Type Name and Address Including Zip Code of Assignee of
the within Note and all rights hereunder, hereby irrevocably constituting and
appointing _________________ attorney to transfer such Note on the books of
PHH Corporation with full power of substitution in the premises.
Dated:_______________ ________________________________________
Signature
----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the within Note in every
particular without alteration or
enlargement or any change whatsoever.
-12-
<PAGE>
Exhibit 4(b)(ii)
REGISTERED
No. FLR-
CUSIP NO.
PHH CORPORATION
MEDIUM-TERM NOTE
(FLOATING RATE)
If this Debt Security is registered in the name of The
Depository Trust Company (the "Depositary") (55 Water
Street, New York, New York) or its nominee, this Debt
Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee
of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor
Depositary unless and until this Debt Security is
exchanged in whole or in part for Debt Securities in
definitive form. Unless this certificate is presented by
an authorized representative of the Depositary to the
Issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in
the name of Cede & Co. or such other name as requested by
an authorized representative of the Depositary and any
payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.
PRINCIPAL AMOUNT
AND CURRENCY OR
CURRENCY UNIT: INITIAL INTEREST RATE: MATURITY DATE:
ORIGINAL ISSUE DATE: INDEX MATURITY: SPREAD: +
-
SPREAD MULTIPLIER: %
OPTION TO RECEIVE
PAYMENT IN SPECIFIED
CURRENCY:
YES:_____ NO:_____
BASE RATE: [_] COMMERCIAL PAPER RATE [_] CD RATE
[_] FEDERAL FUNDS [_] LIBOR [_] TREASURY RATE
EFFECTIVE RATE LIBOR REUTERS_____
LIBOR TELERATE____
[_] PRIME RATE [_] Other_________________
(See Below)
MAXIMUM INTEREST RATE: % INTEREST PAYMENT PERIOD:
(monthly, quarterly,
semi-annually or annually)
MINIMUM INTEREST RATE: % INTEREST RATE RESET PERIOD:
(daily, weekly, monthly,
quarterly, semi-annually or
annually)
INTEREST RESET DATES:
<PAGE>
INTEREST PAYMENT DATES: REPAYMENT PROVISIONS, IF ANY:
INTEREST DETERMINATION DATES: OPTIONAL REPAYMENT DATE:
REDEMPTION PROVISIONS, IF ANY: OPTIONAL REPAYMENT PRICE:
REDEEMABLE ON OR AFTER:
INITIAL REDEMPTION PERCENTAGE:
ANNUAL REDEMPTION PERCENTAGE REDUCTION:
OTHER PROVISIONS:
-1-
<PAGE>
If this Debt Security is issued with original issue discount, the
following information is supplied for purposes of Sections 1273 or 1275 of the
Internal Revenue Code: Issue Price (for each $1,000 principal amount):
$__________; Original Issue Discount Under Section 1272 of the Internal Revenue
Code (for each $1,000 principal amount): $__________; Yield To Maturity:
____________; Method Used to Determine Yield To Maturity For Short Accrual
Period of __________ to __________: _____________; and Original Issue Discount
for Short Accrual Period of ___________ to ___________: ____________.
PHH CORPORATION, a corporation duly organized and existing under the
laws of the State of Maryland (herein called the "Corporation"), for value
received, hereby promises to pay to __________________________________________
or registered assigns the principal sum of ________________________ (any
currency or currency unit other than U.S. dollars being hereinafter referred to
as a "Specified Currency"), on the Stated Maturity shown above (the "Maturity
Date"), in such coin or currency specified above as at the time of payment shall
be legal tender for the payment of public and private debts, and to pay interest
thereon from the Original Issue Date shown above (the "Issue Date") or from the
most recent Interest Payment Date (as hereinafter defined) to which interest has
been paid or duly provided for, in arrears on the Interest Payment Dates set
forth above ("Interest Payment Dates"), and on the Maturity Date, commencing
with the Interest Payment Date immediately following the Issue Date, at the
interest rate per annum determined in accordance with the provisions hereof,
depending on the Base Rate specified above, until the principal hereof is paid
or made available for payment, provided, however, that if the Issue Date is
-------- -------
after a Regular Record Date, as hereinafter defined, and on or before the
immediately following Interest Payment Date, the first payment of interest will
be made on the Interest Payment Date following the next succeeding Regular
Record Date to the registered owner on such next Regular Record Date and
provided, further, that unless the Holder hereof is entitled to make, and has
- -------- -------
made, a Specified Currency Payment Election (as hereinafter defined) with
respect to one or more such payments, the Corporation will make all such
payments in U.S. dollars in amounts determined as set forth below. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture dated as of March 1, 1993 (hereinafter
called the "Indenture"), between the Corporation and The First National Bank of
Chicago, as trustee (hereinafter called the "Trustee", which term includes any
successor trustee under the Indenture), be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which unless otherwise
specified above shall be the fifteenth day (whether or not a Business Day) next
preceding such Interest Payment Date, provided, however, that interest payable
-------- -------
at the Maturity Date will be paid to the Person
-2-
<PAGE>
to whom said principal sum is payable. Any interest not so punctually paid or
duly provided for 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 Securities) 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, notice whereof to be given to Holders of Securities not less
than 10 days prior to such Special Record Date be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.
Payment of the principal of (and premium, if any) and any interest on
this Note due to the Holder hereof at the Maturity Date will be made in
immediately available funds, upon surrender of this Note at the offices of the
Trustee, 14 Wall Street, Eighth Floor, New York, New York 10005, provided that
the Note is presented to the Trustee in time for the Trustee to make such
payments in such funds in accordance with its normal procedures. Payment of
interest on this Note due on Interest Payment Date (other than interest on this
Note due to the holder hereof at Maturity) will be made by check mailed to the
address of the person entitled thereto at the holder's last address as it
appears on the Security Register (which in the case of Global Notes will be a
nominee of The Depository Trust Company). Notwithstanding the foregoing, a
holder of $10,000,000 or more in aggregate principal amount of Notes of like
tenor and term shall, upon written request, be entitled to receive payments of
interest (other than interest on said Notes due to the holder at Maturity) by
wire transfer to an account maintained by such holder with a bank located in the
United States of America.
If this Note is denominated in a Specified Currency, payment of the
principal of (and premium, if any) and any interest due on this Note will be
made in Specified Currency provided that the Holder hereof is entitled to make,
and has made, a Specified Currency Payment Election with respect to such
payments, the Exchange Rate Agent is able to convert such payments as provided
below, the Specified Currency is not unavailable due to the imposition of
exchange controls or other circumstances beyond the control of the Corporation
and the Specified Currency is used by the government of the country issuing such
currency or for the settlement of transactions by public institutions of or
within the international banking community. If this Note is denominated in a
Specified Currency, the Holder hereof may elect to receive payments of principal
of (and premium, if any) and interest in such Specified Currency (a "Specified
Currency Payment Election") by delivery of a written request for such payment to
the principal office of the Trustee, 14 Wall Street, Eighth Floor, New York, New
York 10005, on or prior to the Regular Record Date or at least fifteen days
prior to the Maturity Date, as the case may be.
-3-
<PAGE>
Such request may be in writing (mailed or hand delivered) or by cable, telex or
other form of facsimile transmission. A Holder of a Foreign Currency Note may
elect to receive payment in the Specified Currency for all principal, premium,
if any, and interest payments and need not file a separate election for each
payment. Such election will remain in effect until revoked by written notice to
the Trustee, 14 Wall Street, Eighth Floor, New York, New York 10005, but written
notice of any such revocation must be received by the Trustee on or prior to the
Regular Record Date or at least fifteen days prior to the Maturity Date, as the
case may be.
In the event of an official redenomination of a foreign currency or
currency unit, the obligations of the Corporation with respect to payments
hereunder denominated or payable in such foreign currency or currency unit
shall, in all cases, be deemed immediately following such redenomination to
provide for payment of that amount of redenominated currency representing the
amount of such obligations immediately before such redenomination. In no event,
however, shall any adjustment be made to any amount payable hereunder as a
result of any change in the value of such foreign currency or currency unit
relative to any other currency due solely to fluctuations in exchange rates.
Any such designation for wire transfer purposes shall be made by
filing the appropriate information with the Trustee at its offices, 14 Wall
Street, Eighth Floor, New York, New York 10005, on or prior to the Regular
Record Dates relating to the applicable Interest Payment Dates and, any such
designation made with respect to any Note by a registered holder shall remain in
effect with respect to any further payments with respect to this Note payable to
such holder unless revoked or changed by written instructions received by the
Trustee from such holder, provided that any such written revocation or change
which is received by the Trustee after a Regular Record Date and before the
related Interest Payment Date shall not be effective with respect to such
Interest Payment Date.
If the Maturity Date (or date of redemption or repayment) this Note
would fall on any day which is not a Business Day, the payment of interest and
principal (and premium, if any) 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
the due date and no interest shall accrue for the period from and after such
date.
This Note is one of a duly authorized issue of securities of the
Corporation (hereinafter called the "Securities"), issued and to be issued in
one or more series under the Indenture, to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
respective rights, obligations, duties and immunities thereunder of the
Corporation, the Trustee and the Holders of the Securities and of the terms upon
which the Securities
-4-
<PAGE>
are, and are to be, authenticated and delivered. As provided in the Indenture,
the 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 in the Indenture provided or permitted. This
Note is one of a series of the Securities, which series is unlimited in
aggregate principal amount and is designated as the Medium-Term Notes (the
"Notes") of the Corporation, of which series the Corporation initially has
designated $2,000,000,000 aggregate principal amount, or the equivalent thereof
in foreign currencies or currency units. The Notes may be issued from time to
time in various principal amounts and currencies or currency units, mature at
different times, bear interest, if any, at different rates, be redeemable at
different times or not at all, and have other terms as may be designated with
respect to a Note.
Commencing with the first Interest Reset Date specified herein
following the Issue Date, the rate at which interest on this Note is payable
shall be adjusted daily, weekly, monthly, quarterly, semi-annually or annually
as shown above under Interest Rate Reset Period; unless otherwise specified
above, the Interest Reset Dates will be, if this Note resets daily, each
Business Day; if this Note (unless this Note is a Treasury Rate Note) resets
weekly, Wednesday of each week; if this Note is a Treasury Rate Note that resets
weekly, Tuesday of each week (except as provided below under "Determination of
Treasury Rate"); if this Note resets monthly, the third Wednesday of each month;
if this Note resets quarterly, the third Wednesday of February, May, August and
November of each year; if this Note resets semiannually, the third Wednesday of
the two months of each year specified above; and if this Note resets annually,
the third Wednesday of the month of each year specified above, provided,
--------
however, that (i) the interest rate in effect from the Issue Date to the first
- -------
Interest Reset Date specified above will be the Initial Interest Rate, and (ii)
the interest rate in effect hereon for the 10 days immediately prior to the
Maturity Date of this Note shall be the interest rate in effect on the 10th day
preceding said Maturity Date. Each such adjusted interest rate shall be
applicable on and after the Interest Reset Date to which it relates, to but not
including the next succeeding Interest Reset Date or until the Maturity Date, as
the case may be. If any Interest Reset Date specified above is a day that is
not a Business Day, such Interest Reset Date shall be postponed to the next day
that is a Business Day, except that if (i) the rate of interest on this Note
shall be determined in accordance with the provisions under the heading
"Determination of LIBOR" below, and (ii) such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day. Subject to applicable provisions of law and except as
specified
-5-
<PAGE>
herein, on each Interest Reset Date, the rate of interest on this Note shall be
the rate determined in accordance with the provisions under the relevant heading
and paragraphs below, as specified by the Base Rate set forth above. Unless
otherwise specified above, the Trustee shall be the Calculation Agent.
Unless otherwise specified above, interest will be payable, if this
Note resets daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of February, May, August and November of each year as
specified above; if this Note resets quarterly, on the third Wednesday of
February, May, August and November of each year; if this Note resets
semiannually, on the third Wednesday of the two months of each year specified
above; and if this Note resets annually, on the third Wednesday of the month of
each year specified above (each such day being an "Interest Payment Date"). If
an Interest Payment Date would otherwise fall on a day that is not a Business
Day, such Interest Payment Date shall be postponed to the next succeeding such
Business Day, except that, if the Base Rate specified above is LIBOR and such
Business Day is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day.
All percentages resulting from any calculation on this Note will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.),
----
9.876545% (or .0987645) would be rounded to 9.87655% (or .0987655), and all
dollar amounts used in or resulting from such calculation on this Note will be
rounded to the nearest cent with one half cent being rounded upward.
Determination of Commercial Paper Rate
- --------------------------------------
If the Base Rate on this Note is the Commercial Paper Rate, the
interest rate with respect to this Note shall equal the Money Market Yield
(calculated as described below) of the rate on each Interest Determination Date
designated above for commercial paper having the Index Maturity designated above
for commercial paper having the Index Maturity designated above as such rate is
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, under the heading "Commercial Paper." In
the event that such rate is not published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, the
Commercial Paper Rate will be the Money Market Yield (calculated as described
below) of the rate on each Interest Determination Date designated above for
commercial paper having the Index Maturity designated above 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" under the heading
"Commercial Paper." If such rate is not published by 3:00 P.M., New
-6-
<PAGE>
York City time, on such Calculation Date, the Commercial Paper Rate will be the
Money Market Yield of the arithmetic mean (each as rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point) of the offered rates, as
of 11:00 A.M., New York City time on such Interest Determination Date, of three
leading dealers of commercial paper in New York City selected by the Calculation
Agent for commercial paper having the Index Maturity designated above placed for
an industrial issuer whose bond rating is equivalent to the bond rating of the
Corporation at the Original Issue Date of this Note, from a nationally
recognized securities rating agency, provided, however, that if the dealers
-------- -------
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Commercial Paper Rate with respect to such Interest
Determination Date will be the Commercial Paper Rate in effect on such Interest
Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point) calculated in accordance with the following formula:
D x 360
Money Market Yield = ----------- x 100
360 - (DxM)
where "D" refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
If a Spread is designated above, this Note shall bear interest at the
Commercial Paper Rate plus or minus such Spread. If a Spread Multiplier is
designated above, this Note shall bear interest at the Commercial Paper Rate
multiplied by such Spread Multiplier.
The Commercial Paper Rate determined with respect to any Interest
Determination Date will become effective on and as of the second Business Day
following such Interest Determination Date (the "Commercial Paper Reset Date");
provided, however, that (i) the interest rate in effect for the period from the
- -------- -------
Issue Date to the first Commercial Paper Reset Date will be the Initial Interest
Rate specified above, and (ii) the interest rate in effect for the 10 days
immediately preceding the Maturity Date specified above will be the interest
rate in effect on the 10th day preceding such Maturity Date.
Determination of CD Rate
- ------------------------
If the Base Rate on this Note is the CD Rate, the interest rate with
respect to this Note shall equal the rate on each Interest Determination Date
designated above for negotiable certificates of deposit having the Index
Maturity designated above as published by the
-7-
<PAGE>
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, under the heading "CDs (Secondary Market)." In the event that such
rate is not published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate will be the rate on
such Interest Determination Date for negotiable certificates of deposit of the
Index Maturity designated above 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" under the heading "Certificates of Deposits." If such
rate is not published by 3:00 P.M., New York City time, on such Calculation
Date, the CD Rate will be the arithmetic mean (each as rounded, if necessary, to
the nearest one hundred-thousandth of a percentage point) of the secondary
market offered rates as of the opening of business, New York City time, on such
Interest Determination Date, of three leading non-bank dealers in negotiable
U.S. dollar certificates of deposit in New York City selected by the Calculation
Agent for negotiable certificates of deposits of major United States money
market banks of the highest credit standing (in the market for negotiable
certificates of deposit) with a remaining maturity closest to the Index Maturity
designated above in a denomination of $5,000,000; provided, however, that if the
-------- -------
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the CO Rate with respect to such Interest
Determination Date will be the CD Rate in effect on such Interest Determination
Date.
If a Spread is designated above, this Note shall bear interest at the
CD Rate plus or minus such Spread. If a Spread Multiplier is designated above,
this Note shall bear interest at the CO Rate multiplied by such Spread
Multiplier.
The CD Rate determined with respect to any Interest Determination Date
will become effective on and as of the second Business Day following such
Interest Determination Date (the "CD Reset Date"); provided, however, that (i)
-------- -------
the interest rate in effect for the period from the Issue Date to the first CD
Reset Date will be the Initial Interest Rate specified above, and (ii) the
interest rate in effect for the 10 days immediately preceding the Maturity Date
specified above will be the interest rate in effect on the 10th day preceding
such Maturity Date.
Determination of Federal Funds Effective Rate
- ---------------------------------------------
If the Base Rate on this Note is the Federal Funds Effective Rate, the
interest rate payable with respect to this Note shall equal, on each Interest
Determination Date designated above, the rate on that date for Federal Funds as
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(5l9), Selected Interest Rates," or any successor
publication of the Board of
-8-
<PAGE>
Governors, under the heading "Federal Funds (Effective)." In the event that
such rate is not published by 9:00 A.M., New York City time, on the Calculation
Date pertaining to such Interest Determination Date, the Federal Funds Effective
Rate will be the rate on such Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate is not published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Federal Funds Effective
Rate for such Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean (rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point) of the rates as of 11:00 A.M., New
York City time, on such Interest Determination Date for the last transaction in
overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in New York City selected by the Calculation Agent; provided,
--------
however, that if the brokers selected as aforesaid by the Calculation Agent are
- -------
not quoting as mentioned in this sentence, the Federal Funds Effective Rate with
respect to such Interest Determination Date will be the Federal Funds Effective
Rate in effect on such Interest Determination Date.
If a Spread is designated above, this Note shall bear interest at the
Federal Funds Effective Rate plus or minus such Spread. If a Spread Multiplier
is designated above, this Note shall bear interest at the Federal Funds
Effective Rate multiplied by such Spread Multiplier.
The Federal Funds Effective Rate determined with respect to any
Interest Determination Date will become effective on and as of the second
Business Day following such Interest Determination Date (the "Federal Funds
Effective Reset Date"); provided, however, that (i) the interest rate in effect
-------- -------
for the period from the Issue Date to the first Federal Funds Effective Reset
Date will be the Initial Interest Rate specified above, and (ii) the interest
rate in effect far the 10 days immediately preceding the Maturity Date specified
above will be the interest rate in effect on the 10th day preceding such
Maturity Date.
Determination of LIBOR
- ----------------------
LIBOR, with respect to any Interest Reset Date, will be determined by
the Calculation Agent in accordance with the following provisions:
(i) With respect to a LIBOR Interest Determination Date,
LIBOR will be either (a) the arithmetic mean of the offered
rates for deposits in U.S. dollars having the Index
Maturity designated above, commencing on the second London
Banking Day immediately following
-9-
<PAGE>
such LIBOR Interest Determination Date, that appears 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 designated above,
commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date, that
appears on the 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
as if LIBOR Telerate had been specified. If at least two
such offered rates appear on the Telerate Page 3750, 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 Telerate Page 3750, or if no
rate appears on the Reuters Screen LIBO Page, as
applicable, LIBOR in respect of such LIBOR Interest
Determiantion Date will be determined as if the parties had
specified the rate described in (ii) below.
(ii) On any LIBOR Interest Determination Date on which
fewer than two offered rates appear on the Reuters Screen
LIBO Page as specified in (i)(a) above, or on which no rate
appears on the 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 are offered
by four major banks in the London interbank market selected
by the Calculation Agent (the
-10-
<PAGE>
"Reference Banks") at approximately 11:00 A.M., London
time, on such LIBOR Interest Determination Date to prime
banks in the London interbank market, having the Index
Maturity designated 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.
$1,000,000 that is representative for a single transaction
in such market at such time. The Calculation Agent will
request the principal London office of each of such
Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBOR in respect of
such LIBOR Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of
the rates quoted by three major banks in New York City
selected by the Calculation Agent at approximately 11:00
A.M., New York City time, on such LIBOR Interest
Determination Date for loans in U.S. dollars to leading
European banks, having the Index Maturity designated in the
applicable Pricing Supplement, such loans 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. $1,000,000 that is
representative for a single transaction in such market at
such time; provided, however, that if the banks in New York
-------- -------
City selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, LIBOR with respect
to such LIBOR Interest Determination Date will be LIBOR in
effect on such LIBOR Interest Determination Date.
If a Spread is designated above, this Note shall bear interest at
LIBOR plus or minus such Spread. If a Spread Multiplier is designated above,
this Note shall bear interest at LIBOR multiplied by such Spread Multiplier.
LIBOR determined with respect to any Interest Determination Date will
become effective on and as of the second Business Day following such Interest
Determination Date (the "LIBOR Reset Date"); provided, however, that (i) he
-------- -------
interest rate in effect for the period
-11-
<PAGE>
from the Issue Date to the first LIBOR Reset Date will be the Initial Interest
Rate specified above, and (ii) the interest rate in effect for the 10 days
immediately preceding the Maturity Date specified above will be the interest
rate in effect on the 10th day preceding such Maturity Date.
Determination of Treasury Rate
- ------------------------------
If the Base Rate on this Note is the Treasury Rate, the interest rate
with respect to this Note shall equal the interest rate on each Interest
Determination Date designated above for the most recent auction of direct
obligations of the United States ("Treasury Bills") having the Index Maturity
designated above 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, under the heading "Pricing U.S.
Government Securities - Treasury Bills -- auction average (investment)." In the
event that such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Treasury
Rate shall be the auction average rate (expressed as a bond equivalent, rounded,
if necessary, to the nearest one hundred-thousandth of a percentage point, on
the basis of a year of 365 days or 366 days, as applicable, and applied on a
daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the result of the auction of Treasury Bills having
the Index Maturity designated above is not otherwise reported as provided above
by 3:00 P.M., New York City time, on such Calculation Date or, if no such
auction is held in a particular week, then the Treasury Rate shall be calculated
by the Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, on the basis of a year of 365 days or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean 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 designated above; provided,
--------
however, that if the dealers selected as aforesaid by the Calculation Agent are
- -------
not quoting as mentioned in this sentence, the Treasury Rate with respect to
such Interest Determination Date will be the Treasury Rate in effect on such
Determination Date.
If a Spread is designated above, this Note shall bear interest at the
Treasury Rate plus or minus such Spread. If a Spread Multiplier is designated
above, this Note shall bear interest at the Treasury Rate multiplied by such
Spread Multiplier.
-12-
<PAGE>
The Interest Determination Date pertaining to the Interest Reset Date
for this Note if the Base Rate designated above is the Treasury Rate (the
"Treasury Interest Determination Date") will be the day of the week in which
such Interest Reset Date falls on which Treasury Bills would normally be
auctioned. Treasury Bills are usually sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is usually held on
the Tuesday following, except that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Interest Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding week. If
an auction date shall fall on any Interest Reset Date for this Note if the Base
Rate designated above is the Treasury Rate, then such Interest Reset Date shall
instead be the first Business Day immediately following such auction date. The
interest rate in effect for the period from the Issue Date to the first Treasury
Reset Date will be the Initial Interest Rate specified above, and the interest
rate in effect for the 10 days immediately preceding the Maturity Date specified
above will be the interest rate in effect on the 10th day preceding such
Maturity Date.
Determination of Prime Rate
- ---------------------------
If the Base Rate on this Note is the Prime Rate, the interest rate
with respect to this Note shall equal, on each Interest Determination Date
designated above, the rate of interest set forth on the Interest Determination
Date as published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519)", under the heading "Bank Prime Loan." In the
event that such rate is not published by 9:00 A.M., New York City time on the
Calculation Date pertaining to such Interest Determination Date, the Prime Rate
in respect of such Interest Determination Date shall be determined by the
Calculation Agent and will be the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen NYMF Page (as
defined below) as such bank's prime rate or base lending rate as in effect for
that Interest Determination Date. If fewer than four such rates but more than
one such rate appear on the Reuters Screen NYMF Page for the Interest
Determination Date, the Prime Rate will be determined by the Calculation Agent
and will 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 Interest Determination Date by four major money center banks in
New York City selected by the Calculation Agent. If fewer than two such rates
appear on the Reuters Screen NYMF Page, the Prime Rate will be determined by the
Calculation Agent on the basis of the rates furnished in New York City by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, having total
equity capital of at least U.S. $500,000,000 and being subject to supervision or
examination by Federal or State authority, selected by
-13-
<PAGE>
the Calculation Agent to provide such rate or rates; provided, however, that if
-------- -------
the banks selected as aforesaid are not quoting as mentioned in this sentence,
the Prime Rate will be the Prime Rate in effect on such Interest Determination
Date. "Reuters Screen NYMF Page" means the display designated as page "NYMF" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
If a Spread is designated above, this Note shall bear interest at the
Prime Rate plus or minus such Spread. If a Spread Multiplier is designated
above, this Note shall bear interest at the Prime Rate multiplied by such Spread
Multiplier.
The Prime Rate determined with respect to any Prime Interest
Determination Date will become effective on and as of the second Business Day
following such Interest Determination Date (the "Prime Reset Date"); provided,
--------
however, that (i) the interest rate in effect for the period from the Issue Date
- -------
to the first Prime Reset Date will be the Initial Interest Rate specified above,
and (ii) the interest rate in effect for the 10 days immediately preceding the
Maturity Date specified above will be the interest rate in effect on the 10th
day preceding such Maturity Date.
Notwithstanding the determinations under the foregoing paragraphs with
respect to the applicable Base Rate, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown above. The Calculation Agent shall calculate the
interest rate on this Note in accordance with the foregoing relevant section
applicable to the Base Rate of this Note, on or before each Calculation Date.
The interest rate on this Note will in no event be higher than the
maximum interest rate permitted under the laws of the State of New York as the
same may be modified by the United States law of general applicability.
The Calculation Agent will, upon the request of the Holder of this
Note, provide to such Holder the interest rate of this Note then in effect and
the interest rate which will become effective as a result of a determination
made with respect to the most recent Interest Determination Date with respect to
this Note.
If any Interest Payment Date specified above would otherwise be a day
that is not a Business Day, the Interest Payment Date shall be postponed to the
next day that is a Business Day, except that if (i) the rate of interest on this
Note shall be determined in accordance with the provisions under the heading
"Determination of LIBOR" above, and (ii) such Business Day is in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
-14-
<PAGE>
preceding Business Day. "Business Day" means any day other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized by law or regulation to close both in New York City and, if the
rate of interest on this Note shall be determined in accordance with the
provisions under the heading "Determination of LIB0R" above, in the City of
London. "London Banking Day" means any day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market.
The Calculation Date, if applicable, pertaining to any Interest
Determination Date is the 10th calendar day after such Interest Determination
Date or, if any such day is not a Business Day, the next succeeding Business
Day.
Interest payments for this Note will include interest accrued from and
including the immediately preceding Interest Payment Date in respect of which
interest has been paid to but excluding the Interest Payment Date; provided,
--------
however, that if the Interest Reset Dates with respect to this Note are daily or
- -------
weekly, interest payable on any Interest Payment Date will include interest
accrued from but excluding the second Regular Record Date preceding the
applicable Interest Payment Date (or from and including the date of issue, if no
interest has been paid with respect to this Note) through and including the
Regular Record Date next preceding the applicable Interest Payment Date, except
that interest payable on maturity (or, if applicable, redemption or repayment)
will include interest accrued to but excluding such date. Accrued interest
hereon from the Issue Date or from the last date for which interest hereon has
been paid, as the case may be, shall be an amount calculated by multiplying the
principal amount of this Note as set forth above by an accrued interest factor.
Such accrued interest factor shall be computed by adding the interest factors
calculated for each day from the Issue Date, or from the last date to which
interest shall have been paid, as the case may be, to the date for which accrued
interest is being calculated. The interest factor (expressed as a decimal
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point) for each such day shall be computed by dividing the interest rate
(expressed as a decimal rounded, if necessary, to the nearest one hundred-
thousandth of a percentage point) applicable to such day by 360, in the case of
the Commercial Paper Rate, CD Rate, LIBOR, Prime Rate or Federal Funds Effective
Rate, or by the actual number of days in the year in the case of the Treasury
Rate.
If this Note is denominated in a Specified Currency, unless the Holder
hereof has elected otherwise, payment in respect of a Foreign Currency Note
shall be made in U.S. dollars based upon the exchange rate as determined by the
Exchange Rate Agent based on the quotation for such non-U.S. dollar currency or
composite currency appearing at approximately 11:00 a.m., New York City time, on
the second Business Day (as defined below) preceding the applicable date
-15-
<PAGE>
of payment, on the bank composite or multi-contributor pages of the Telerate
Monitor Foreign Exchange Service (or, if such service is not then available to
the Exchange Rate Agent, the Reuters Monitor Foreign Exchange Service or, if
neither is available, on a comparable display or in a comparable manner as the
Corporation and the Exchange Rate Agent shall agree), for the first three banks
(or two, if three are not available), in chronological order, appearing on a
list of banks agreed to by the Corporation and the Exchange Rate Agent prior to
such second Business Day, which are offering quotes. The Exchange Rate Agent
shall then select from among the selected quotations in a manner specified in
the applicable Pricing Supplement. If fewer than two bids are available, then
such conversion will be based on the Market Exchange Rate (as defined below) as
of the second Business Day preceding the applicable payment date. "Business
Day" means any day, other than a Saturday or Sunday, that meets each of the
following applicable requirements: the day is (a) not a legal holiday or a day
on which banking institutions are authorized or required by law or regulation to
be closed in The City of New York, (b) if the Note is denominated or payable in
a Specified Currency other than U.S. dollars, (i) not a day on which banking
institutions are authorized or required by law or regulation to close in the
major financial center of the country issuing the Specified Currency (which in
the case of ECU shall include the financial center of each country that issues a
component currency of the ECU) and (ii) a day on which banking institutions in
such financial center are carrying out transactions in such Specified Currency
and (c) with respect to LIBOR Notes (as defined below), also a London Banking
Day. "London Banking Day" means any day on which dealings on deposits in U.S.
dollars are transacted in the London interbank market. "Market Exchange Rate"
means the noon U.S. dollar buying rate in The City of New York for cable
transfers of the relevant currency as certified for customs purposes by the
Federal Reserve Bank of New York. If no Market Exchange Rate as of the second
Business Day preceding the applicable payment date is available, payments will
be made in the Specified Currency, unless such Specified Currency is
unavailable due to the imposition of exchange controls or to other circumstances
beyond the Corporation's control, in which case payment will be made in U.S.
dollars. All currency exchange costs will be borne by the Holders of such Notes
by deductions from such payments.
Unless otherwise indicated above, this Note may not be redeemed prior
to Maturity. If so indicated above, this Note may be redeemed, at the option of
the Corporation, on any date on or after the date set forth above, either in
whole or in part, at the option of the Corporation, at a redemption price equal
to the product of the principal amount of this Note to be redeemed multiplied by
the Redemption Percentage. The Redemption Percentage shall initially equal the
Initial Redemption Percentage specified above, 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 above, until the Redemption
Percentage is equal to 100%.
-16-
<PAGE>
If this Note is subject to redemption, notice of redemption shall be
mailed to the Registered Holders of the Notes designated for redemption at their
addresses as the same shall appear in the Security Register not less than 30 and
not more than 60 days prior to the date of redemption, subject to all conditions
and provisions of the Indenture. In the event of redemption of this Note in
part, a new Note for the amount of the unredeemed portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof.
Unless otherwise indicated above, this Note may not be redeemed prior
to maturity. If so indicated above, this Note may be payable prior to Maturity
at the option of the Holder on the Optional Repayment Dates shown above at the
Optional Repayment Prices shown above, together with accrued interest to the
date of repayment. In order for this Note to be repaid, the Trustee must
receive at least 30 but not more than 45 days prior to an Optional Repayment
Date (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 trust company in the United
States of America setting forth the name of the Holder of this Note, the
principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of this Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that this Note with
the form below entitled "Option to Elect Repayment" duly completed will be
received by the Trustee not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter. If the procedure described
in clause (ii) of the preceding sentence is followed, this Note with form duly
completed must be received by the Trustee by such fifth Business Day. Any
tender of this Note for repayment shall be irrevocable. The repayment option
may be exercised by the Holder of this Note for less than the entire principal
amount of the Note provided that the principal amount of this Note remaining
outstanding after repayment is an authorized denomination. Upon such partial
repayment, this Note shall be cancelled and a new Note or Notes for the
remaining principal amount hereof shall be issued in the name of the Holder of
this Note.
If an Event of Default with respect to Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment or supplementing thereof and the modification of the rights and
obligations of the Corporation and the rights of the Holders of the Securities
of each series to be affected under the Indenture at any time by the Corporation
and the Trustee with the
-17-
<PAGE>
consent of the Holders of not less than a majority in principal amount of the
Securities at the time outstanding of each series to be affected. The Indenture
also contains a provision permitting the Holders of not less than a majority in
aggregate principal amount of the Securities of any series at the time
outstanding, on behalf of the Holders of all Securities of such series, to waive
any past defaults under the Indenture with respect to such series of Securities
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.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Note of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the Notes of this series at the time outstanding
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in principal amount of the Notes of this
series at the time outstanding a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days, provided,
--------
however, that such limitations do not apply to a suit instituted by the Holder
- -------
hereof for the enforcement of payment of the principal of (and premium, if any)
or interest on this Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Corporation, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, places, and rate herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Corporation in any place where the principal of (and premium,
if any) and interest on this Note are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Corporation and
the Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series of
like tenor and of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. As provided
in the Indenture and subject
-18-
<PAGE>
to certain limitations therein set forth, this Note is exchangeable for the same
aggregate principal amount of Notes of like tenor and of authorized
denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple of $1,000
in excess thereof (or in the case of Securities denominated in a Specified
Currency, in such minimum denomination not less that the equivalent of $1,000 in
such Specified Currency on the basis of the Market Exchange Rate).
Prior to due presentation of this Note for registration of transfer,
the Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note is overdue and neither the Corporation,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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 officer of the Trustee or its duly authorized agent under the
Indenture.
IN WITNESS WHEREOF, PHH CORPORATION has caused this instrument to be
signed by its duly authorized officers, and has caused its corporate seal or a
facsimile thereof to be affixed hereto or imprinted hereon.
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the PHH CORPORATION
series designated herein issued
under the within-mentioned Indenture. By: ________________________
-19-
<PAGE>
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee Attest:
By:
--------------------------- By: ------------------------
Authorized Signatory Corporate Secretary
[SEAL]
-20-
<PAGE>
ASSIGNMENT FORM
---------------------------------
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 PHH CORPORATION and does hereby irrevocably constitute and
appoint
_______________________________________________________________________________
attorney to transfer the said Note on the books of the Corporation with full
power of substitution in the premises.
Dated:____________________ Your Signature: ________________________
________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the within instrument in every particular, without alteration or
enlargement or any change whatever.
-21-
<PAGE>
-----------------------------------------
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Corporation to repay $__________ principal amount of the within Note, pursuant
to its terms, on the "Optional Repayment Date" first occurring after the date of
receipt of the within Note as specified below, together with Interest thereon
accrued to the date of repayment, to the undersigned at
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Type Name and Address of the Undersigned)
and to issue to the Undersigned, pursuant to the terms of the Indenture, a new
Note or Notes representing the remaining principal amount of this Note, if any.
For the Option to Elect Repayment to be effective, this Note with the
Option to Elect Repayment duly completed must be received by the Corporation
within the relevant time period set forth above at the offices of the Trustee,
14 Wall Street, Eighth Floor, New York, New York 10005.
Dated: ____________________________________
Note: The signature to this Option
to Elect Repayment must correspond
with the name as written upon the
within Note in every particular
without alteration or enlargement or
any change whatsoever.
-22-
<PAGE>
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 Type Name and Address Including Zip Code of Assignee
of the within note and all rights hereunder, hereby irrevocably constituting and
appointing _______________________ attorney to transfer such Note on the books
of PHH Corporation with full power of substitution in the premises.
Dated:_________________________ _____________________________________
Signature
-------------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the within Note
in every particular without alteration
or enlargement or any change whatsoever.
-23-
<PAGE>
EXHIBIT 5
[LETTERHEAD OF PIPER & MARBURY APPEARS HERE]
October 24, 1995
PHH Corporation
11333 McCormick Road
Hunt Valley, Maryland 21031
Ladies and Gentlemen:
We have acted as counsel for PHH Corporation, a Maryland corporation (the
"Company"), in connection with the Company's Registration Statement on Form S-3
(the "Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and the Trust Indenture Act of
1939, as amended, with respect to the proposed offer and issuance by the Company
of up to $2,000,000,000 in principal amount of the Company's Debt Securities. In
this capacity, we have reviewed the charter and by-laws of the Company, the
Indenture dated as of March 1, 1993 (as modified by the Trust Indenture Act of
1939, as amended, including the Trust Indenture Reform Act of 1990)
(collectively, the "Indenture"), between the Company and The First National Bank
of Chicago, as Trustee, the proposed form of Distribution Agreement among the
Company and the several selling agents, the Registration Statement, the
corporate proceedings of the Company relating to the execution and delivery of
the Indenture and the proposed offer and issuance by the Company of the Debt
Securities, and such other materials as we have deemed necessary to the issuance
of this opinion.
We are of the opinion and advise you that:
1. The execution and delivery by the Company of the Indenture has been
duly authorized.
2. The issuance by the Company of the Debt Securities has been duly and
validly authorized and, upon their due execution, authentication and delivery in
accordance with the Indenture and upon payment therefor, the Debt Securities
will be legally issued and will constitute binding obligations of the Company
entitled to the benefits of the Indenture.
<PAGE>
PIPER & MARBURY
L.L.P.
PHH Corporation
October 24, 1995
Page 2
We hereby consent to the filing of this opinion as an exhibit to the above-
mentioned Registration Statement and to the reference made to us in the
Registration Statement and the related Prospectus.
Very truly yours,
/s/ Piper & Marbury L.L.P.
PIPER & MARBURY L.L.P.
<PAGE>
EXHIBIT 12
PHH CORPORATION AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(dollars in thousands)
<TABLE>
<CAPTION>
Three Year Ended April 30
Months Ended --------------------------------------------------------
July 31, 1995 1995 1994 1993 1992 1991
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes $ 31,663 $ 121,318 $ 109,796 $ 94,238 $ 83,117 $ 77,759
Add:
Interest expense 60,631 194,196 162,108 193,935 237,058 302,853
Interest portion of rentals* 1,956 8,065 9,088 8,456 8,665 7,796
------- -------- -------- -------- -------- --------
Earnings available for fixed charges $ 94,250 $ 323,579 $ 280,992 $ 296,629 $ 328,840 $ 388,408
======= ======== ======== ======== ======== ========
Fixed charges:
Interest expense $ 60,631 $ 194,196 $ 162,108 $ 193,935 $ 237,058 $ 302,853
Interest portion of rentals* 1,956 8,065 9,088 8,456 8,665 7,796
------- -------- -------- -------- -------- --------
$ 62,587 $ 202,261 $ 171,196 $ 202,391 $ 245,723 $ 310,649
======= ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 1.51 1.60 1.64 1.47 1.34 1.25
======= ======== ======== ======== ======== ========
</TABLE>
*Amounts reflect a one-third portion of rentals, the portion deemed
representative of the interest factor.
Note: The interest included in fixed charges consists of the amounts
identified as interest expense in the Consolidated Statements of Income,
the substantial portion of which represents interest on debt incurred to
finance leasing activities and mortgage banking activities, as well as
the interest costs associated with home relocation services which are
ordinarily recovered through direct billings to clients and are included
with "Costs, including interest, of carrying and reselling homes" in the
Consolidated Financial Statements.
<PAGE>
Exhibit 23
Consent of Independent Certified Public Accountants
The Board of Directors
PHH Corporation
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated May 22, 1995, with respect to the consolidated
financial statements and the related financial statement schedule included in
the Annual Report on Form 10-K of PHH Corporation for the year ended April 30,
1995 and to the reference to our firm under the heading "Experts" in the
Registration Statement.
/s/ KPMG PEAT MARWICK LLP
Baltimore, Maryland
October 24, 1995
<PAGE>
Exhibit 24
PHH CORPORATION
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, as of this 16th day of October, 1995, that
the undersigned directors and officers of PHH Corporation, a Maryland
corporation with offices at 11333 McCormick Road, Hunt Valley, Maryland 21031
(the "Corporation"), hereby constitute and appoint Robert D. Kunisch, Eugene A.
Arbaugh, Samuel H. Wright and Gordon W. Priest, Jr., and each of them, the true
and lawful agents and attorneys-in-fact of the undersigned, with full power of
substitution and with full power and authority in said agents and attorneys-in-
fact, and in any one or more of them, to sign for the undersigned as director
and/or officer of the Corporation and file with the Securities and Exchange
Commission ("SEC"), Washington D.C., or any other federal agency, registration
statements of the Corporation under the Securities Act of 1933 on Forms S-3 and
S-8, respectively, relating to (i) $2 billion of the Corporation's debt
securities to be issued in one or more series from time to time and (ii) up to
450,000 shares of the Corporation's common stock to be issued under the
Corporation's Amended and Restated Employee Investment Plan, or any registraion
or filing with any state or local jurisdiction within the United States or any
foreign jurisdiction, and any exhibits or amendments to any such SEC or federal
registration statement, report or filing, or state, local, or foreign
registration or filing (including post-effective amendments), hereby ratifying
and confirming all acts taken by such agents and attorneys-in-fact, or any one
or more of them, as herein authorized.
/s/ James S. Beard Director
------------------------------
James S. Beard
/s/ Andrew F. Brimmer Director
------------------------------
Andrew F. Brimmer
/s/ George L. Bunting, Jr. Director
------------------------------
George L. Bunting, Jr.
/s/ Alan P. Hoblitzell, Jr. Director
------------------------------
Alan P. Hoblitzell, Jr.
/s/ Paul X. Kelley Director
------------------------------
Paul X. Kelly
Director
------------------------------
L. Patton Kline
-1-
<PAGE>
/s/ Francis P. Lucier Director
------------------------------
Francis P. Lucier
/s/ Kent C. Nelson Director
------------------------------
Kent C. Nelson
/s/ Donald J. Shepard Director
------------------------------
Donald J. Shepard
/s/ Anne M. Tatlock Director
------------------------------
Anne M. Tatlock
/s/ Alexander B. Trowbridge Director
------------------------------
Alexander B. Trowbridge
/s/ Robert D. Kunisch Director,
------------------------------ Chairman of the Board,
Robert D. Kunisch President and
Chief Executive Officer
/s/ Nan A. Grant Controller
------------------------------
Nan A. Grant
-2-
<PAGE>
PHH CORPORATION
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, as of this 16th day of October,
1995, that the undersigned officer of PHH Corporation, a Maryland corporation
with offices at 11333 McCormick Road, Hunt Valley, Maryland 21031 (the
"Corporation"), hereby constitutes and appoints Robert D. Kunisch, Eugene A.
Arbaugh, Samuel H. Wright and Gordon W. Priest, Jr., and each of them, the true
and lawful agents and attorneys-in-fact of the undersigned, with full power of
substitution and with full power and authority in said agents and attorneys-in-
fact, and in any one or more of them, to sign for the undersigned as officer of
the Corporation and file with the Securities and Exchange Commission ("SEC"),
Washington, D.C., or any other federal, agency, registration statements of the
Corporation under the Securities Act of 1933 on Forms S-3 and S-8, respectively,
relating to (i) $2 billion of the Corporation's debt securities to be issued in
one or more series from time to time and (ii) up to 450,000 shares of the
Corporation's common stock to be issued under the Corporation's Amended and
Restated Employee Investment Plan, or any registration or filing with any state
or local jurisdiction within the United States or any foreign jurisdiction, and
any exhibits or amendments to any such SEC or federal registration statement,
report or filing, or state, local, or foreign registration or filing (including
post-effective amendments), hereby ratifying and confirming all acts taken by
such agents and attorneys-in-fact, or any one or more of them, as herein
authorized.
/s/ Roy A. Meierhenry Senior Vice President and
------------------------------ Chief Financial Officer
Roy A. Meierhenry
-3-
<PAGE>
Exhibit 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
PHH CORPORATION
(Exact name of obligor as specified in its charter)
Maryland 52-0551284
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
11333 McCormick Roak
Hunt Valley, Maryland 21031
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
--------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
------------------------------
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
-----------------
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 10th day of October,
1995.
The First National Bank of Chicago,
Trustee,
By /s/ R. D. Manella
R. D. Manella
Vice President
* Exhibit 1,2,3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of The
CIT Group Holdings, Inc., filed with the Securities and Exchange Commission on
February 16, 1993 (Registration No. 33-58418).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 10, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between PHH Corporation and
The First National Bank of Chicago, the undersigned, in accordance with Section
321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the
reports of examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R.D. Manella
R. D. Manella
Vice President
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
C400 (LESS THAN)
Dollar Amounts in ------------ -----------
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)............. 0081 3,184,875 1.a.
b. Interest-bearing balances(2)...................................... 0071 8,932,069 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)......... 1754 249,502 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)...... 1773 536,856 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold................................................ 0276 2,897,736 3.a.
b. Securities purchased under agreements to resell................... 0277 1,417,129 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)................................................................ RCFD 2122 16,567,408 4.a.
b. LESS: Allowance for loan and lease losses......................... RCFD 3123 358,877 4.b.
c. LESS: Allocated transfer risk reserve............................. RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).............................. 2125 16,208,531 4.d.
5. Assets held in trading accounts...................................... 3545 13,486,931 5.
6. Premises and fixed assets (including capitalized leases)............. 2145 516,279 6.
7. Other real estate owned (from Schedule RC-M)......................... 2150 11,216 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)....................................... 2130 12,946 8.
9. Customers' liability to this bank on acceptances outstanding......... 2155 501,943 9.
10. Intangible assets (from Schedule RC-M)............................... 2143 111,683 10.
11. Other assets (from Schedule RC-F).................................... 2160 1,258,270 11.
12. Total assets (sum of items 1 through 11)............................. 2170 49,325,966 12.
- ------------------
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
5
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)........................... RCON 2200 14,889,235 13.a.
(1) Noninterest-bearing(1)............................ RCON 6631 5,895,584 13.a.(1)
(2) Interest-bearing.................................. RCON 6636 8,993,651 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).................... RCFN 2200 13,289,760 13.b.
(1) Noninterest bearing............................... RCFN 6631 315,549 13.b.(1)
(2) Interest-bearing.................................. RCFN 6636 12,974,211 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased............................... RCFD 0278 2,942,186 14.a.
b. Securities sold under agreements to repurchase........ RCFD 0279 1,160,512 14.b.
15. a. Demand notes issued to the U.S. Treasury.............. RCON 2840 112,768 15.a.
b. Trading Liabilities................................... RCFD 3548 7.872,221 15.b.
16. Other borrowed money:
a. With original maturity of one year or less............ RCFD 2332 2,402,829 16.a.
b. With original maturity of more than one year.......... RCFD 2333 643,987 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases................................................... RCFD 2910 278,108 17.
18. Bank's liability on acceptance executed and outstanding.. RCFD 2920 501,943 18.
19. Subordinated notes and debentures........................ RCFD 3200 1,225,000 19.
20. Other liabilities (from Schedule RC-G)................... RCFD 2930 981,938 20.
21. Total liabilities (sum of items 13 through 20)........... RCFD 2948 46,300,487 21.
22. Limited-Life preferred stock and related surplus......... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............ RCFD 3838 0 23.
24. Common stock............................................. RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock). RCFD 3839 2,314,642 25.
26. a. Undivided profits and capital reserves................ RCFD 3632 510,093 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities............................................ RCFD 8434 (880) 26.b.
27. Cumulative foreign currency translation adjustments...... RCFD 3284 766 27.
28. Total equity capital (sum of items 23 through 27)........ RCFD 3210 3,025,479 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28).................... RCFD 3300 49,325,966 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the
bank by independent external Number
----------------
auditors as of any date during 1993 ................. RCFD 6724 N/A M.1.
----------------
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
<PAGE>
Exhibit 25(b)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
PHH CORPORATION
(Exact name of obligor as specified in its charter)
Maryland 52-0551284
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
11333 McCormick Road
Hunt Valley, Maryland 21031
(Address of principal executive offices) (Zip code)
----------------------
Debt Securities
(Title of the indenture securities)
===============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such affilia-
tion.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 13th day of October, 1995.
THE BANK OF NEW YORK
By:/s/ WALTER N. GITLIN
----------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June
30, 1995, published in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 3,025,419
Interest-bearing balances .......... 881,413
Securities:
Held-to-maturity securities ........ 1,242,368
Available-for-sale securities ...... 1,774,079
Federal funds sold in domestic
offices of the bank ................ 5,503,445
Securities purchased under agree-
ments to resell .................... 200,634
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................26,599,533
LESS: Allowance for loan and
lease losses ..............516,283
Loans and leases, net of unearned
income and allowance 26,083,250
Assets held in trading accounts ...... 1,455,639
Premises and fixed assets (including
capitalized leases) ................ 612,547
Other real estate owned .............. 79,667
Investments in unconsolidated
subsidiaries and associated
companies .......................... 198,737
Customers' liability to this bank on
acceptances outstanding ............ 1,111,464
Intangible assets .................... 105,263
Other assets ......................... 1,237,264
-----------
Total assets ......................... $43,511,189
===========
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices ................ $19,233,885
Noninterest-bearing .......7,677,954
Interest-bearing .........11,555,931
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 12,641,676
Noninterest-bearing ..........72,479
Interest-bearing .........12,569,197
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,747,659
Securities sold under agreements
to repurchase .................... 73,553
Demand notes issued to the U.S.
Treasury ........................... 300,000
Trading liabilities .................. 738,317
Other borrowed money:
With original maturity of one year
or less .......................... 1,586,443
With original maturity of more than
one year ......................... 220,877
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,113,102
Subordinated notes and debentures .... 1,053,860
Other liabilities .................... 1,489,252
----------
Total liabilities .................... 40,198,624
==========
<CAPTION>
EQUITY CAPITAL
<S> <C>
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,849,221
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 662)
Cumulative foreign currency transla-
tion adjustments .................. ( 3,944)
-----------
Total equity capital ................ 3,312,565
-----------
Total liabilities and equity
capital ........................... $43,511,189
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued by the Board
of Governors of the Federal Reserve System and is true to the best of
my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and to
the best of our knowledge and belief has been prepared in conformance
with the instructions issued by the Board of Governors of the Federal
Reserve System and is true and correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Samuel F. Chevalier )
<PAGE>
Exhibit 25(c)
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
PHH CORPORATION
(Exact name of obligor as specified in its charter)
Maryland 52-0551284
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.
11333 McCormick Road
Hunt Valley, Maryland 21031
(Address of principal executive offices) (Zip Code)
___________________________________________
Debt Securities
(Title of the indenture securities)
_____________________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 19th day of October, 1995.
CHEMICAL BANK
By /s/ Thomas J. Foley
---------------------------------------
Thomas J. Foley
Vice President
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<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................ $ 5,573
Interest-bearing balances ........................ 2,681
Securities:
Held to maturity securities......................... 6,027
Available for sale securities....................... 18,304
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold................................ 1,516
Securities purchased under agreements to resell... 287
Loans and lease financing receivables:
Loans and leases, net of unearned income $ 73,829
Less: Allowance for loan and lease losses 1,885
Less: Allocated transfer risk reserve.... 104
--------
Loans and leases, net of unearned income,
allowance, and reserve............................ 71,840
Trading Assets...................................... 25,315
Premises and fixed assets (including capitalized
leases)........................................... 1,395
Other real estate owned............................. 69
Investments in unconsolidated subsidiaries and
associated companies.............................. 158
Customer's liability to this bank on acceptances
outstanding....................................... 1,120
Intangible assets................................... 484
Other assets........................................ 7,254
--------
TOTAL ASSETS........................................ $142,023
========
</TABLE>
- 4 -
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
Deposits
<S> <C>
In domestic offices................................... $ 46,128
Noninterest-bearing ...........................$16,282
Interest-bearing .............................. 29,846
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's............................................. 30,833
Noninterest-bearing ...........................$ 199
Interest-bearing .............................. 30,634
-------
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased............................... 16,779
Securities sold under agreements to repurchase........ 810
Demand notes issued to the U.S. Treasury................ 1,001
Trading liabilities..................................... 20,888
Other Borrowed money:
With original maturity of one year or less............ 6,505
With original maturity of more than one year.......... 602
Mortgage indebtedness and obligations under capitalized
leases................................................ 18
Bank's liability on acceptances executed and outstanding 1,126
Subordinated notes and debentures....................... 3,411
Other liabilities....................................... 6,287
TOTAL LIABILITIES....................................... 134,388
<CAPTION>
EQUITY CAPITAL
<S> <C>
Common stock............................................ 620
Surplus................................................. 4,524
Undivided profits and capital reserves.................. 2,724
Net unrealized holding gains (Losses)
on available-for-sale securities........................ (241)
Cumulative foreign currency translation adjustments..... 8
TOTAL EQUITY CAPITAL.................................... 7,635
--------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL............................... $142,023
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
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