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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 29, 1998
ASSOCIATES CORPORATION OF NORTH AMERICA
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-6154
Commission File Number)
74-1494554
(I.R.S. Employer Identification Number)
250 E. Carpenter Freeway, Irving, Texas 75062-2729
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 972-652-4000
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibits relate to the Registrant's Registration
No.333-39273 on Form S-3 with respect to which the Registrant commenced an
offering on April 29, 1998 of $1,000,000,000 principal amount of Medium Term
Senior Notes, Series J and Medium Term Subordinated Notes, Series A due
9 months or more from Date of Issue.
1 - Form of Agency Agreement
4.1 - Definitive Form of Senior Note, Series J
4.2 - Definitive Form of Subordinated Note, Series A
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASSOCIATES CORPORATION OF
NORTH AMERICA
By: /S/ Dianne Douglas
-------------------------
Dianne Douglas
Senior Vice President
Date: May 4, 1998
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INDEX TO EXHIBITS
Exhibit
Number
1 - Form of Agency Agreement
4.1 - Definitive Form of Senior Note
4.2 - Definitive Form of Subordinated Note
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Associates Corporation of North America
Medium Term Notes
BASIC PROVISIONS
For Agency And Terms Agreements
Dated: April 29, 1998
To the Agent or Dealer named in the Agency or Terms Agreement to which these
Basic Provisions relate
Gentlemen:
Associates Corporation of North America, a Delaware corporation (the
"Company"), proposes to issue and sell from time to time its Medium Term
Senior Notes (the "Senior Notes") and its Medium Term Subordinated Notes (the
"Subordinated Notes") of the respective series identified in an executed
Agency or Terms Agreement (the Senior Notes and the Subordinated Notes being
collectively called the "Notes"), each of the Senior Notes and the
Subordinated Notes to be issued pursuant to respective indentures identified
in an executed Agency or Terms Agreement (the "Indentures") between the
Company and the Trustees named therein (the "Trustee"). The Notes are or will
be more particularly described in the Registration Statement and the
Prospectus identified in an executed Agency or Terms Agreement. The Notes will
have such maturities and will bear such rate or rates of interest, or rates of
interest calculated in such a manner, as may be determined from time to time
by the Company and set forth in the Prospectus. The basic provisions set forth
herein, including the exhibits hereto, together with an Agency Agreement or a
Terms Agreement as hereafter defined are intended to constitute the entire
agreement (the "Agreement") of the parties thereto with respect to the offer
and sale of the Notes.
1. Position of Agents. If you have executed an agency agreement in
substantially the form of Schedule A hereto to which a copy of these Basic
Provisions is attached ("Agency Agreement"), you may from time to
time be authorized orally or in writing by the Company to act as the Company's
agent in connection with the sale of specified amounts of Notes. Unless you
promptly reject such authorization, you will act under such authorization in
connection with the sale of such specified Notes, subject to the terms of such
Agency Agreement. If so specified in such Agency Agreement, the term of your
appointment as agent thereunder may be limited to a specified period of time
or a specified principal amount of Notes. The Company may also determine to
sell Notes directly to you as a dealer for resale to others, and, if you so
agree to purchase Notes at such time, you and the Company shall enter into a
terms agreement either in substantially the form of Schedule B hereto to which
a copy of the Basic Provisions is attached or in any form of written
telecommunications (executed by both parties) between you and the Company
("Terms Agreement") relating to such sale in accordance with the provisions of
Section 3(b) hereof. The Company may appoint additional parties for the
purpose of soliciting offers to purchase Notes; provided, however, such
additional parties shall enter into an agreement substantially similar hereto.
You and any such other parties shall not constitute a joint venture, or
underwriting syndicate or group, and you shall not be liable to the Company as
a result of the actions of any such other party.
2. Representations by the Company. The Company represents, warrants and
agrees as follows:
(a) A registration statement on Form S-3 (with the file number set forth
in the Agency or Terms Agreement, as the case may be) with respect to the
Notes and other debt securities of the Company, including a
form of basic prospectus (the "Basic Prospectus"), has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), where applicable, the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, has been filed with the Commission under the Act and has become
effective. A prospectus supplement relating to the Notes has been prepared and
has been filed pursuant to Rule 424(b) under the Act, and further supplements
(such prospectus supplement, as further supplemented or amended, being
hereinafter referred to as the "Prospectus Supplement" or "Pricing Sticker")
will be from time to time filed pursuant to Rule 424(b) under the Act,
reflecting, among other things, the current rates, maturities
and other relevant terms (including, without limitation, whether Senior Notes
or Subordinated Notes are being offered and sold) with respect to the offer
and sale of Notes by you and the Company. The registration statement
(including any documents incorporated by reference therein) as it became
effective and as it may from time to time be further supplemented and amended
is hereinafter referred to as the "Registration Statement" and the most recent
prospectus (including any documents incorporated by reference therein)
included in the Registration Statement, together with the Prospectus
Supplement, as they may from time to time be supplemented or amended, is
hereafter referred to as the "Prospectus". The terms "supplement", "amend",
"supplement" and "amendment", and similar terms, shall be deemed to include
the filing of any document or report incorporated by reference in the
Registration Statement or Prospectus. References herein to the
Prospectus at any time in use refer to the most recent Prospectus furnished by
the Company to you for use in soliciting, whether as agent or as dealer,
purchases of the Notes and for delivery upon any purchase of the
Notes through or from you. Copies of the Registration Statement and
Prospectus, any such amendment or supplement (including Pricing Stickers other
than those relating solely to the distribution of any Notes for which
you are not serving as either agent or dealer), and all documents incorporated
by reference therein, which were or hereafter may be filed with the Commission
prior to the date hereof or during the term of the Agreement will
be delivered to you. During the specified period of time you are authorized by
the Company to actively solicit prospective purchasers for specified principal
amounts of Notes or own Notes which you have purchased as a
dealer pursuant to a Terms Agreement, the Company will not file any amendment
or supplement (other than Pricing Stickers relating to the distribution of any
Notes for which you are not serving as either agent or dealer)to the
Registration Statement or the Prospectus without first having furnished you
with a copy of the proposed form thereof and having given you a reasonable
opportunity to review the same.
(b) The Registration Statement and the Basic Prospectus, at the time the
Registration Statement first became effective, and the prospectus supplement
relating to the Notes, at the time it was filed, contained, and
hereafter at all times that Notes are offered and sold by you as agent or
dealer, including any period of time during which there is an obligation under
the Act to deliver a Prospectus with respect to Notes sold by you as
dealer, the Registration Statement and the Prospectus will contain, all
statements and information which are required to be stated therein by the Act,
the Trust Indenture Act, and the Rules and Regulations and conformed,
and will in all respects conform, to the requirements thereof; neither the
Registration Statement nor the Prospectus will at any such time fail to
include information reflecting any facts or events which, individually or
in the aggregate, represent a fundamental change in the information contained
in the Registration Statement or Prospectus; none of the Registration
Statement, the Basic Prospectus or the prospectus supplement relating to
the Notes included, nor will either of the Registration Statement or the
Prospectus at any such time include, any untrue statement of a material fact,
and none of the Registration Statement, the Basic Prospectus or the
Prospectus Supplement relating to the Notes omitted, nor will either of the
Registration Statement or the Prospectus at any such time omit, to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the Company
makes no representations or warranties as to that part of the Registration
Statement which consists of the Statement of Eligibility and
Qualification under the Trust Indenture Act (Form T-1) of the Trustee under
the respective Indentures or as to information contained in or omitted from
the Registration Statement or the Prospectus in reliance upon written
information furnished to the Company by you specifically for inclusion
therein. All periodic reports filed by the Company pursuant to the Exchange
Act which are or will be incorporated by reference in the Registration
Statement or Prospectus conform or will conform, respectively, to the
requirements of the Exchange Act and the Rules and Regulations. Wherever in
this Agreement the Registration Statement or the Prospectus is said to
"contain", "include" or "omit" information, said terms shall be deemed also to
refer to information incorporated by reference therein.
(c) The financial statements of the Company and its subsidiaries included
in the Registration Statement and Prospectus fairly present the financial
condition of the Company and its subsidiaries as of the dates
indicated and the results of operations and changes in financial position for
the periods therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved
(except as otherwise stated therein). Coopers & Lybrand L.L.P., which has
examined certain of such financial statements, as set forth in their report
included in the Registration Statement and Prospectus, are independent
public accountants with respect to the Company and its subsidiaries as
required by the Act and the Rules and Regulations.
(d) Unless you shall have been otherwise promptly notified by the Company
in writing, except as contemplated in the Prospectus then in use, subsequent
to the respective dates as of which information is given in the Registration
Statement and the Prospectus then in use, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary
course of business, which are material to the Company and its subsidiaries,
taken as a whole, and there has not been any material adverse change, on a
consolidated basis, in the capital stock, short-term debt or long-term
debt of the Company and its subsidiaries, or any material adverse change, or
any development involving a prospective material adverse change, in the
condition (financial or other), business, prospects, net worth or
results of operations of the Company and its subsidiaries considered as a
whole.
(e) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware; the Company's
subsidiaries have been duly incorporated and are existing corporations in good
standing under the laws of their respective jurisdictions of incorporation;
each of the Company and its subsidiaries holds all material licenses,
certificates and permits from governmental authorities necessary for the
conduct of its business as described in the Registration Statement and has
full power and authority (corporate and other) to conduct its business as
described in the Registration Statement; each of the Company and its
subsidiaries is duly qualified to do business and is in good standing in each
jurisdiction in which it owns or leases substantial properties, or in which
the conduct of its business requires such qualification, except to the extent
that the failure to be so qualified would not have a material adverse effect
on the financial condition or results of operations of the Company and its
subsidiaries taken as a whole; and all of the outstanding shares of capital
stock of each such subsidiary have been duly authorized and validly issued,
are fully paid and non-assessable and the Company owns all outstanding shares
of capital stock of each significant subsidiary (as defined in Rule 405 under
the Act) (except as otherwise stated in the Prospectus then in use), in
each such case subject to no mortgage, pledge, lien, encumbrance, charge or
adverse claim.
(f) Each of the Indentures has been duly authorized, executed, delivered
and qualified under the Trust Indenture Act, and constitutes a valid and
legally binding instrument in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; the Notes have been duly authorized and, when duly
executed, authenticated, issued and delivered as contemplated hereby and by
the respective Indentures, will constitute valid and legally binding
obligations of the Company in accordance with their terms and the terms of
the respective Indentures subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles, will be
entitled to the benefits provided by the respective Indentures and will
conform to the description thereof in the Prospectus.
(g) Except as set forth in the Prospectus, there is not pending or, to
the knowledge of the Company, threatened, any action, suit or proceeding, to
which the Company or any of its subsidiaries is a party before or
by any court or governmental agency or body in which there is a reasonable
possibility of an adverse decision which could result in any material adverse
change in the condition (financial or other), business, prospects, net
worth or results of operations of the Company and its subsidiaries, taken as a
whole, or might materially and adversely affect the properties or assets
thereof; and there are no contracts or documents of the Company or any
of its subsidiaries which would be required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have
not been so filed or which will not have been filed prior to the date of the
Pricing Sticker next utilized after the date such filing shall have become
necessary under the Act or the Rules and Regulations.
(h) This Agreement has been duly authorized, executed and delivered; the
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any
statute, any indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which any of them is bound or to which any of the property
of the Company or any of its subsidiaries is subject, the Company's charter or
by-laws, or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its properties; no
consent, approval, authorization or order of any court or governmental agency
or body is required for the consummation of the transactions contemplated by
this Agreement in connection with the issuance or sale of the Notes by the
Company hereunder, except such as may be required under the Act, the
Trust Indenture Act or state securities laws; and the Company has full power
and authority to authorize, issue and sell the Notes as contemplated by this
Agreement.
3. Solicitation of Offers to Purchase. (a) If pursuant to Section 1 you
have been authorized to act as an agent of the Company under an Agency
Agreement and have not promptly rejected such authorization, you
propose, on the basis of the representations and warranties contained in such
Agency Agreement, and subject to the terms and conditions set forth therein,
to use your best efforts to solicit offers to purchase the Notes upon
the terms and conditions set forth therein, and in connection therewith will
use the Prospectus which has been most recently furnished to you by the
Company, only as permitted or contemplated hereby, and will solicit
purchases of the Notes only as permitted by the Act, the Rules and Regulations
and the applicable securities laws or regulations of any jurisdiction.
You shall not be under any obligation to purchase any of the Notes unless
you otherwise agree as set forth below, but you may, pursuant to any
authorization referred to in Section 1 hereof and subject to any
further directions you may receive from the Company, solicit prospective
purchasers of Notes covered by such authorization and transmit to the Company
proposals of such prospective purchasers to purchase stated amounts
of such Notes at specified rates and maturities. You shall communicate to the
Company, orally or in writing, each offer to purchase Notes, and the Company
shall have the sole right to accept offers to purchase Notes and
may reject any proposed purchase of Notes as a whole or in part. You shall
have the right, in your discretion reasonably exercised, to reject any
proposed purchase of Notes, as a whole or in part, and any such rejection
shall not be deemed a breach of your agreements contained herein. Procedural
details relating to the issue and delivery of, and the solicitation of
purchases and payment for, the Notes are set forth in the Medium Term Note
Administrative Procedures for Agency Sales attached as Exhibit 1 (the
"Procedures"). You and the Company each agree to perform the respective duties
and obligations specifically provided to be performed by it in the
Procedures as amended from time to time. You will make reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes has been accepted by the Company, but you shall
not have any liability to the Company in the event such purchase is not
consummated for any reason whatsoever. This Agreement, including the
Procedures as they relate to the Company and you, may only be
amended by written agreement between the Company and you. The Company agrees
to pay you as compensation the commissions set forth in the Agency Agreement
for Notes purchased through you.
(b) Each sale of Notes to you as dealer shall be made in accordance with
the terms of a Terms Agreement. Your commitment as dealer to purchase Notes
pursuant to any Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties of the Company contained herein and
shall be subject to the terms and conditions set forth herein and in the Terms
Agreement. Each Terms Agreement shall specify whether Senior Notes or
Subordinated Notes are being sold, the principal amount of Notes to be
purchased by you as dealer pursuant thereto, the price to be paid to the
Company for such Notes, the initial public offering price, if any, at which
the Notes are proposed to be reoffered, the form in which the Notes are
to be issued (whether in the form of a global security in the name of a
depositary or its nominee or as certificated securities in the name of each
purchaser or its nominee) and the time and place of delivery of and
payment (which shall be in immediately available funds) for such Notes. Each
Terms Agreement should also specify any requirements for delivery of the
officers' certificate referred to in Section 7(b) hereof, the opinions
referred to in Section 7(c) hereof and the accountants' letter referred to in
Section 7(d) hereof.
(c) The documents required to be delivered by Section 6 hereof shall be
delivered at the office of LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West
55th Street, New York, New York 10019-5389 at 10:00 o'clock A.M., New York
City time, on the date specified in the Agency Agreement or the Terms
Agreement, as the case may be, or at such other time and date as you and the
Company may agree upon in writing, the time and date of such delivery being
herein called the "Closing Date."
4. Covenants. The Company hereby further agrees that:
(a) The Company will advise you promptly (i) when any post-effective
amendment has become effective or any supplement to or amendment of the
Prospectus has been filed which relates to or affects the
offer of the specific Notes as to which you are acting as agent or are
purchasing or have purchased as dealer during any period of time in which you
have been authorized to solicit purchases of the Notes or in which you
own Notes which you purchased as dealer, (ii) of the issuance of any stop
order by the Commission or the suspension of the qualification of Notes for
offering or sale in any jurisdiction or the initiation or threatening of
any proceeding for any such purpose, and (iii) of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information. The Company will
use its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) With respect to Notes you own which you purchased as dealer, the
Company will furnish such information, execute such instruments and take such
action as may reasonably be required to qualify the Notes
for sale under the securities laws of such jurisdictions as you reasonably
request and to continue such qualifications in effect so long as required for
the distribution of the Notes, except that the Company shall not
be required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any state.
(c) With respect to Notes as to which you are then authorized to solicit
purchasers or have purchased as dealer, the Company will furnish you with
copies of each post-effective amendment and each supplement to or
amendment of the Registration Statement or Prospectus and copies of the
Prospectus then in use in such quantities as you may from time to time
reasonably request. If at any time when the delivery of a prospectus
shall be required by law in connection with sales of any of the Notes, either
(i) any event shall have occurred as a result of which the Registration
Statement or the Prospectus then in use would not include information
reflecting any facts or events which, individually or in the aggregate,
represent a fundamental change in the information contained in the
Registration Statement or the Prospectus then in use or would include any
untrue statement of a material fact, or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) for any other
reason it shall be necessary to amend or supplement the Prospectus then in use
in order to comply with the Act, the Company will notify you promptly to
suspend solicitation of purchases of the Notes in your capacity as agent, if
at such time you are so engaged, and to cease sales of any Notes you may then
own as dealer; and forthwith upon receipt of such notice, you shall suspend
your solicitation of purchases of the Notes or cease sales of any Notes
you may then own as dealer, as the case may be, and shall cease using the
Prospectus which has been most recently furnished to you by the Company; if
you advise the Company that you own Notes as dealer, the Company will as
promptly as practicable prepare and file with the Commission an amendment or
supplement to the Registration Statement or the Prospectus which will correct
such statement or omission or effect such compliance; otherwise, the Company
will promptly advise you by telephone (with confirmation in writing) in
the event that it shall decide to amend or supplement the Registration
Statement or the Prospectus and will then promptly prepare and file with the
Commission an amendment or supplement to the Registration Statement or
the Prospectus which will correct such statement or omission or effect such
compliance; and if any such amendment or supplement, and any documents,
certificates and opinions furnished to you pursuant to Section 7
below in connection with the preparation or filing of any such amendment or
supplement, are satisfactory in all respects to you, upon the filing of such
amendment or supplement with the Commission or the effectiveness of a
post-effective amendment to the Registration Statement, as the case may be,
you will resume your respective obligations to solicit orders to purchase
Notes hereunder and may resume sales of any Notes you may then own
as dealer.
(d) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than 15 months after the end
of the fiscal quarter in which any Notes are sold through you as agent or
purchased by you as dealer, an earnings statement (which need not be audited)
complying with Section 11(a) of the Act and covering a twelve-month period
beginning after the date of the Agency Agreement or Terms Agreement, as the
case may be, pursuant to which such Notes were sold or purchased,
respectively.
(e) So long as any of the Notes are outstanding, the Company will furnish
or cause to be furnished to you copies of (i) all financial reports to the
Company's security holders generally (other than Associates First
Capital Corporation or any other affiliated corporation), and (ii) all reports
and financial statements filed by or on behalf of the Company with the
Commission and the New York Stock Exchange.
(f) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay all costs
and expenses incident to the performance of its obligations under this
Agreement, including all expenses incident to the authorization of the Notes
and their issue and delivery, the fees and expenses of the Company's counsel
and accountants, the reasonable fees and expenses of your counsel, the costs
and expenses incident to the preparing, printing and filing under the Act of
the Registration Statement and each post-effective amendment (including all
exhibits thereto), any preliminary prospectus, the Prospectus Supplement and
each Prospectus, including all supplements and amendments thereto,
the cost of printing this Agreement, the cost of distributing each Prospectus
used by the Company and of furnishing to you copies of the Registration
Statement and each Prospectus used by the Company, the cost of
any filings with the National Association of Securities Dealers, Inc., any
fees required to be paid to any rating agencies, any advertising expenses
approved by the Company, and the cost of qualifying the Notes purchased or
held by you as dealer under state securities or "blue sky" laws as provided in
Section 4(b) hereof. If any sale of the Notes by the Company provided for in
any Terms Agreement is not consummated by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on
its part to be performed, or because any other condition of any dealer's or
dealers' obligations thereunder required to be fulfilled by the
Company is not fulfilled, the Company will reimburse such dealer or dealers
for all reasonable out-of-pocket disbursements (including fees and
disbursements of counsel) incurred by such dealer or dealers in connection
with their preparing to market and marketing the Notes or in contemplation of
performing their obligations thereunder. The Company shall not in any event be
liable to any dealer for loss of anticipated profits from the
transactions covered by such Terms Agreement. Except as provided in this
Section 4(f), you will pay all your own costs and expenses.
5. Indemnification. (a) The Company will indemnify and hold you harmless
from and against any losses, claims, damages or liabilities, joint or several,
to which you may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of, or are based upon, any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus or in the Registration
Statement as it from time to time may be supplemented or amended or in any
Prospectus from time to time in use, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse you, as incurred, for any legal or other
expenses reasonably incurred by you in investigating, defending or preparing
to defend any such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus or in the Registration Statement
as it from time to time may be supplemented or amended or in any Prospectus
from time to time in use in reliance upon and in conformity with
written information furnished to the Company by or on behalf of you for
inclusion therein; and provided further, that the Company shall not be liable
to you or any person controlling you under the indemnity
agreement in this subparagraph (a) with respect to any prospectus relating to
the Notes to the extent that any such loss, claim, damage or liability imposed
on or suffered by you or such controlling person results from the
fact that you sold Notes to a person to whom it is established that there was
not sent or given, at or prior to the earlier of either the mailing or
delivery of the written confirmation of such sale or the delivery of such
Notes to such person, a copy of the Prospectus then in use (excluding
documents incorporated by reference) if the Company notified you in writing in
accordance with Section 4(c) hereof and has, at a reasonable time prior to
the earlier of the mailing or delivery of such written confirmation or the
delivery of such Notes to such person, furnished copies of the Prospectus
(excluding documents incorporated by reference) then in use to you pursuant to
the terms of this Agreement, and such loss,claim, damage or liability results
from an untrue statement or omission of a material fact contained in the
Prospectus and corrected in a subsequent Prospectus as then amended or
supplemented.
(b) You will indemnify and hold harmless the Company from and against any
losses, claims, damages or liabilities, joint or several, to which the Company
may become subject, under the Act 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 or in the Registration Statement as it from time to
time may be supplemented or amended or in any Prospectus from time to time in
use, or arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, to the extent such statement or
omission was made in reliance upon information furnished in writing to the
Company by or on behalf of you expressly for inclusion therein; and you will
reimburse the Company for any legal or other expenses reasonably incurred by
the Company in investigating, defending or preparing to defend any such loss,
claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subparagraph (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subparagraph, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may
have to any indemnified party otherwise than under such subparagraph. In case
any such action shall be brought against any indemnified party, and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein, and, to the
extent that it shall wish, jointly with any other indemnifying party,
similarly notified, to assume the defense thereof, with counsel satisfactory
to such indemnified party, and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subparagraph for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that any indemnified
party shall have the right to employ counsel to represent such indemnified
party if, in the reasonable judgment of such indemnified party, by reason of
an actual or potential conflict of interest, it is advisable for such
indemnified party to be represented by separate counsel, in which event the
fees and expenses of such separate counsel shall be borne by the indemnifying
party and be reimbursed as they are incurred. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding and
does not include a statement as to, or an admission of, fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 5 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and you on the other from the offering
of the Notes, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and you on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and you on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes (before
deducting expenses) received by the Company bear to the total compensation or
profit (before deducting expenses) received or realized by you from
the offering, distribution, purchase and resale, or underwriting, of the
Notes. 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 relates to
information supplied by the Company or you and the parties' relative intent,
knowledge, access to information and opportunity, and actions and
inaction, to correct or prevent such untrue statement or omission. The
Company and you agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the first sentence of this
subsection (d). The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence
of 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 action or claim (which shall be limited as
provided in subsection (c) above if the indemnifying party has assumed the
defense of any such action in accordance with the provisions thereof) which
is the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), you shall not be required to contribute any amount in excess
of the amount by which the total price at which the Notes offered
through or underwritten by you and distributed to the public were offered to
the public exceeds the amount of any damages which you have 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) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. Promptly after receipt by an indemnified party
under this subsection (d) of notice of the commencement of any action against
such party in respect of which a claim for contribution may be made
against an indemnifying party under this subsection (d), such indemnified
party shall notify the indemnifying party in writing of the commencement
thereof if the notice specified in subsection (c) above has not been given
with respect to such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under this subsection (d).
(e) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have to you and
shall extend, upon the same terms and conditions, to each person, if any, who
controls you within the meaning of the Act or the Exchange Act; and your
obligations under this Section 5 shall be in addition to any liability which
you may otherwise have and shall extend, upon the same terms and conditions,
to each director of the Company (including any person who, with his consent,
is named in the Registration Statement as about to become a director of the
Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act or the Exchange Act.
6. Conditions. Your obligation to proceed hereunder shall be subject to
the accuracy of and compliance with the representations and warranties of the
Company herein contained on and as of the date of the Agency Agreement or
Terms Agreement and the Closing Date, to the accuracy of the statements made
by the Company's officers in any certificate given pursuant to the provisions
of such Agency Agreement or Terms Agreement, to the performance by the Company
of its obligations thereunder, and to the following additional terms and
conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceedings for that purpose shall
have been initiated or, to the knowledge of the Company, threatened, by the
Commission, and any request for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your reasonable satisfaction.
(b) You shall not have advised the Company that the Registration
Statement or the Prospectus contains an untrue statement of a fact which, in
your opinion, is material, or omits to state a fact which, in your opinion,
is material and is required to be stated therein, or is necessary to make the
statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been, on a consolidated
basis, any material adverse change in the capital stock, short-term debt or
long-term debt of the Company and its subsidiaries, or any material adverse
change, or any development involving a prospective material adverse change, in
the condition (financial or other), business, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, which, in
any such case, is in your reasonable judgment, so material and adverse as to
make it impractical or inadvisable to offer or deliver the Notes on the terms
and in the manner contemplated in the Prospectus.
(d) On the Closing Date, you shall have received the opinion of counsel
to the Company, dated the Closing Date, to the effect that:
(i) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware; the Company's
subsidiaries have been duly incorporated and are existing corporations in good
standing under the laws of their respective jurisdictions of incorporation;
each of the Company and its subsidiaries has full power and authority
(corporate and other) to conduct its business as described in the Registration
Statement; and each of the Company and its subsidiaries is duly qualified to
do business and is in good standing in each jurisdiction in which it owns or
leases any material properties, or in which the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified would not have a material adverse effect on the financial condition
or results of operations of the Company and its subsidiaries considered as a
whole;
(ii) Each of the Indentures has been duly authorized, executed, delivered
and qualified under the Trust Indenture Act; the Notes have been duly
authorized; each of the Indentures constitutes, and the Notes, when duly
executed, authenticated, issued and delivered as contemplated hereby and by
the respective Indentures, will constitute, valid and legally binding
obligations of the Company in accordance with their terms and the terms of the
respective Indentures, subject to the General Qualifications as defined in the
Legal Opinion Accord of the American Bar Association Section of Business Law
(1991);
(iii) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and the Company owns all outstanding shares of capital
stock of each significant subsidiary (as defined in Rule 405 under the Act)
(except as otherwise stated in the Prospectus then in use), in each such case
subject to no mortgage, pledge, lien, encumbrance, charge or adverse claim;
(iv) The Registration Statement has become effective under the Act and to
the best knowledge of such counsel 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 counsel, threatened,
by the Commission;
(v) The Registration Statement and the Prospectus, and any amendment or
supplement thereto, comply as to form in all material respects with the
requirements of the Act, the Exchange Act, the Trust Indenture Act and the
Rules and Regulations (except that such counsel need express no opinion as to
the financial statements and other financial data included therein); and such
counsel has no reason to believe that either the Registration Statement or the
Prospectus or any amendment or supplement thereto (except as aforesaid)
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; the statements made in the Prospectus under
the headings "Description of Notes" and "Description of Debt Securities",
insofar as they purport to summarize provisions of documents specifically
referred to therein, fairly present the information called for with respect
thereto by the registration statement form;
(vi) The descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings, contracts and other documents
are accurate and fairly present the information required to be shown with
respect thereto; and such counsel does not know of any statutes or legal or
governmental proceedings required to be described in the Prospectus which are
not described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not described and
filed as required; and
(vii) This Agreement has been duly authorized, executed and delivered by
the Company; the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any statute
regulating the business or operations of the Company or any of its
subsidiaries, any indenture, mortgage, deed of trust, note agreement or other
agreement or instrument known to such counsel to which the Company or any of
its subsidiaries is a party or by which it is bound or to which any of the
property of the Company or any of its subsidiaries is subject, the Company's
charter or by-laws, or any order, rule or regulation regulating the business
or operation of the Company or any of its subsidiaries known to such counsel
of any court or governmental agency or body having jurisdiction over the
Company or any of its properties; and no consent, approval, authorization or
order of any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance or sale of the Notes by the Company hereunder, except such
as have been obtained under the Act and the Trust Indenture Act and such as
may be required under state securities laws in connection with the sale of the
Notes.
(e) You shall have received from your counsel, LeBoeuf, Lamb, Greene &
MacRae, L.L.P., such opinion or opinions dated the Closing Date with respect
to the issuance and sale of the Notes, the Registration Statement, the
Prospectus and other related matters as you may reasonably require, and the
Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(f) On the Closing Date, you shall have received a letter from the
Company's independent certified accountants, dated the Closing Date, to the
effect set forth in Exhibit 2 hereto.
(g) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall not have been
any material change or decrease specified in the letter referred to in
paragraph (f) above which in the judgment of any agent or dealer makes it
impractical or inadvisable to proceed hereunder.
(h) On the Closing Date, you shall have received from the Company a
certificate, signed by the Chairman of the Board, a Vice Chairman, the
President or a Vice President and by the principal financial or accounting
officer, dated the Closing Date, to the effect that, to the best of their
knowledge based on reasonable investigation:
(i) The representations and warranties of the Company in this Agreement
are true and correct, as if made at and as of the Closing Date, and the
Company has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or are pending or threatened, under the Act; and
(iii) The Registration Statement and the Prospectus, and any amendments
or supplements thereto, contain all statements and information required to be
included therein, and neither the Registration Statement nor the Prospectus,
nor any amendment or supplement thereto, includes any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and, since
the effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented prospectus which has
not been so set forth.
(i) The Company shall have furnished to you such further certificates and
documents as you shall have reasonably requested.
The obligations of you as dealer to purchase Notes pursuant to any Terms
Agreement 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 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
Notes, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of
the circumstances existing at such time, not misleading.
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as required by this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
in all material respects satisfactory in form and substance to you and your
counsel, this Agreement and all of your obligations hereunder may be canceled
by you at, or at any time prior to, the Closing Date. Notice of such
cancellation shall be given to the Company in writing, or by telegraph
confirmed in writing.
The Company agrees that any person who has agreed to purchase and pay for
any Note pursuant to a solicitation by any of the Agents shall have the right
to refuse to purchase such Note if, (i) at the date of settlement therefor,
any condition set forth in Section 6(a), (b) or (c) (such conditions to be
applicable as if the agreement to purchase were a Terms Agreement) shall not
be satisfied, or (ii) subsequent to the agreement to purchase such Note, there
shall 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 Notes, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not misleading;
provided, that, in each of (i) and (ii) above, the opinion, judgment or belief
of the Agent that presented the offer to purchase such Note being substituted
for, and exercised instead of, any opinion, judgment or belief of a purchaser
(it being understood that under no circumstance shall any such Agent have any
duty or obligation to the Company or any such person to exercise the opinion,
judgment or belief permitted to be exercised under this paragraph).
7. Additional Covenants. The Company hereby further agrees that:
(a) Each acceptance by it of an offer for the purchase of Notes and each
sale of Notes to you as dealer pursuant to a Terms Agreement shall be deemed
to be an affirmation that the representations and warranties of the Company
contained in this Agreement are true and correct at the time of such
acceptance or sale, and an undertaking that such representations and
warranties will be true and correct at the time of delivery to the purchaser
or his agent or to you, as dealer, of the Note or Notes relating to such
acceptance or sale, as though made at and as of each such time (except that
such representations and warranties shall be deemed to relate to the
Registration Statement as then in effect and the Prospectus then in use).
(b) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Sticker or by an amendment or
supplement providing solely for a change in the identity of any agent,
relating to the sale of any Notes, specifying the commission payable to or
discounts received by such agent, or making a change in the range of
maturities or other similar changes) or if so indicated in a Terms Agreement,
the Company sells Notes to you as dealer, the Company shall furnish or cause
to be furnished forthwith to you a certificate in form satisfactory to you in
your reasonable judgment to the effect that the statements contained in the
certificate referred to in Section 6(h) hereof which was last furnished to you
are true and correct at the time of such amendment or supplement as though
made at and as of such time (except that such statements shall be deemed to
relate to the Registration Statement as then in effect and the Prospectus then
in use) or, in lieu of such certificate, a certificate of the same tenor as
the certificate referred to in said Section 6(h) but modified to relate to the
Registration Statement as then in effect and the Prospectus then in use and
signed by the Chairman of the Board, a Vice Chairman, President, or a Vice
President, and by the principal financial or accounting officer.
(c) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented (other than by a Pricing Sticker or by an amendment or
supplement providing solely for a change in the identity of any agent,
relating to the sale of any Notes, specifying the commission payable to or
discount received by such agent, or making a change in the range of maturities
or other similar changes), or if so indicated in a Terms Agreement, the
Company sells Notes to you as dealer, the Company shall furnish or cause to be
furnished forthwith to you a written opinion of counsel to the Company dated
the date of delivery of such opinion, in form satisfactory to LeBoeuf, Lamb,
Greene & MacRae, L.L.P., of the same tenor as the opinion referred to in
Section 6(d) hereof but modified to relate to the Registration Statement as
then in effect and the Prospectus then in use or, in lieu of such opinion,
such counsel shall furnish you with a letter to the effect that you may rely
on such last opinion to the same extent as though it were dated the date of
such letter authorizing reliance (except that statements in such last opinion
shall be deemed to relate to the Registration Statement as in effect and the
Prospectus as in use at the time of delivery of such letter authorizing
reliance).
(d) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented to set forth financial information included in or
derived from the Company's consolidated statement of income through the end of
the preceding fiscal quarter, or, if so indicated in a Terms Agreement, the
Company sells Notes to you as dealer, the Company shall cause its then
independent auditors forthwith to furnish you a letter, dated the date of
filing of such amendment or supplement with the Commission or the date of the
closing under such Terms Agreement, as the case may be, in form satisfactory
to you, of the same tenor as the corresponding portions of the letter referred
to in Section 6(f) hereof but modified to relate to the Registration Statement
as then in effect or the Prospectus then in use and with such changes as may
be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company, to the extent
such financial statements and other information are available as of a date not
more than five business days prior to the date of such letter.
8. Termination. If this Agreement is an Agency Agreement it may be
terminated with respect to any party hereto at any time by such party upon the
giving of written notice of such termination to the other parties hereto. You
may also terminate any Terms Agreement, immediately upon notice to the
Company, if at any time (i) trading generally on the New York Stock Exchange,
the American Stock Exchange or the NASDAQ National Market has been suspended
or materially limited, (ii) trading in the Company's securities on the New
York Stock Exchange has been suspended or materially limited, (iii) a banking
moratorium has been declared by Federal or New York authorities, or (iv) there
has occurred since the execution of this Agreement an outbreak or material
escalation of major hostilities in which the United States is involved, a
declaration of war by Congress or other calamity or crisis and, in the case of
any such event specified in clauses (i) through (iv) above, the effect of such
event, in your reasonable judgment, makes it impractical or inadvisable to
market the Notes or enforce contracts for the sale of the Notes on the terms
and in the manner contemplated in the Prospectus. In the event of any such
termination, no party will have any liability to any other party hereto,
except that (i) each of you shall be entitled to any commissions earned in
accordance with Section 3(a) hereof, (ii) if at the time of termination (A)
any of you shall own any of the Notes with the intention of reselling them or
(B) an offer to purchase any of the Notes has been accepted by the Company,
but the time of delivery to the purchaser or his agent of the Note or Notes
relating thereto has not occurred, the covenants set forth in Sections 4 and 7
hereof shall remain in effect until such Notes are so resold or delivered, as
the case may be, and (iii) the covenant set forth in Section 4(d) hereof, the
provisions of Section 4(f) hereof, the indemnity agreement set forth in
Section 5 hereof, and the provisions of Sections 9 and 12 hereof shall remain
in effect.
9. Survival of Indemnities, Representations and Warranties. The
indemnities, representations and warranties made herein shall survive the
delivery of the Notes and shall continue in full force and effect regardless
of any investigation made by the party relying upon any such indemnity,
representation or warranty. The provisions of Sections 4(f) and 5 of these
Basic Provisions shall survive the termination of this Agreement.
10. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall
be mailed, delivered or sent by facsimile transmission and confirmed to you at
the address set forth in this Agreement or if sent to the Company, shall be
mailed, delivered or sent by facsimile transmission and confirmed to the
Company at 250 East Carpenter Freeway, Irving, Texas 75062-2729
(Fax: 972-652-4629), attention of the Treasurer. Either party to this Agreement
may change
such address for notices by sending to the other party to this Agreement
written notice of a new address for such purpose.
11. Parties. This Agreement shall inure to the benefit of and be binding
upon you, the Company, our respective successors and the officers and
directors and controlling persons referred to in Section 5 hereof, and no
other person shall have any right or obligation hereunder.
12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
13. Counterparts. This Agreement may be signed in various counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same instrument.
<PAGE>
EXHIBIT 2
(1) They are independent certified public accountants with respect to the
Company within the meaning of the Act and the Rules and Regulations and the
answer to Item 10 of Form S-3 of the Registration Statement is correct insofar
as it relates to them.
(2) In their opinion, the financial statements examined by them and
incorporated by reference in the Registration Statement and Prospectus comply
as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the published
Rules and Regulations thereunder.
Include the following clauses modified appropriately in light of each of
the documents incorporated by reference in the Prospectus and any interim
results contained in the Prospectus.
(3) On the basis of procedures referred to in such letter, including a
reading of the latest available interim financial statements of the Company
and inquiries of officials of the Company responsible for financial and
accounting matters, nothing caused them to believe that:
--If incorporated Annual Report on Form 10-K contains unaudited financial
information derived from audited financial statements (e.g., unaudited five or
ten year summaries of financial information), insert -- (A) the unaudited
information with respect to the results of operations --and financial
position-- for --and at the end of-- the years ended , 19 , included --or
incorporated by reference-- in the Company's Annual Report on Form 10-K for
the year ended , 19 , does not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act and the
published rules and regulations thereunder, or does not agree with the
corresponding amounts in the audited financial statements for the years then
ended included --or incorporated by reference-- in the Company's Annual
Reports on Form 10-K for the years ended , 19 , and , 19 ; or--
--If Prospectus includes unaudited information derived from audited
financial statements, insert -- (B) the unaudited information with respect to
the results of operations --and financial position-- for --and at the end of--
the years ended , 19 , included in the Prospectus under the caption " " does
not agree with the corresponding amounts in the audited financial statements
for the years then ended included --or incorporated by reference-- in the
Company's Annual Reports on Form 10-K for the years ended , 19 , and , 19 ;
or--
--If a Quarterly Report on Form 10-Q is incorporated by reference in the
Prospectus, insert -- (C) the unaudited financial statements included in the
Company's Quarterly Report--s-- on Form 10-Q for the quarter--s-- ended , 19
- --,-- --and-- -- , 19 -- --and- -- , 19 -- --respectively,-- do not comply as
to form in all material respects with the applicable accounting requirements
of the Exchange Act and the published rules and regulations thereunder or are
not stated on a basis substantially consistent with that of the audited
financial statements included in the Company's Annual Report on Form 10-K for
the year ended , 19 ; or--
--If unaudited interim financial information is included in the
Prospectus and is derived from unaudited financial information included in a
Quarterly Report on Form 10-Q referred to in (C) above, insert -- (D) the
unaudited information with respect to the results of operations --and
financial position-- for --and at the end of-- the months ended , 19 and
, 19 , included in the Prospectus under the caption " " does not agree with
the corresponding amounts in the unaudited financial statements referred to in
Subsection (C), which were not included in the Prospectus but from which such
unaudited information included in the Prospectus was derived, or was not
determined on a basis substantially consistent with that of the corresponding
amounts in the audited
financial statements included in the Company's Annual Report on Form 10-K for
the year ended , 19 ; or--
--If unaudited interim "capsule" information is included in the
Prospectus but is not derived from unaudited financial information included or
incorporated by reference in any incorporated document, insert -- (E) the
unaudited net income --Insert other applicable items-- for the month periods
ended --Insert dates-- included in the Prospectus were not determined on a
basis substantially consistent with the corresponding amounts in the audited
financial statements included --or incorporated by reference-- in the
Company's Annual Report on Form 10-K for the year ended , 19 , and do not
agree with the corresponding amounts in the unaudited financial statements for
such periods which were not included in the Prospectus but from which such
amounts were derived and that such unaudited financial statements are not
fairly presented in conformity with that of the audited financial statements
included --or incorporated by reference-- in the Prospectus; or--
(F) at the date of the latest available interim statement of consolidated
financial position of the Company and at a subsequent specified date not more
than five days prior to the date of such letter, there was any change in the
capital stock or increase in total short-term or total long-term debt of the
Company and its consolidated subsidiaries or any decrease in its consolidated
net assets as compared with amounts shown in the Consolidated Balance Sheet as
of , 19 included --or incorporated by reference-- in the Prospectus; or
(G) for the period from --Insert date of latest statement of income
included or incorporated by reference in the Prospectus-- to the date of the
latest available interim Consolidated Statement of Income of the Company and
to a subsequent specified date not more than five days prior to the date of
such letter, there were any decreases, as compared with the corresponding
period of the previous year --If appropriate, insert -- and with the period
of corresponding length ended --Insert date of latest income statement
included or incorporated by reference in the Prospectus----, in consolidated
total revenue or consolidated net income, except in all cases for changes or
decreases which the Prospectus discloses have occurred or may occur or as may
be set forth in such letter.
4. In addition to their examination referred to in their report--s--
included --incorporated by reference-- in the Registration Statement and
Prospectus and the procedures referred to in (3) above, they have carried out
certain other specified procedures, not constituting an audit, with respect to
the dollar amounts, percentages and other financial information (in each case
to the extent that such dollar amounts, percentages and other financial
information, either directly or by analysis or computation, are derived from
the general accounting records of the Company and its subsidiaries) which are
included --or incorporated by reference-- in the Prospectus and appear in the
Prospectus --or incorporated documents-- under the captions " ", and nothing
caused them to believe that such dollar amounts, percentages and financial
information were not in agreement with the general accounting records of the
Company.
<PAGE>
SCHEDULE A
ASSOCIATES CORPORATION OF NORTH AMERICA
AGENCY AGREEMENT
By executing this Agency Agreement, the Agent referenced herein and the
Company agree to all the terms and provisions of the "Associates Corporation
of North America, Medium Term Notes, Basic Provisions
For Agency and Terms Agreements, Dated:-- -- attached hereto and incorporated
herein by reference.
Additional terms are as follows:
Registration Statement No. 333-
Prospectus dated -- --
Agent:
Title of Securities: Medium Term Senior Notes, Series -- --
Medium Term Subordinated Notes, Series -- --
Indentures:
Effective Date of Agreement:
Term of appointment:
Specifications as to Notes authorized for Agent:
Closing Date:
Agent's commissions or other compensation:
Address for notices per Section 10:
Dated:
Associates Corporation of North America
By
Agreed to and accepted:
By
Title
<PAGE>
SCHEDULE B
ASSOCIATES CORPORATION OF NORTH AMERICA
Medium Term Notes
TERMS AGREEMENT
, 19
Associates Corporation of North America
250 East Carpenter Freeway
Irving, Texas 75062-2729
Attention: Treasurer
Re: Basic Provisions For Agency And Terms Agreements dated -- --
The undersigned agrees to purchase the following principal amount of
Medium Term --Senior-- --Subordinated-- Notes, Series -- -- issued under
Registration Statement No. 333- :
$
Prospectus dated -- --
Interest Rate or Method of Calculation:
Frequency of Interest Reset:
Maximum or Minimum Interest Rates:
Spread or Spread Multiplier:
Date of Maturity:
Initial Public Offering Price: %
Discount: % of Principal Amount
Indenture:
Closing Date:
Form of Note: --global or individual certificate--
--The certificate referred to in Section 6(h) of the Basic Provisions
attached hereto, the opinions
referred to in Section 6(d) of the Basic Provisions attached hereto and the
accountants' letter referred to in
Section 6(f) of the Basic Provisions attached hereto will be required.--
Payment on the Settlement Date and at maturity will be made in
immediately available funds.
By executing this Terms Agreement, the undersigned dealer and the Company
agree to the terms hereof
and all the terms and provisions of the "Associates Corporation of North
America, Medium Term Senior Notes,
Basic Provisions For Agency And Terms Agreements, Dated: -- --" attached
hereto and incorporated herein by
reference.
By
( )
Accepted:
Associates Corporation of North America
By
ASSOCIATES CORPORATION OF NORTH AMERICA
<PAGE>
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL 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 OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) 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 DEPOSITORY TRUST COMPANY 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.
Registered No. R-
CUSIP
ASSOCIATES CORPORATION OF NORTH AMERICA
MEDIUM TERM SENIOR NOTE, SERIES J
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "INTEREST ACCRUAL PERIOD/OID" AND
"YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES
OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT("OID") RULES.
<TABLE>
<C> <C>
Floating Rate Note Fixed Rate Note
Principal Amount: Interest Rate:
(if a Fixed Rate Note)
Original Issue Date: Maturity Date:
Interest Payment Dates: Total Amount of OID:
Interest Accrual Date: Initial Accrual Period\OID:
Issue Price: Yield to Maturity:
Specified Currency:
Optional Redemption: Optional Repayment:
Yes, see Other Provisions Yes, see Other Provisions
No No
Optional Reset Dates: Optional Extension of Maturity:
Yes, see Other Provisions Yes, see Other Provisions
No No
Amortizing Note: Zero Coupon Note:
Yes, see Other Provisions Yes, see Other Provisions
No No
</TABLE>
<PAGE>
<TABLE>
Only applicable if this is a Floating Rate Note:
<C> <C>
Initial Interest Rate: Spread (plus or minus):
Interest Rate Basis: Spread Multiplier:
Index Maturity: Maximum Interest Rate:
Interest Payment Period: Minimum Interest Rate:
Interest Reset Period: Lock-out Rate:
(if daily or weekly reset)
Interest Reset Dates: Lock-out Period: (if daily or weekly reset)
Interest Determination Dates:
Other Provisions:
/TABLE
<PAGE>
Associates Corporation of North America, a Delaware corporation
(herein
called the "Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to CEDE&Co. or registered assigns, the principal amount of
_________________________________________________________ on the "Maturity
Date", as specified above, or earlier if and to the extent so provided herein,
and to pay interest thereon (and premium, if any), as described on the reverse
hereof.
Payment of the principal of (and premium, if any) and interest on this
Note due at Maturity will be made, upon presentation of this Note, in
immediately available funds, the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, or at such
additional offices or agencies maintained for such purpose as the Company may
from time to time designate, in such coin or currency as at the time of
payment is legal tender for debts in the Specified Currency indicated on the
face hereof; provided, however, that at the option of the Company payment of
interest other than at Maturity may be made by wire transfer or (subject to
collection) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Securities Register. Except as may be
otherwise provided above, if the Specified Currency shown above is other than
U.S. dollars (a "Foreign Currency Note"), the Company will arrange to convert
all payments in respect hereof into U.S. dollars in the manner described
below, unless otherwise notified in accordance with the provisions set forth
below.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH BELOW AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO AND INCORPORATED
HEREIN, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT
AS IF SET FORTH AT THIS PLACE. IN THE EVENT A PRICING SUPPLEMENT IS
INCORPORATED AS PART OF THE TERMS OF THIS NOTE, IF THE PROVISIONS OF THE
PRICING SUPPLEMENT CONTRADICT OR ARE INCONSISTENT WITH THE TERMS SET
FORTH ON THE REVERSE HEREOF, THE PROVISIONS CONTAINED IN THE PRICING
SUPPLEMENT SHALL GOVERN.
Unless the certificate of authentication hereon has been manually
executed by or on behalf of the Trustee referred to on the reverse hereof by
manual signature, this Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
ASSOCIATES CORPORATION
OF NORTH AMERICA [SEAL]
___________________________
BY: [ ]
TITLE: [ ]
ATTEST:
___________________________
BY: [ ]
TITLE: Assistant Secretary<PAGE>
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities of the series provided for under the
within-mentioned Indenture.
The Chase Manhattan Bank
as Trustee
___________________________
Authorized Officer
<PAGE>
ASSOCIATES CORPORATION OF NORTH AMERICA
MEDIUM TERM SENIOR NOTE, SERIES J
1. This Note is one of a duly authorized issue of unsecured debentures,
notes or other evidences of indebtedness (hereinafter called the "Securities")
of the Company of the series specified above (the "Notes"), all such
Securities issued and to be issued under an indenture dated as of November 1,
1995 (the"Indenture") between the Company and The Chase Manhattan Bank
("Chase"), as Trustee, to which Indenture and all further indentures
supplemental thereto reference is hereby made for a specification of the
rights and limitation of rights thereunder of the Holders of the Securities
and of the rights, obligations, duties and immunities of the Trustee and of
the Company. The series of Securities consisting of the Notes is unlimited in
aggregate principal amount. As provided in the Indenture, said Securities may
be issued in one or more series, which different series may be issued in
various principal amounts, may bear different dates and mature at different
times, may bear interest, if any, at different rates and may otherwise vary as
in the Indenture provided or permitted. The Notes may be issued at various
times in various principal amounts, may bear interest at different rates and
may otherwise vary, all as provided for in the Indenture.
Unless otherwise specified on the face hereof, the following terms have
the meanings set forth below:
"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 or required by law, regulation or executive order to
close in The City of New York and, with respect to Notes as to which
LIBOR (as defined in Section 3.B. below) is the applicable interest rate
basis, is also a London Business Day (as defined below); provided,
however, that with respect to any Specified Currency, such day is also
not a day on which banking institutions are authorized or required by
law, regulation or executive order to close in the Principal Financial
Center (as defined below) of the country of such Specified Currency (or,
in the case of European Currency Units ("ECU"), is also not a day that
appears as an ECU non-settlement day on the display designated at "ISDE"
on the Reuter Monitor Money Rates Service (or is not a day designated as
an ECU non-settlement day by the ECU Banking Association in Paris) or,
if ECU non-settlement days do not appear on that page (and are not so
designated), a day that is not a day on which payments in ECU cannot be
settled in the international interbank market).
"Calculation Agent" means, unless otherwise specified on the face
hereof, Chase acting in the capacity of calculation agent if this is a
Floating Rate Note and, where applicable, certain other Notes. The
Company may at any time designate additional Calculation Agents or
rescind the designation of Calculation Agents.
"Calculation Date" means the date by which interest payable on any
Interest Payment Date or upon Maturity, as the case may be, is
calculated. Unless otherwise specified on the face hereof, the
Calculation Date, where applicable, pertaining to an 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 or (ii) the Business Day
preceding the applicable Interest Payment Date or date of Maturity, as
the case may be.
"Exchange Rate Agent" means, unless otherwise specified on the
face hereof, Chase acting in the capacity of exchange rate agent if this
is a Foreign Currency Note.
"Index Maturity" means, if this is a Floating Rate Note, the
designated maturity of the instrument(s) or obligation(s) on which the
interest rate is based, as specified on the face hereof.
"Interest Determination Date" means, for any Interest Reset Date
(as specified on the face hereof, or if not so specified, as defined in
Section 3.B. below) if this is a Floating Rate Note, the date for
determining the rate of interest that will take effect on such Interest
Reset Date. Unless otherwise specified on the face hereof, the Interest
Determination Date will be as described under Section 3.B. below.
"Interest Payment Date" means each date specified on the face hereof
(other than at Maturity) on which, under the terms of this Note,
interest is payable.
"Lockout Period" means, if this is a Floating Rate Note which
resets daily or weekly, unless otherwise specified on the face hereof, a
period of two Business Days immediately prior to each Interest Payment
Date and prior to Maturity during which the Lockout Rate will be in
effect.
"Lockout Rate" means, if this is a Floating Rate Note, the
interest rate in effect on the first day of the Lockout Period and
remaining in effect during the Lockout Period.
"London Business Day" means any day (a) if the Designated LIBOR
Currency (as defined below) is other than the ECU, on which dealings in
deposits in such Designated LIBOR Currency are transacted in the London
interbank market or (b) if the Designated LIBOR Currency is the ECU,
that is not designated as an ECU Non-Settlement Day by the ECU Banking
Association in Paris or otherwise generally regarded in the ECU
interbank market as a day on which payments on ECUs shall not be made.
"Maturity" means (i) the date on which the principal of this Note
becomes due and payable or (ii) in the case of Amortizing Notes, the
date on which all remaining unpaid principal becomes due and payable, in
any case, in accordance with its terms, whether at its Maturity Date or
by declaration of acceleration, call for redemption, put for repayment
or otherwise.
"Maturity Date" means the date on which this Note will mature, as
specified on the face hereof.
"Paying Agent" means, unless otherwise specified on the face
hereof, Chase acting in the capacity of paying agent with regard to the
Notes. The Company may at any time designate additional Paying Agents
or rescind the designation of Paying Agents or approve a change in the
office through which the Paying Agent acts.
"Record Date" means, unless otherwise specified on the face
hereof, the date (whether or not a Business Day) that is 15 days prior
to the applicable Interest Payment Date.
Unless otherwise specified on the face hereof, if this Note is a
Floating Rate Note, all percentages resulting from any calculation of interest
on this Note will be rounded, if necessary, to the nearest one hundred-
thousandth of a percent (.0000001), with five-millionths of a percentage point
rounded upward (e.g., 9.876545% (or .09876545) would be rounded to 9.87655%
(or .0987655)), and all U.S. dollar amounts used in or resulting from such
calculation on this Note, if a Floating Rate Note, will be rounded to the
nearest cent or, if the Specified Currency is payable in other than U.S.
dollars, the smallest whole unit of the Specified Currency (with one-half cent
or unit being rounded upwards).
2. Neither this Note nor the Notes are redeemable or repayable in full
or in part prior to its Maturity Date or subject to any sinking fund
provisions unless any such redemption, repayment or sinking fund provisions
are stated on the face hereof or on the face of any of the other Notes, as the
case may be, and then only under such terms as may be so stated there. Any
required notice of redemption, repayment or sinking fund payments shall be
given only to the Registered Holders of Notes which bear provisions for such
required redemption, repayment or sinking fund payments, as the case may be.
3.A. If this is a Fixed Rate Note, unless it is also a Zero-Coupon
Note, the Company promises to pay interest on the principal amount at the
Interest Rate specified on the face hereof from and including the Original
Issue Date specified on the face hereof, or from and including the most recent
Interest Payment Date to which interest has been paid or duly provided for,
to, but excluding, the applicable Interest Payment Date or the date of
Maturity, as the case may be, until the principal hereof is paid or made
available for payment. If this is a Fixed Rate Note, interest will be
payable, unless otherwise specified on the face hereof, in consecutive
semi-annual payments on May 1 and November 1 of each year and at Maturity
commencing on the May 1 or November 1 next succeeding such Original Issue
Date; provided, however, that if such Original Issue Date occurs either
between a Regular Record Date (defined herein below) and the next succeeding
Interest Payment Date or on an Interest Payment Date, interest payments will
commence on the Interest Payment Date following the next succeeding Regular
Record Date (defined herein below). Interest shall be computed on the basis
of a 360-day year consisting of twelve 30-day months. If this is a Fixed Rate
Note, and an Interest Payment Date or the date of Maturity 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 shall accrue on
the amount so payable for the period from and after the Interest Payment Date
or the date of Maturity, as the case may be. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in said Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business 15 calendar days prior to the Interest
Payment Date (the "Regular Record Date") next preceding such Interest Payment
Date; provided, however, that the interest payable on the Interest Payment
Date occurring at Maturity will be payable to the Person to whom principal
shall be payable. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holder on such
Regular Record Date, and may 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 ("Special Record Date") not less than 10 days prior to
the date fixed by the Trustee for payment of such defaulted interest, notice
of which Special Record Date shall be given to Holders of Notes not less than
15 days prior to such Special Record Date. If this Note specifies that it is
an Original Issue Discount Note, the Company will pay any defaulted interest
at a rate equal to the Yield to Maturity specified on the face hereof. An
Original Issue Discount Note shall be any Note issued with original issue
discount for United States federal income tax purposes.
3.B. If this is a Floating Rate Note, the Company promises to pay
interest on the principal amount at a rate per annum equal to the Initial
Interest Rate specified on the face hereof until the first Interest Reset Date
so specified following the Original Issue Date so specified and thereafter at
a rate determined in accordance with the provisions set forth below under the
applicable heading "Determination of CD Rate," "Determination of Commercial
Paper Rate," "Determination of the CMT Rate," "Determination of Federal Funds
Rate," "Determination of the 11th District Cost of Funds Rate," "Determination
of the Kenny Rate," "Determination of LIBOR," "Determination of the Prime
Rate," "Determination of Treasury Rate," or such other Interest Rate Basis as
set forth on the face hereof, depending upon whether the Interest Rate Basis
so specified is CD Rate, Commercial Paper Rate, CMT Rate, Federal Funds Rate,
11th District Cost of Funds Rate, Kenny Rate, LIBOR, Prime Rate, Treasury Rate
or such other rate, until the principal hereof is paid or duly made available
for payment. The Company will pay interest daily, weekly, monthly, quarterly,
semi-annually or annually as specified on the face hereof under "Interest
Payment Period," commencing with the first Interest Payment Date so specified
next succeeding the Original Issue Date, and at Maturity; provided, however,
that if such Original Issue Date occurs either between a Regular Record Date
and the next succeeding Interest Payment Date or on an Interest Payment Date,
interest payments will commence on the Interest Payment Date following the
next succeeding Regular Record Date; unless otherwise provided on the face
hereof, interest will be payable: in the case of Floating Rate Notes with a
daily, weekly or monthly Interest Reset Date, on the third Wednesday of each
month or the third Wednesday of March, June, September and December, as
provided on the face hereof; with a quarterly Interest Reset Date, on the
third Wednesday of March, June, September and December of each year; with
semi-annual Interest Reset Date, on the third Wednesday of the two months
provided on the face hereof; and with an annual Interest Reset Date, on the
third Wednesday of the month provided on the face hereof, and provided
further, however, that if an Interest Payment Date would fall on a day that is
not a Business Day, such Interest Payment Date shall be postponed to the next
day that is a Business Day, except that in case the Interest Rate Basis is
LIBOR, as specified on the face hereof, if such next succeeding Business Day
falls in the next succeeding calendar month, such Interest Payment Date shall
be the immediately preceding Business Day. Except as provided on the face
hereof and in the Indenture referred to herein, interest payments will be made
on the Interest Payment Dates specified on the face hereof. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in 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; provided, however, that interest
payable at Maturity will be payable to the Person to whom principal shall be
payable. Any such interest which is payable but is not punctually paid or
duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Registered Holder hereof on such Regular Record Date, and may
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 Special Record Date
fixed by the Trustee, not less than 10 days prior to the date for payment of
such defaulted interest, notice of which Special Record Date shall be given to
the Holder hereof not less than 15 days prior to such Special Record Date, or
may be paid at any time in any other lawful manner, all as more fully provided
in the Indenture.
If this is a Floating Rate Note, the interest payable hereon on each
Interest Payment Date will include accrued interest from and including the
Original Issue Date or from and including the last Interest Payment Date to
which interest has been paid, as the case may be, to, but excluding, such
Interest Payment Date, and the interest payable at Maturity will include
accrued interest from the Original Issue Date or from the last Interest
Payment Date in respect of which interest has been paid, as the case may be,
to, but excluding, the date of Maturity. Accrued interest will be calculated
by multiplying the principal amount hereof by an accrued interest factor. This
accrued interest factor shall be computed by adding the interest factors
calculated for each day in the period for which accrued interest is being
calculated. The interest factor for each such day shall be computed by
dividing the interest rate applicable to such day by 360 if the Interest Rate
Basis is CD Rate, Commercial Paper Rate, 11th District Cost of Funds Rate,
Federal Funds Rate, LIBOR and Prime Rate, as indicated on the face hereof, by
365 if the Interest Rate Basis is Kenny Rate,as indicated on the face hereof.
The interest rate in effect on each day will be (a) if such day is an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to such Interest Reset Date or (b) if such day is not an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date, subject in either case
to any Maximum or Minimum Interest Rate limitation referred to on the face
hereof and to any adjustment by a Spread or a Spread Multiplier referred to on
the face hereof; provided, however, that (i) the interest rate in effect for
the period from the Original Issue Date to the first Interest Reset Date if
this is a Floating Rate Note will be either the initial interest rate (if any)
specified on the face hereof or if no interest rate is specified, the interest
rate calculated as set forth above and (ii) if this is a Floating Rate Note
which resets daily or weekly, unless otherwise specified on the face hereof,
the interest rate in effect for the Lockout Period will be the Lockout Rate.
If this is a Floating Rate Note for which a Lockout Period so applies, the
interest rate on this Note for the period from the Interest Payment Date to
the next Interest Reset Date shall be the interest rate that would have been
in effect as of the most recent Interest Reset Date on or prior to the
Interest Payment Date had such Lockout Period not been in effect.
Notwithstanding the foregoing, the interest rate hereon shall in no event be
higher than the maximum rate permitted by New York law as the same may be
modified by United States law of general application. Commencing with the
first Interest Reset Date specified on the face hereof following the Original
Issue Date and thereafter upon each succeeding Interest Reset Date specified
on the face hereof, the rate at which interest on this Note is payable shall
be adjusted as specified on the face hereof under Interest Reset Period;
provided, however, that if any Interest Reset Date would otherwise be 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 the Interest Rate Basis is
LIBOR and such next Business Day is in the next succeeding calendar month such
Interest Reset Date shall be the immediately preceding Business Day.
The Interest Determination Date pertaining to each Interest Reset Date
for CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes,
Prime Rate Notes, CMT Rate Notes and Kenny Rate Notes will be the Business Day
next preceding such Interest Reset Date. The Interest Determination Date
pertaining to each Interest Reset Date for 11th District Cost of Funds Rate
Notes will be the day of the month immediately preceding such Interest Reset
Date on which the Federal Home Loan Bank of San Francisco publishes the Index
(as defined below). The Interest Determination Date pertaining to each
Interest Reset Date for LIBOR Notes will be the second London Business Day
preceding such Interest Reset Date. The Interest Determination Date
pertaining to each Interest Reset Date for Treasury Rate Notes 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 normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally 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 Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week.
If this is a Floating Rate Note, subject to applicable provisions of law
and except as specified herein, on each Interest Reset Date, the rate of
interest shall be the rate determined in accordance with the provisions of the
applicable Interest Rate Basis heading below.
DETERMINATION OF CD RATE. If the Interest Rate Basis specified on the
face hereof is the CD Rate, this Note will bear interest for each Interest
Reset Period at the interest rate calculated with reference to the CD Rate and
the Spread or Spread Multiplier, if any, specified below.
"CD Rate" means, with respect to any Interest Determination Date, the
rate on that day for certificates of deposit as published on Telerate Page 120
(as defined below) under the column "Certs of Deposit" under the heading
"Daily Selected Money Market Rates from the Federal Reserve Bank of New York"
and having the Index Maturity designated on the face hereof or, if not so
published by 3:00 p.m., New York City time, on such Interest Determination
Date, the CD Rate will be the rate on such date for negotiable certificates of
deposit having the Index Maturity designated on the face hereof as published
by the Board of Governors of the Federal Reserve System in "Statistical
Release H.15(519), Selected Interest Rates," or any successor publication of
the Board of Governors of the Federal Reserve System ("Statistical Release
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
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 on the face hereof as published by the Federal Reserve
Bank of New York in its daily statistical release, "Composite 3:30 p.m.
Quotations for the U.S. Government Securities" ("Composite Quotations") under
the heading "Certificates of Deposit." If such rate is not yet published by
3:00 p.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the CD Rate on such Interest Determination
Date will be calculated by the Calculation Agent and will be the arithmetic
mean of the secondary market offered rates as of 10:00 a.m., New York City
time, on such Interest Determination Date, of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in The City of New York
selected by the Calculation Agent for negotiable certificates of deposit of
major United States money center banks of the highest credit standing (in the
market for negotiable certificates of deposit) with a remaining maturity
closest to the Index Maturity designated on the face hereof 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 will be the CD Rate in effect on such Interest Determination Date.
"Telerate Page 120" means the display designated as page "120" on Dow
Jones Markets Limited or any successor service (the "Telerate Service") (or
such other page as may replace Telerate Page 120 on that service for the
purpose of displaying money market rates as published in Statistical Release
H.15(519)).
DETERMINATION OF COMMERCIAL PAPER RATE. If the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, this Note will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if
any, specified below.
"Commercial Paper Rate" means, with respect to any Interest
Determination Date, the rate on that day for commercial paper as published on
Telerate Page 133 (as defined below) under the caption "AA - Nonfinancial
Comml Paper" under the heading "Daily Commercial Paper Rates from the Federal
Reserve Board" and having the Index Maturity designated on the face hereof or,
if not so published by 3:00 p.m., New York City time on such Interest
Determination Rate, the Money Market Yield (as defined below) of the rate on
that date for commercial paper having the Index Maturity designated on the
applicable Pricing Supplement as published in Statistical Release H.15(519),
under the heading "Commercial Paper-Nonfinancial." 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, then the Commercial Paper
Rate shall be the Money Market Yield of the rate on that Interest
Determination Date for commercial paper having the Index Maturity designated
on the face hereof as published in 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 Composite Quotations, the Commercial
Paper Rate for that Interest Determination Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic mean
(rounded to the nearest one-hundredth of a percent, with five one-thousandths
of a percent rounded upwards) of the offered rates of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent as
of 11:00 a.m., New York City time, on that Interest Determination Date, for
commercial paper having the Index Maturity designated on the face hereof
placed for an industrial issuer whose bond rating is "AA", or the equivalent,
from a nationally recognized 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 will be the Commercial
Paper Rate in effect on such Interest Determination Date.
"Telerate Page 133" means the display designated as page "133" on the
Telerate Service (or such other page as may replace Telerate Page 133 on that
service for the purpose of displaying commercial paper rates as published in
Statistical Release H.15(519)).
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
Money Market Yield
=
D 360
100
360 (D M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
DETERMINATION OF CMT RATE. If the Initial Rate Basis specified on the
face hereof is the CMT Rate, this Note will bear interest for each Interest
Reset Period at the interest rate calculated with reference to the CMT Rate
and the Spread or Spread Multiplier, if any, specified below.
"CMT Rate" means, with respect to any Interest Determination Date, the
rate published on the Designated CMT Telerate Page (as defined below) under
the caption " . . . Treasury Constant Maturities . . . Federal Reserve Board
Release H.15 . . ." under the column for the Designated CMT Maturity Index (as
defined below) (i) if the Designated CMT Telerate Page is 7055, the rate on
such Interest Determination Date and (ii) if the Designated CMT Telerate Page
is 7052, the week, or the month, as applicable, ended immediately preceding
the week in which such Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page, or if not displayed by 3:00 p.m., New
York City time, on such Interest Determination Date, then the CMT Rate for
such Interest Determination Date will be the treasury constant maturity rate
for the Designated CMT Maturity Index as published in the relevant Statistical
Release H.15(519). If such rate is no longer published, or if not published
by 3:00 p.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the CMT Rate for such Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index (or other United States Treasury rate for the Designated CMT
Maturity Index) for the Interest Determination Date with respect to such
Interest Reset Date as may then be published by either the Board of Governors
of the Federal Reserve System or the United States Department of the Treasury
that the Calculation Agent determines to be comparable to the rate formerly
displayed on the Designated CMT Telerate Page and published in the relevant
Statistical Release H.15(519). If such information is not provided by 3:00
p.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the CMT Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity,
based on the arithmetic mean of the secondary market closing offer side prices
as of approximately 3:30 p.m., New York City time, on such Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity
of approximately the Designated CMT Maturity Index and a remaining term to
maturity of not less than such Designated CMT Maturity Index minus one year.
If the Calculation Agent cannot obtain three such Treasury Note quotations,
the CMT Rate for such CMT Interest Determination Date will be calculated by
the Calculation Agent and will be a yield to maturity based on the arithmetic
mean of the secondary market offer side prices as of approximately 3:30 p.m.,
New York City time, on such Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event
of equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100,000,000. If three or four (and not
five) of such Reference Dealers are quoting as mentioned above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three such Reference Dealers are quoting
as mentioned above, the CMT Rate will be the CMT Rate in effect on such
Interest Determination Date. If two Treasury Notes with an original maturity
as described in the third preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display designated as page
"7055" or "7052" on the Telerate Service, as specified on the face hereof in
Other Provisions (or any other page as may replace such page on that service
for the purpose of displaying "Treasury Constant Maturities" as published in
Statistical Release H.15(519)); provided, however, that if no such page is so
specified on the face hereof, the Designated CMT Telerate Page shall be 7052
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the Treasury Notes (either one, two, three, five, seven, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated; provided, however, that if no such maturity is so specified on the
face hereof, the Designated CMT Maturity Index shall be two years.
DETERMINATION OF FEDERAL FUNDS RATE. If the Interest Rate Basis
specified on the face hereof is the Federal Funds Rate, this Note will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Federal Funds Rate and the Spread or Spread Multiplier, if
any, specified below.
"Federal Funds Rate" means, with respect to any Interest Determination
Date, the rate on that day for Federal Funds as published on Telerate Page 120
(as defined below) under the caption "Eff" under the column "Fed Funds
Effective" under the heading "Daily Selected Money Market Rates From The
Federal Reserve" or, if not so published by 3:00 p.m., New York City time, on
such Interest Determination Date, the Federal Funds Rate will be the rate on
such Interest Determination Date as published in Statistical Release H.15(519)
under the column "Effective Rate" under the heading "Federal Funds." If such
rate is not yet published by 3:30 p.m., New York City time, on the Calculation
Date pertaining to such Interest Determination Date, the Federal Funds Rate
for such 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 U.S. dollar Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York selected by the Calculation
Agent as of 9:00 a.m., New York City time, on such Interest Determination
Date; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate will be the Federal Funds Rate in effect on such Interest
Determination Date.
"Telerate Page 120" means the display designated as page "120" on the
Telerate Service (or such other page as may replace Telerate Page 120 on that
service for the purpose of displaying Federal Funds rates as published in
Statistical Release H.15(519)).
DETERMINATION OF 11th DISTRICT COST OF FUNDS RATE. If the Interest Rate
Basis specified on the face hereof is the 11th District Cost of Funds Rate,
this Note will bear interest for each Interest Reset Period at the interest
rate calculated with reference to the 11th District Cost of Funds Rate and the
Spread or Spread Multiplier, if any, specified below.
"11th District Cost of Funds Rate" means, with respect to any Interest
Determination Date, the rate on that day equal to the monthly weighted average
cost of funds for the calendar month immediately preceding such Interest
Determination Date as published under the caption "The Office of Thrift
Supervision National and 11th District Cost of Funds" under the column heading
"11th" on Telerate Page 7058 (as defined below) as of 11:00 a.m., San
Francisco time, on such Interest Determination Date. If such rate does not
appear on Telerate Page 7058 on any Interest Determination Date, the 11th
District Cost of Funds Rate for such Interest Determination Date shall be the
monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month immediately preceding the date of such announcement. If the FHLB of San
Francisco fails to announce such rate for the calendar month immediately
preceding such Interest Determination Date, then the 11th District Cost of
Funds Rate for such Interest Determination Date will be the 11th District Cost
of Funds Rate then in effect on such Interest Determination Date.
"Telerate Page 7058" means the display page designated as page "7058" on
the Telerate Service (or such other page as may replace Telerate Page 7058 on
that service for the purpose of displaying the monthly weighted average cost
of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District).
DETERMINATION OF KENNY RATE. If the Interest Rate Basis specified on
the face hereof is the Kenny Rate, this Note will bear interest for each
Interest Reset Period at the interest rate calculated with reference to the
Kenny Rate and the Spread or Spread Multiplier, if any, specified below.
"Kenny Rate" means, with respect to any Interest Determination Date, the
high grade weekly index (the "Weekly Index") on that day made available by
Kenny Information Systems ("Kenny") to the Calculation Agent. The Weekly
Index is, and shall be, based upon 30 day yield evaluations at par of bonds,
the interest on which is exempt from Federal income taxation under the
Internal Revenue Code of 1986, as amended (the "Code"), of not less than five
high grade component issuers selected by Kenny, which shall include, without
limitation, issuers of general obligation bonds. The specific issuers
included among the component issuers may be changed from time to time by Kenny
in its discretion. The bonds on which the Weekly Index is based shall not
include any bonds on which the interest is subject to a minimum tax or similar
tax under the Code, unless all tax-exempt bonds are subject to such tax. In
the event Kenny ceases to make available such Weekly Index prior to the
Calculation Date, a successor indexing agent will be selected by the
Calculation Agent, such index to reflect the prevailing rate for bonds rated
in the highest short-term rating category by Moody's Investors Service, Inc.
and Standard & Poor's Corporation in respect of issuers most closely
resembling the high grade component issuers selected by Kenny for its Weekly
Index, the interest on which is (a) variable on a weekly basis, (b) exempt
from Federal income taxation under the Code, and (c) not subject to a minimum
tax or similar tax under the Code, unless all tax-exempt bonds are subject to
such tax. If such successor indexing agent is not available, the rate for any
Interest Determination Date shall be 67% of the rate that would have been
determined if the Treasury Rate option had been originally selected as the
interest rate basis for the Notes.
DETERMINATION OF LIBOR. If the Interest Rate Basis specified on the
face hereof is LIBOR, this Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to LIBOR and the Spread
or Spread Multiplier, if any, specified below.
"LIBOR" will be determined by the Calculation Agent in accordance with
the following provisions:
(i) With respect to any Interest Determination Date, LIBOR will be
determined as follows: (A) if the method of calculation of LIBOR for a
LIBOR Note is specified on the face hereof to be "LIBOR-Telerate" or if
no method of calculation of LIBOR is specified, LIBOR for such Interest
Determination Date will be the rate for deposits in the Designated LIBOR
Currency (as defined below) having the Index Maturity specified on the
face hereof which appears on Telerate Page 3750 (as defined below) as of
11:00 a.m., London time, on such Interest Determination Date, or (B) if
the method of calculation of LIBOR for a LIBOR Note is specified on the
face hereof to be "LIBOR-Reuters," LIBOR for such Interest Determination
Date will be determined on the basis of the offered rates for deposits
in the Designated LIBOR Currency having the Index Maturity designated on
the face hereof, commencing on the second London Business Day
immediately following such Interest Determination Date, which appear on
the Reuters Screen LIBO Page (as defined below) as of 11:00 a.m., London
time, on such Interest Determination Date. If at least two such offered
rates appear on the Reuters Screen LIBO Page, the rate in respect of
that Interest Determination Date will be the arithmetic mean of such
offered rates as determined by the Calculation Agent. If such rate does
not appear on Telerate Page 3750, in the case of alternative (A) above,
or fewer than two offered rates appear, in the case of alternative (B)
above, the rate for such Interest Determination Date will be determined
as if the parties had specified the rate described in (ii) below.
"Designated LIBOR Currency" means the currency, if any, designated
on the face hereof in Other Provisions as the Designated LIBOR Currency
and, if no currency is so designated, the Designated LIBOR Currency will
be U.S. dollars.
"Telerate Page 3750" means the display designated as page "3750"
on the Telerate Service (or such other page as may replace Telerate Page
3750 on that service for the purpose of displaying London interbank
offered rates).
"Reuters Screen LIBO Page" means the display designated as Page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as
may replace the LIBO page on that service for the purpose of displaying
London interbank offered rates).
(ii) With respect to any Interest Determination Date on which the rate
for deposits does not appear on Telerate Page 3750, or on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as
applicable and as specified in (i) above, LIBOR will be determined on
the basis of the rates at which deposits in the Designated LIBOR
Currency are offered by four major banks in the London interbank market
selected by the Calculation Agent at approximately 11:00 a.m., London
time, on such Interest Determination Date to prime banks in the London
interbank market having the Index Maturity designated on the face hereof
commencing on the second London Business Day immediately following such
Interest Determination Date and in a principal amount equal to an amount
of not less than U.S. $1 million, or its equivalent in the Designated
LIBOR Currency, 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 banks to provide a quotation of its rate.
If at least two such quotations are provided, LIBOR in respect of such
Interest Determination Date will be the arithmetic mean (rounded
upwards, if necessary, to the nearest one-sixteenth of a percent) of
such quotations. If fewer than two quotations are provided, LIBOR in
respect of such Interest Determination Date will be the arithmetic mean
of the rates quoted at approximately 11:00 a.m. in the applicable
Principal Financial Center on such Interest Determination Date by three
major banks in such Principal Financial Center, selected by the
Calculation Agent, for loans in the Designated LIBOR Currency to leading
banks, commencing on the second London Business Day immediately
following such Interest Determination Date, having the Index Maturity
designated on the face hereof and in a principal amount equal to an
amount of not less than U.S. $1 million, or its equivalent in the
Designated LIBOR Currency, that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR will be LIBOR in effect on such
Interest Determination Date.
"Principal Financial Center" means, unless otherwise specified on
the face hereof, (i) the capital city of the country issuing the
Specified Currency (except as described in the definition of Business
Day with respect to ECU) or (ii) the capital city of the country to
which the Designated LIBOR Currency relates (or, in the case of ECU,
Luxembourg), as applicable, except, in the case of (i) or (ii) above,
that with respect to United States dollars, Australian dollars, Canadian
dollars, Deutsche marks, Dutch guilders, Italian lire and Swiss francs,
the "Principal Financial Center" shall be The City of New York, Sydney,
Toronto, Frankfurt, Amsterdam, Milan (solely in the case of the
Specified Currency) and Zurich, respectively.
DETERMINATION OF PRIME RATE. If the Interest Rate Basis specified on
the face hereof is the Prime Rate, this Note will bear interest at the
interest rate calculated with reference to the Prime Rate and the Spread or
Spread Multiplier, if any, specified below.
"Prime Rate" means, with respect to any Interest Determination Date, the
rate published for that day on Telerate Page 125 (as defined below) or, if not
so published by 3:00 p.m., New York City time, on such Interest Determination
Date, the rate on that day published in Statistical Release H.15(519) under
the heading "Bank Prime Loan" or, if not so published prior to 9:00 a.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Prime Rate with respect to such Interest Determination
Date 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 rate as in effect for such
Interest Determination Date. If fewer than four such rates appear on the
Reuters Screen USPRIME1 Page for any Interest Determination Date, the Prime
Rate with respect to such Interest Determination Date will be the arithmetic
mean of the prime rates quoted on the basis of the actual number of days in
the year divided by 360 as of the close of business on such Interest
Determination Date by at least two of the three major money center banks in
The City of New York selected by the Calculation Agent. If fewer than two
quotations are provided, the Prime Rate with respect to such Interest
Determination Date shall be determined on the basis of the rates furnished in
The City of New York 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 million
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 appropriate number of substitute banks or trust companies
selected as aforesaid are not quoting as mentioned in this sentence, the Prime
Rate with respect to such Interest Determination Date will be the Prime Rate
in effect immediately prior to such Interest Determination Date.
"Telerate Page 125" means the display page designated as page "125" on
the Telerate Service (or such other page as may replace Telerate Page 125 on
that service for the purpose of displaying the prime rate or base lending rate
of major banks).
"Reuters Screen USPRIME1 Page" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rate Service (or such other page as
may replace the USPRIME1 Page on that service for the purpose of displaying
the prime rate or base lending rate of major banks).
DETERMINATION OF TREASURY RATE. If the Interest Rate Basis specified on
the face hereof is the Treasury Rate, this Note will bear interest at the
interest rate calculated with reference to the Treasury Rate and the Spread or
Spread Multiplier, if any, specified below.
"Treasury Rate" means, with respect to any Interest Determination Date,
the rate on that day published on the Designated Treasury Telerate Page (as
defined below) under the column "Avge Invest Yield" under the heading "US
Treasury 3Mo T-Bill Auction Results," if the Designated Treasury Telerate Page
is 56 , or under the heading "US Treasury 6Mo T-Bill Auction Results," if the
Designated Treasury Telerate Page is 57, and having the Index Maturity
designated on the face hereof or, if not so published by 3:00 p.m., New York
City time, on such Interest Determination Date, the rate for the auction held
on such Interest Determination Date of direct obligations of the United States
("Treasury bills") having the Index Maturity designated in the applicable
Pricing Supplement as published in Statistical Release H.15(519) under the
heading "Treasury bills auction average" (expressed as a bond equivalent,
rounded to the nearest one-hundredth of a percent, with five one-thousandths
of a percent rounded upwards, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) or, if not so published by 9:00
a.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the auction average rate (expressed as a bond equivalent,
rounded to the nearest one-hundredth of a percent, with five one-thousandths
of a percent rounded upwards, on the basis of a year of 365 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 results of the
auction of Treasury bills having the Index Maturity designated on the face
hereof are not published or reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date or if no such auction is held on such
Interest Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, rounded to the nearest one-hundredth of a percent, with five
one-thousandths of a percent rounded upwards, 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 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 on the face hereof; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate will be the Treasury Rate in effect on such
Interest Determination Date.
"Designated Treasury Telerate Page" means the display designated as page
"56" or "57" on the Telerate Service, as specified on the face hereof (or any
other page as may replace such page on that service for the purpose of
displaying U.S. Treasury auction results as published in Statistical Release
H.15(519)); provided, however, that if no such page is so specified on the
face hereof, the Designated Treasury Telerate Page shall be "56" for the most
recent week.
4. If the Specified Currency indicated on the face hereof is other than
U.S. dollars, this Note is a "Foreign Currency Note" and the following
provisions in this Section 4 shall apply notwithstanding any other provisions
in this Note or in the Indenture. The principal amount of any Foreign
Currency Note payable in a Specified Currency at any time outstanding for any
purpose under the Indenture shall be deemed to be the U.S. dollar equivalent
of the principal amount of such Foreign Currency Note, determined as of the
date of the original issuance of such Foreign Currency Note by reference to
the Market Exchange Rate. Foreign Currency Notes will be issued only in
registered form without coupons.
Principal, interest and premium, if any, payments on Foreign Currency
Notes are payable by the Company in the Specified Currency. However, except
as provided below, the Exchange Rate Agent appointed by the Company to convert
principal, interest and premium, if any, payments in respect of Foreign
Currency Notes to U.S. dollars will convert the amount of all payments of
principal of, and interest and premium (if any) on, Foreign Currency Notes to
U.S. dollars. Unless otherwise specified on the face hereof, if this is a
Foreign Currency Note, the Holder hereof may, however, elect to receive such
payments in the Specified Currency as described below.
Any U.S. dollar amount to be received by a holder of a Foreign Currency
Note will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second Business Day preceding the applicable Interest Payment
Date from three recognized foreign exchange dealers (one of which may be the
Exchange Rate Agent) for the purchase by the quoting dealer of the Specified
Currency for U.S. dollars for settlement on such Interest Payment Date, in an
amount equal to the aggregate amount of the Specified Currency payable to all
holders of Notes not electing to receive the Specified Currency on such
Interest Payment Date and at which the applicable dealer commits to execute a
contract. If such bid quotations are not available, payments will be made in
the Specified Currency. All currency exchange costs will be borne by the
holder of the Foreign Currency Note by deductions from such payments.
Unless otherwise specified on the face hereof, if this is a Foreign
Currency Note, the Holder hereof may elect to receive payment of the principal
of, and interest and premium (if any) on, this Note in the Specified Currency
by transmitting a written request for such payment to the principal offices of
the Paying Agent prior to the Record Date immediately preceding any Interest
Payment Date and at least 10 Business Days prior to Maturity in the case of
payments to be made upon Maturity. Such request may be in writing (mailed or
hand delivered) or by cable, telex, or other form of facsimile transmission.
Such Holder may elect to receive payment in the Specified Currency for all
payments of principal, interest and premium, if any, and need not file a
separate election for each payment. Such election will remain in effect until
revoked by written notice to the Paying Agent, but written notice of any such
revocation must be received by the Paying Agent on or prior to the fifth
Business Day after the Record Date in the case of any payment of interest or
at least 10 Business Days prior to Maturity in the case of the payment of
principal and premium, if any.
Unless otherwise specified on the face hereof, the payment of the
principal of, and interest and premium, if any, on each Foreign Currency Note
to be made in U.S. dollars will be made in the manner specified under Section
3.A. or 3.B. (as applicable) above. Unless otherwise specified on the face
hereof, the payment of principal of, and interest and premium, if any, on each
Foreign Currency Note to be made in the Specified Currency will be made as set
forth below. If this is a Foreign Currency Note, the payment of interest
(other than interest payable to the Holder hereof, if any, upon Maturity) to
be made in the Specified Currency will be paid by bank draft mailed to the
person in whose name this Note is registered at the close of business on the
applicable Record Date. If this is a Foreign Currency Note, the principal of
and premium, if any, on this Note and any interest payable to the Holder
thereof when the principal of this Note is payable will be paid by bank draft
upon surrender of this Note at the corporate trust office of the Paying Agent
in the Borough of Manhattan, The City of New York. Specified Currency drafts
will be drawn on a bank office located outside the United States. If the
Paying Agent receives a written request from the Holder of the equivalent of
U.S. $1,000,000 or more in aggregate principal amount of the Notes not later
than the close of business on a Record Date for an interest payment or the
fifteenth day prior to Maturity, the Paying Agent will, subject to applicable
laws and regulations, until it receives notice to the contrary (but, in the
case of payments to be made upon Maturity, only after the surrender of the
Note or Notes in the Borough of Manhattan, The City of New York, not later
than one Business Day prior to Maturity), make all Specified Currency payments
to such Holder by wire transfer to an account (a) designated in such written
request and (b) maintained in the country of the Specified Currency.
If this is a Foreign Currency Note and the Specified Currency is not
available for the payment of principal of, and interest and premium, if any,
on, this Note due to the imposition of exchange controls or other
circumstances beyond the control of the Company, or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public authorities of or within the international banking
community, the Company will be entitled to satisfy its obligations to the
Holder hereof by making such payment in U.S. dollars on the basis of the noon
buying rate in The City of New York for cable transfers of the Specified
Currency as certified for customs purposes by the Federal Reserve Bank of New
York (the "Market Exchange Rate") on the Record Date prior to such payment, or
if such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. Any payment made under such circumstances in U.S. dollars where
required payment is in a Specified Currency will not constitute a default
under the Indenture or this Note.
If this is a Foreign Currency Note and payment 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, all payments due on that date with respect to this
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 Paying Agent
shall determine the U.S. dollar equivalent of each of the Components on the
basis of the most recently available Market Exchange Rate, or as otherwise
specified on the face hereof. 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 multiplied or divided 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 by the Exchange Rate Agent or
Paying Agent shall be at its sole discretion (except to the extent expressly
provided herein that any determination is subject to approval by the Company)
and, in the absence of manifest error, shall be conclusive for all purposes
and binding on the Holder hereof and the Exchange Rate Agent or Paying Agent,
as the case may be, shall have no liability therefor. Any payment made in
U.S. dollars under the aforementioned circumstances where required payment is
in a Specified Currency will not constitute a default under the Indenture or
this Note.
5. In case an Event of Default with respect to the Notes shall have
occurred and be continuing, the principal hereof may be declared due and
payable in the manner and with the effect provided in the Indenture. If the
principal of any Original Issue Discount Note is declared to be due and
payable, the amount of principal due and payable with respect to such Note
shall be limited to the sum of the aggregate principal amount of such Note
multiplied by the Issue Price(expressed as a percentage of the aggregate
principal amount) indicated on the face hereof plus the original issue
discount accrued from the Original Issue Date indicated on the face hereof but
excluding the date of acceleration, which accrual shall be calculated using
the"interest method" (computed in accordance with generally accepted
accounting principles) in effect on the date of acceleration.
6. The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities under the
Indenture at any time by the Company with the consent of the Holders of 66
2/3% in aggregate principal amount of the Securities at the time Outstanding,
as defined in the Indenture, of each series of Securities to be affected
thereby. The Indenture also contains provisions permitting the Holder of
specified percentages in aggregate principal amount of the Securities of any
series at the time Outstanding, as defined in the Indenture, on behalf of the
Holders of all the Securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences with respect to such series. 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 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
used in this paragraph the term "principal amount" means in the case of any
Original Issue Discount Note the amount that would then be due and payable
upon acceleration of the Maturity thereof, as specified in this Note.
7. No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Note at the times, place and rate, and in the Specified
Currency, herein prescribed.
8. As provided in the Indenture and subject to certain limitations
therein set forth, this Note is transferable on the Securities Register of the
Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company to be maintained for that purpose in the
Borough of Manhattan, The City of New York, or at such additional offices or
agencies maintained for such purpose as the Company may from time to time
designate, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of like terms, provisions, and tenor,
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
9. The Notes are issuable only in registered form without coupons and,
unless otherwise specified on the face hereof, in minimum denominations of
$1,000 and in integral multiples of $1,000 for any amount in excess of the
minimum denomination. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of like terms, provisions and tenor and of different
authorized denominations, as requested by the Holder surrendering the same.
10. No service charge shall be made for any such transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with the registration of such
transfer or exchange, other than certain exchanges not involving any transfer.
11. Certain terms used in this Note which are defined in the Indenture
and not otherwise defined herein have the meanings set forth in the Indenture.
12. THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
13. The Company, the Trustee and any agent of the Company 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 be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
<PAGE>
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
Please Insert Social Security or other Identifying Number of Assignee
___________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND INCLUDING POSTAL ZIP CODE ADDRESS OF
ASSIGNEE
___________________________________________
the within Note of ASSOCIATES CORPORATION OF NORTH AMERICA and all rights
thereunder, hereby does irrevocably constitute and appoint
___________________________________________, Attorney, to transfer the said
Note on the books of the Company, with full power of substitution in the
premises.
Dated: _____________________________________
NOTICE: The signature to
this assignment must
correspond with the name
as written upon the
face of the Note in
every particular without
alteration or
enlargement or any
change whatever.
<PAGE>
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL 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 OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) 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 DEPOSITORY TRUST COMPANY 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.
Registered No. R-
CUSIP
ASSOCIATES CORPORATION OF NORTH AMERICA
MEDIUM TERM SUBORDINATED NOTE, SERIES A
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "INTEREST ACCRUAL PERIOD/OID" AND
"YIELD TO MATURITY" SET FORTH BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES
OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT("OID") RULES.
<TABLE>
<C> <C>
Floating Rate Note Fixed Rate Note
Principal Amount: Interest Rate:
(if a Fixed Rate Note)
Original Issue Date: Maturity Date:
Interest Payment Dates: Total Amount of OID:
Interest Accrual Date: Initial Accrual Period\OID:
Issue Price: Yield to Maturity:
Specified Currency:
Optional Redemption: Optional Repayment:
Yes, see Other Provisions Yes, see Other Provisions
No No
Optional Reset Dates: Optional Extension of Maturity:
Yes, see Other Provisions Yes, see Other Provisions
No No
Amortizing Note: Zero Coupon Note:
Yes, see Other Provisions Yes, see Other Provisions
No No
</TABLE>
<PAGE>
<TABLE>
Only applicable if this is a Floating Rate Note:
<C> <C>
Initial Interest Rate: Spread (plus or minus):
Interest Rate Basis: Spread Multiplier:
Index Maturity: Maximum Interest Rate:
Interest Payment Period: Minimum Interest Rate:
Interest Reset Period: Lock-out Rate:
(if daily or weekly reset)
Interest Reset Dates: Lock-out Period: (if daily or weekly reset)
Interest Determination Dates:
Other Provisions:
/TABLE
<PAGE>
Associates Corporation of North America, a Delaware corporation
(herein
called the "Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to CEDE&Co. or registered assigns, the principal amount of
_________________________________________________________ on the "Maturity
Date", as specified above, or earlier if and to the extent so provided herein,
and to pay interest thereon (and premium, if any), as described on the reverse
hereof.
Payment of the principal of (and premium, if any) and interest on this
Note due at Maturity will be made, upon presentation of this Note, in
immediately available funds, the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, or at such
additional offices or agencies maintained for such purpose as the Company may
from time to time designate, in such coin or currency as at the time of
payment is legal tender for debts in the Specified Currency indicated on the
face hereof; provided, however, that at the option of the Company payment of
interest other than at Maturity may be made by wire transfer or (subject to
collection) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Securities Register. Except as may be
otherwise provided above, if the Specified Currency shown above is other than
U.S. dollars (a "Foreign Currency Note"), the Company will arrange to convert
all payments in respect hereof into U.S. dollars in the manner described
below, unless otherwise notified in accordance with the provisions set forth
below.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH BELOW AND IN ANY PRICING SUPPLEMENT ATTACHED HERETO AND INCORPORATED
HEREIN, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT
AS IF SET FORTH AT THIS PLACE. IN THE EVENT A PRICING SUPPLEMENT IS
INCORPORATED AS PART OF THE TERMS OF THIS NOTE, IF THE PROVISIONS OF THE
PRICING SUPPLEMENT CONTRADICT OR ARE INCONSISTENT WITH THE TERMS SET
FORTH ON THE REVERSE HEREOF, THE PROVISIONS CONTAINED IN THE PRICING
SUPPLEMENT SHALL GOVERN.
The payment of principal and interest on this Note is expressly
subordinated, as provided in the Indenture, to the payment of all Superior
Indebtedness, as defined in the Indenture, of the Company, and by the
acceptance of this Note the Holder hereof agrees expressly for the benefit of
present and future holders of such Superior Indebtedness to be bound by the
provisions of the Indenture. Reference is hereby made to the further
provisions of this Note set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been manually
executed by or on behalf of the Trustee referred to on the reverse hereof by
manual signature, this Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
ASSOCIATES CORPORATION
OF NORTH AMERICA [SEAL]
___________________________
BY: [ ]
TITLE: [ ]
ATTEST:
___________________________
BY: [ ]
TITLE: Assistant Secretary<PAGE>
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities of the series provided for under the
within-mentioned Indenture.
The Chase Manhattan Bank
as Trustee
___________________________
Authorized Officer
<PAGE>
ASSOCIATES CORPORATION OF NORTH AMERICA
MEDIUM TERM SUBORDINATED NOTE, SERIES A
1. This Note is one of a duly authorized issue of unsecured debentures,
notes or other evidences of indebtedness (hereinafter called the "Securities")
of the Company of the series specified above (the "Notes"), all such
Securities issued and to be issued under an indenture dated as of November 1,
1995 (the"Indenture") between the Company and The Chase Manhattan Bank
("Chase"), as Trustee, to which Indenture and all further indentures
supplemental thereto reference is hereby made for a specification of the
rights and limitation of rights thereunder of the Holders of the Securities
and of the rights, obligations, duties and immunities of the Trustee and of
the Company. The series of Securities consisting of the Notes is unlimited in
aggregate principal amount. As provided in the Indenture, said Securities may
be issued in one or more series, which different series may be issued in
various principal amounts, may bear different dates and mature at different
times, may bear interest, if any, at different rates and may otherwise vary as
in the Indenture provided or permitted. The Notes may be issued at various
times in various principal amounts, may bear interest at different rates and
may otherwise vary, all as provided for in the Indenture.
Unless otherwise specified on the face hereof, the following terms have
the meanings set forth below:
"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 or required by law, regulation or executive order to
close in The City of New York and, with respect to Notes as to which
LIBOR (as defined in Section 3.B. below) is the applicable interest rate
basis, is also a London Business Day (as defined below); provided,
however, that with respect to any Specified Currency, such day is also
not a day on which banking institutions are authorized or required by
law, regulation or executive order to close in the Principal Financial
Center (as defined below) of the country of such Specified Currency (or,
in the case of European Currency Units ("ECU"), is also not a day that
appears as an ECU non-settlement day on the display designated at "ISDE"
on the Reuter Monitor Money Rates Service (or is not a day designated as
an ECU non-settlement day by the ECU Banking Association in Paris) or,
if ECU non-settlement days do not appear on that page (and are not so
designated), a day that is not a day on which payments in ECU cannot be
settled in the international interbank market).
"Calculation Agent" means, unless otherwise specified on the face
hereof, Chase acting in the capacity of calculation agent if this is a
Floating Rate Note and, where applicable, certain other Notes. The
Company may at any time designate additional Calculation Agents or
rescind the designation of Calculation Agents.
"Calculation Date" means the date by which interest payable on any
Interest Payment Date or upon Maturity, as the case may be, is
calculated. Unless otherwise specified on the face hereof, the
Calculation Date, where applicable, pertaining to an 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 or (ii) the Business Day
preceding the applicable Interest Payment Date or date of Maturity, as
the case may be.
"Exchange Rate Agent" means, unless otherwise specified on the
face hereof, Chase acting in the capacity of exchange rate agent if this
is a Foreign Currency Note.
"Index Maturity" means, if this is a Floating Rate Note, the
designated maturity of the instrument(s) or obligation(s) on which the
interest rate is based, as specified on the face hereof.
"Interest Determination Date" means, for any Interest Reset Date
(as specified on the face hereof, or if not so specified, as defined in
Section 3.B. below) if this is a Floating Rate Note, the date for
determining the rate of interest that will take effect on such Interest
Reset Date. Unless otherwise specified on the face hereof, the Interest
Determination Date will be as described under Section 3.B. below.
"Interest Payment Date" means each date specified on the face
hereof (other than at Maturity) on which, under the terms of this Note,
interest is payable.
"Lockout Period" means, if this is a Floating Rate Note which
resets daily or weekly, unless otherwise specified on the face hereof, a
period of two Business Days immediately prior to each Interest Payment
Date and prior to Maturity during which the Lockout Rate will be in
effect.
"Lockout Rate" means, if this is a Floating Rate Note, the
interest rate in effect on the first day of the Lockout Period and
remaining in effect during the Lockout Period.
"London Business Day" means any day (a) if the Designated LIBOR
Currency (as defined below) is other than the ECU, on which dealings in
deposits in such Designated LIBOR Currency are transacted in the London
interbank market or (b) if the Designated LIBOR Currency is the ECU,
that is not designated as an ECU Non-Settlement Day by the ECU Banking
Association in Paris or otherwise generally regarded in the ECU
interbank market as a day on which payments on ECUs shall not be made.
"Maturity" means (i) the date on which the principal of this Note
becomes due and payable or (ii) in the case of Amortizing Notes, the
date on which all remaining unpaid principal becomes due and payable, in
any case, in accordance with its terms, whether at its Maturity Date or
by declaration of acceleration, call for redemption, put for repayment
or otherwise.
"Maturity Date" means the date on which this Note will mature, as
specified on the face hereof.
"Paying Agent" means, unless otherwise specified on the face
hereof, Chase acting in the capacity of paying agent with regard to the
Notes. The Company may at any time designate additional Paying Agents
or rescind the designation of Paying Agents or approve a change in the
office through which the Paying Agent acts.
"Record Date" means, unless otherwise specified on the face
hereof, the date (whether or not a Business Day) that is 15 days prior
to the applicable Interest Payment Date.
Unless otherwise specified on the face hereof, if this Note is a
Floating Rate Note, all percentages resulting from any calculation of interest
on this Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percent (.0000001), with five-millionths of
a percentage point
rounded upward (e.g., 9.876545% (or .09876545) would be rounded to 9.87655%
(or .0987655)), and all U.S. dollar amounts used in or resulting from such
calculation on this Note, if a Floating Rate Note, will be rounded to the
nearest cent or, if the Specified Currency is payable in other than U.S.
dollars, the smallest whole unit of the Specified Currency (with one-half cent
or unit being rounded upwards).
2. Neither this Note nor the Notes are redeemable or repayable in full
or in part prior to its Maturity Date or subject to any sinking fund
provisions unless any such redemption, repayment or sinking fund provisions
are stated on the face hereof or on the face of any of the other Notes, as the
case may be, and then only under such terms as may be so stated there. Any
required notice of redemption, repayment or sinking fund payments shall be
given only to the Registered Holders of Notes which bear provisions for such
required redemption, repayment or sinking fund payments, as the case may be.
3.A. If this is a Fixed Rate Note, unless it is also a Zero-Coupon
Note, the Company promises to pay interest on the principal amount at the
Interest Rate specified on the face hereof from and including the Original
Issue Date specified on the face hereof, or from and including the most recent
Interest Payment Date to which interest has been paid or duly provided for,
to, but excluding, the applicable Interest Payment Date or the date of
Maturity, as the case may be, until the principal hereof is paid or made
available for payment. If this is a Fixed Rate Note, interest will be
payable, unless otherwise specified on the face hereof, in consecutive
semi-annual payments on May 1 and November 1 of each year and at Maturity
commencing on the May 1 or November 1 next succeeding such Original Issue
Date; provided, however, that if such Original Issue Date occurs either
between a Regular Record Date (defined herein below) and the next succeeding
Interest Payment Date or on an Interest Payment Date, interest payments will
commence on the Interest Payment Date following the next succeeding Regular
Record Date (defined herein below). Interest shall be computed on the basis
of a 360-day year consisting of twelve 30-day months. If this is a Fixed Rate
Note, and an Interest Payment Date or the date of Maturity 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 shall accrue on
the amount so payable for the period from and after the Interest Payment Date
or the date of Maturity, as the case may be. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in said Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business 15 calendar days prior to the Interest
Payment Date (the "Regular Record Date") next preceding such Interest Payment
Date; provided, however, that the interest payable on the Interest Payment
Date occurring at Maturity will be payable to the Person to whom principal
shall be payable. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holder on such
Regular Record Date, and may 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 ("Special Record Date") not less than 10 days prior to
the date fixed by the Trustee for payment of such defaulted interest, notice
of which Special Record Date shall be given to Holders of Notes not less than
15 days prior to such Special Record Date. If this Note specifies that it is
an Original Issue Discount Note, the Company will pay any defaulted interest
at a rate equal to the Yield to Maturity specified on the face hereof. An
Original Issue Discount Note shall be any Note issued with original issue
discount for United States federal income tax purposes.
3.B. If this is a Floating Rate Note, the Company promises to pay
interest on the principal amount at a rate per annum equal to the Initial
Interest Rate specified on the face hereof until the first Interest Reset Date
so specified following the Original Issue Date so specified and thereafter at
a rate determined in accordance with the provisions set forth below under the
applicable heading "Determination of CD Rate," "Determination of Commercial
Paper Rate," "Determination of the CMT Rate," "Determination of Federal Funds
Rate," "Determination of the 11th District Cost of Funds Rate," "Determination
of the Kenny Rate," "Determination of LIBOR," "Determination of the Prime
Rate," "Determination of Treasury Rate," or such other Interest Rate Basis as
set forth on the face hereof, depending upon whether the Interest Rate Basis
so specified is CD Rate, Commercial Paper Rate, CMT Rate, Federal Funds Rate,
11th District Cost of Funds Rate, Kenny Rate, LIBOR, Prime Rate, Treasury Rate
or such other rate, until the principal hereof is paid or duly made available
for payment. The Company will pay interest daily, weekly, monthly, quarterly,
semi-annually or annually as specified on the face hereof under "Interest
Payment Period," commencing with the first Interest Payment Date so specified
next succeeding the Original Issue Date, and at Maturity; provided, however,
that if such Original Issue Date occurs either between a Regular Record Date
and the next succeeding Interest Payment Date or on an Interest Payment Date,
interest payments will commence on the Interest Payment Date following the
next succeeding Regular Record Date; unless otherwise provided on the face
hereof, interest will be payable: in the case of Floating Rate Notes with a
daily, weekly or monthly Interest Reset Date, on the third Wednesday of each
month or the third Wednesday of March, June, September and December, as
provided on the face hereof; with a quarterly Interest Reset Date, on the
third Wednesday of March, June, September and December of each year; with
semi-annual Interest Reset Date, on the third Wednesday of the two months
provided on the face hereof; and with an annual Interest Reset Date, on the
third Wednesday of the month provided on the face hereof, and provided
further, however, that if an Interest Payment Date would fall on a day that is
not a Business Day, such Interest Payment Date shall be postponed to the next
day that is a Business Day, except that in case the Interest Rate Basis is
LIBOR, as specified on the face hereof, if such next succeeding Business Day
falls in the next succeeding calendar month, such Interest Payment Date shall
be the immediately preceding Business Day. Except as provided on the face
hereof and in the Indenture referred to herein, interest payments will be made
on the Interest Payment Dates specified on the face hereof. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in 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; provided, however, that interest
payable at Maturity will be payable to the Person to whom principal shall be
payable. Any such interest which is payable but is not punctually paid or
duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Registered Holder hereof on such Regular Record Date, and may
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 Special Record Date
fixed by the Trustee, not less than 10 days prior to the date for payment of
such defaulted interest, notice of which Special Record Date shall be given to
the Holder hereof not less than 15 days prior to such Special Record Date, or
may be paid at any time in any other lawful manner, all as more fully provided
in the Indenture.
If this is a Floating Rate Note, the interest payable hereon on each
Interest Payment Date will include accrued interest from and including the
Original Issue Date or from and including the last Interest Payment Date to
which interest has been paid, as the case may be, to, but excluding, such
Interest Payment Date, and the interest payable at Maturity will include
accrued interest from the Original Issue Date or from the last Interest
Payment Date in respect of which interest has been paid, as the case may be,
to, but excluding, the date of Maturity. Accrued interest will be calculated
by multiplying the principal amount hereof by an accrued interest factor. This
accrued interest factor shall be computed by adding the interest factors
calculated for each day in the period for which accrued interest is being
calculated. The interest factor for each such day shall be computed by
dividing the interest rate applicable to such day by 360 if the Interest Rate
Basis is CD Rate, Commercial Paper Rate, 11th District Cost of Funds Rate,
Federal Funds Rate, LIBOR and Prime Rate, as indicated on the face hereof,
by the actual number of days in the years if the Interest Rate Basis is
Treasury Rate or CMT Rate, as indicated on the face hereof or by 365 if the
Interest Rate Basis is Kenny Rate,as indicated on the face hereof. The
interest rate in effect on each day will be (a) if such day is an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to such Interest Reset Date or (b) if such day is not an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date, subject in either case
to any Maximum or Minimum Interest Rate limitation referred to on the face
hereof and to any adjustment by a Spread or a Spread Multiplier referred to on
the face hereof; provided, however, that (i) the interest rate in effect for
the period from the Original Issue Date to the first Interest Reset Date if
this is a Floating Rate Note will be either the initial interest rate (if any)
specified on the face hereof or if no interest rate is specified, the interest
rate calculated as set forth above and (ii) if this is a Floating Rate Note
which resets daily or weekly, unless otherwise specified on the face hereof,
the interest rate in effect for the Lockout Period will be the Lockout Rate.
If this is a Floating Rate Note for which a Lockout Period so applies, the
interest rate on this Note for the period from the Interest Payment Date to
the next Interest Reset Date shall be the interest rate that would have been
in effect as of the most recent Interest Reset Date on or prior to the
Interest Payment Date had such Lockout Period not been in effect.
Notwithstanding the foregoing, the interest rate hereon shall in no event be
higher than the maximum rate permitted by New York law as the same may be
modified by United States law of general application. Commencing with the
first Interest Reset Date specified on the face hereof following the Original
Issue Date and thereafter upon each succeeding Interest Reset Date specified
on the face hereof, the rate at which interest on this Note is payable shall
be adjusted as specified on the face hereof under Interest Reset Period;
provided, however, that if any Interest Reset Date would otherwise be 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 the Interest Rate Basis is
LIBOR and such next Business Day is in the next succeeding calendar month such
Interest Reset Date shall be the immediately preceding Business Day.
The Interest Determination Date pertaining to each Interest Reset Date
for CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes,
Prime Rate Notes, CMT Rate Notes and Kenny Rate Notes will be the Business Day
next preceding such Interest Reset Date. The Interest Determination Date
pertaining to each Interest Reset Date for 11th District Cost of Funds Rate
Notes will be the day of the month immediately preceding such Interest Reset
Date on which the Federal Home Loan Bank of San Francisco publishes the Index
(as defined below). The Interest Determination Date pertaining to each
Interest Reset Date for LIBOR Notes will be the second London Business Day
preceding such Interest Reset Date. The Interest Determination Date
pertaining to each Interest Reset Date for Treasury Rate Notes 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 normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally 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 Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week.
If this is a Floating Rate Note, subject to applicable provisions of law
and except as specified herein, on each Interest Reset Date, the rate of
interest shall be the rate determined in accordance with the provisions of the
applicable Interest Rate Basis heading below.
DETERMINATION OF CD RATE. If the Interest Rate Basis specified on the
face hereof is the CD Rate, this Note will bear interest for each Interest
Reset Period at the interest rate calculated with reference to the CD Rate and
the Spread or Spread Multiplier, if any, specified below.
"CD Rate" means, with respect to any Interest Determination Date, the
rate on that day for certificates of deposit as published on Telerate Page 120
(as defined below) under the column "Certs of Deposit" under the heading
"Daily Selected Money Market Rates from the Federal Reserve Bank of New York"
and having the Index Maturity designated on the face hereof or, if not so
published by 3:00 p.m., New York City time, on such Interest Determination
Date, the CD Rate will be the rate on such date for negotiable certificates of
deposit having the Index Maturity designated on the face hereof as published
by the Board of Governors of the Federal Reserve System in "Statistical
Release H.15(519), Selected Interest Rates," or any successor publication of
the Board of Governors of the Federal Reserve System ("Statistical Release
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
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 on the face hereof as published by the Federal Reserve
Bank of New York in its daily statistical release, "Composite 3:30 p.m.
Quotations for the U.S. Government Securities" ("Composite Quotations") under
the heading "Certificates of Deposit." If such rate is not yet published by
3:00 p.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the CD Rate on such Interest Determination
Date will be calculated by the Calculation Agent and will be the arithmetic
mean of the secondary market offered rates as of 10:00 a.m., New York City
time, on such Interest Determination Date, of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in The City of New York
selected by the Calculation Agent for negotiable certificates of deposit of
major United States money center banks of the highest credit standing (in the
market for negotiable certificates of deposit) with a remaining maturity
closest to the Index Maturity designated on the face hereof 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 will be the CD Rate in effect on such Interest Determination Date.
"Telerate Page 120" means the display designated as page "120" on Dow
Jones Markets Limited or any successor service (the "Telerate Service") (or
such other page as may replace Telerate Page 120 on that service for the
purpose of displaying money market rates as published in Statistical Release
H.15(519)).
DETERMINATION OF COMMERCIAL PAPER RATE. If the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, this Note will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if
any, specified below.
"Commercial Paper Rate" means, with respect to any Interest
Determination Date, the rate on that day for commercial paper as published on
Telerate Page 133 (as defined below) under the caption "AA - Nonfinancial
Comml Paper" under the heading "Daily Commercial Paper Rates from the Federal
Reserve Board" and having the Index Maturity designated on the face hereof or,
if not so published by 3:00 p.m., New York City time on such Interest
Determination Rate, the Money Market Yield (as defined below) of the rate on
that date for commercial paper having the Index Maturity designated on the
applicable Pricing Supplement as published in Statistical Release H.15(519),
under the heading "Commercial Paper-Nonfinancial." 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, then the Commercial Paper
Rate shall be the Money Market Yield of the rate on that Interest
Determination Date for commercial paper having the Index Maturity designated
on the face hereof as published in 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 Composite Quotations, the Commercial
Paper Rate for that Interest Determination Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic mean
(rounded to the nearest one-hundredth of a percent, with five one-thousandths
of a percent rounded upwards) of the offered rates of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent as
of 11:00 a.m., New York City time, on that Interest Determination Date, for
commercial paper having the Index Maturity designated on the face hereof
placed for an industrial issuer whose bond rating is "AA", or the equivalent,
from a nationally recognized 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 will be the Commercial
Paper Rate in effect on such Interest Determination Date.
"Telerate Page 133" means the display designated as page "133" on the
Telerate Service (or such other page as may replace Telerate Page 133 on that
service for the purpose of displaying commercial paper rates as published in
Statistical Release H.15(519)).
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
Money Market Yield
=
D 360
100
360 (D M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
DETERMINATION OF CMT RATE. If the Initial Rate Basis specified on the
face hereof is the CMT Rate, this Note will bear interest for each Interest
Reset Period at the interest rate calculated with reference to the CMT Rate
and the Spread or Spread Multiplier, if any, specified below.
"CMT Rate" means, with respect to any Interest Determination Date, the
rate published on the Designated CMT Telerate Page (as defined below) under
the caption " . . . Treasury Constant Maturities . . . Federal Reserve Board
Release H.15 . . ." under the column for the Designated CMT Maturity Index (as
defined below) (i) if the Designated CMT Telerate Page is 7055, the rate on
such Interest Determination Date and (ii) if the Designated CMT Telerate Page
is 7052, the week, or the month, as applicable, ended immediately preceding
the week in which such Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page, or if not displayed by 3:00 p.m., New
York City time, on such Interest Determination Date, then the CMT Rate for
such Interest Determination Date will be the treasury constant maturity rate
for the Designated CMT Maturity Index as published in the relevant Statistical
Release H.15(519). If such rate is no longer published, or if not published
by 3:00 p.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the CMT Rate for such Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index (or other United States Treasury rate for the Designated CMT
Maturity Index) for the Interest Determination Date with respect to such
Interest Reset Date as may then be published by either the Board of Governors
of the Federal Reserve System or the United States Department of the Treasury
that the Calculation Agent determines to be comparable to the rate formerly
displayed on the Designated CMT Telerate Page and published in the relevant
Statistical Release H.15(519). If such information is not provided by 3:00
p.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the CMT Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity,
based on the arithmetic mean of the secondary market closing offer side prices
as of approximately 3:30 p.m., New York City time, on such Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity
of approximately the Designated CMT Maturity Index and a remaining term to
maturity of not less than such Designated CMT Maturity Index minus one year.
If the Calculation Agent cannot obtain three such Treasury Note quotations,
the CMT Rate for such CMT Interest Determination Date will be calculated by
the Calculation Agent and will be a yield to maturity based on the arithmetic
mean of the secondary market offer side prices as of approximately 3:30 p.m.,
New York City time, on such Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event
of equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100,000,000. If three or four (and not
five) of such Reference Dealers are quoting as mentioned above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three such Reference Dealers are quoting
as mentioned above, the CMT Rate will be the CMT Rate in effect on such
Interest Determination Date. If two Treasury Notes with an original maturity
as described in the third preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display designated as page
"7055" or "7052" on the Telerate Service, as specified on the face hereof in
Other Provisions (or any other page as may replace such page on that service
for the purpose of displaying "Treasury Constant Maturities" as published in
Statistical Release H.15(519)); provided, however, that if no such page is so
specified on the face hereof, the Designated CMT Telerate Page shall be 7052
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the Treasury Notes (either one, two, three, five, seven, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated; provided, however, that if no such maturity is so specified on the
face hereof, the Designated CMT Maturity Index shall be two years.
DETERMINATION OF FEDERAL FUNDS RATE. If the Interest Rate Basis
specified on the face hereof is the Federal Funds Rate, this Note will bear
interest for each Interest Reset Period at the interest rate calculated with
reference to the Federal Funds Rate and the Spread or Spread Multiplier, if
any, specified below.
"Federal Funds Rate" means, with respect to any Interest Determination
Date, the rate on that day for Federal Funds as published on Telerate Page 120
(as defined below) under the caption "Eff" under the column "Fed Funds
Effective" under the heading "Daily Selected Money Market Rates From The
Federal Reserve" or, if not so published by 3:00 p.m., New York City time, on
such Interest Determination Date, the Federal Funds Rate will be the rate on
such Interest Determination Date as published in Statistical Release H.15(519)
under the column "Effective Rate" under the heading "Federal Funds." If such
rate is not yet published by 3:30 p.m., New York City time, on the Calculation
Date pertaining to such Interest Determination Date, the Federal Funds Rate
for such 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 U.S. dollar Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York selected by the Calculation
Agent as of 9:00 a.m., New York City time, on such Interest Determination
Date; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate will be the Federal Funds Rate in effect on such Interest
Determination Date.
"Telerate Page 120" means the display designated as page "120" on the
Telerate Service (or such other page as may replace Telerate Page 120 on that
service for the purpose of displaying Federal Funds rates as published in
Statistical Release H.15(519)).
DETERMINATION OF 11th DISTRICT COST OF FUNDS RATE. If the Interest Rate
Basis specified on the face hereof is the 11th District Cost of Funds Rate,
this Note will bear interest for each Interest Reset Period at the interest
rate calculated with reference to the 11th District Cost of Funds Rate and the
Spread or Spread Multiplier, if any, specified below.
"11th District Cost of Funds Rate" means, with respect to any Interest
Determination Date, the rate on that day equal to the monthly weighted average
cost of funds for the calendar month immediately preceding such Interest
Determination Date as published under the caption "The Office of Thrift
Supervision National and 11th District Cost of Funds" under the column heading
"11th" on Telerate Page 7058 (as defined below) as of 11:00 a.m., San
Francisco time, on such Interest Determination Date. If such rate does not
appear on Telerate Page 7058 on any Interest Determination Date, the 11th
District Cost of Funds Rate for such Interest Determination Date shall be the
monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month immediately preceding the date of such announcement. If the FHLB of San
Francisco fails to announce such rate for the calendar month immediately
preceding such Interest Determination Date, then the 11th District Cost of
Funds Rate for such Interest Determination Date will be the 11th District Cost
of Funds Rate then in effect on such Interest Determination Date.
"Telerate Page 7058" means the display page designated as page "7058" on
the Telerate Service (or such other page as may replace Telerate Page 7058 on
that service for the purpose of displaying the monthly weighted average cost
of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District).
DETERMINATION OF KENNY RATE. If the Interest Rate Basis specified on
the face hereof is the Kenny Rate, this Note will bear interest for each
Interest Reset Period at the interest rate calculated with reference to the
Kenny Rate and the Spread or Spread Multiplier, if any, specified below.
"Kenny Rate" means, with respect to any Interest Determination Date, the
high grade weekly index (the "Weekly Index") on that day made available by
Kenny Information Systems ("Kenny") to the Calculation Agent. The Weekly
Index is, and shall be, based upon 30 day yield evaluations at par of bonds,
the interest on which is exempt from Federal income taxation under the
Internal Revenue Code of 1986, as amended (the "Code"), of not less than five
high grade component issuers selected by Kenny, which shall include, without
limitation, issuers of general obligation bonds. The specific issuers
included among the component issuers may be changed from time to time by Kenny
in its discretion. The bonds on which the Weekly Index is based shall not
include any bonds on which the interest is subject to a minimum tax or similar
tax under the Code, unless all tax-exempt bonds are subject to such tax. In
the event Kenny ceases to make available such Weekly Index prior to the
Calculation Date, a successor indexing agent will be selected by the
Calculation Agent, such index to reflect the prevailing rate for bonds rated
in the highest short-term rating category by Moody's Investors Service, Inc.
and Standard & Poor's Corporation in respect of issuers most closely
resembling the high grade component issuers selected by Kenny for its Weekly
Index, the interest on which is (a) variable on a weekly basis, (b) exempt
from Federal income taxation under the Code, and (c) not subject to a minimum
tax or similar tax under the Code, unless all tax-exempt bonds are subject to
such tax. If such successor indexing agent is not available, the rate for any
Interest Determination Date shall be 67% of the rate that would have been
determined if the Treasury Rate option had been originally selected as the
interest rate basis for the Notes.
DETERMINATION OF LIBOR. If the Interest Rate Basis specified on the
face hereof is LIBOR, this Note will bear interest for each Interest Reset
Period at the interest rate calculated with reference to LIBOR and the Spread
or Spread Multiplier, if any, specified below.
"LIBOR" will be determined by the Calculation Agent in accordance with
the following provisions:
(i) With respect to any Interest Determination Date, LIBOR will be
determined as follows: (A) if the method of calculation of LIBOR for a
LIBOR Note is specified on the face hereof to be "LIBOR-Telerate" or if
no method of calculation of LIBOR is specified, LIBOR for such Interest
Determination Date will be the rate for deposits in the Designated LIBOR
Currency (as defined below) having the Index Maturity specified on the
face hereof which appears on Telerate Page 3750 (as defined below) as of
11:00 a.m., London time, on such Interest Determination Date, or (B) if
the method of calculation of LIBOR for a LIBOR Note is specified on the
face hereof to be "LIBOR-Reuters," LIBOR for such Interest Determination
Date will be determined on the basis of the offered rates for deposits
in the Designated LIBOR Currency having the Index Maturity designated on
the face hereof, commencing on the second London Business Day
immediately following such Interest Determination Date, which appear on
the Reuters Screen LIBO Page (as defined below) as of 11:00 a.m., London
time, on such Interest Determination Date. If at least two such offered
rates appear on the Reuters Screen LIBO Page, the rate in respect of
that Interest Determination Date will be the arithmetic mean of such
offered rates as determined by the Calculation Agent. If such rate does
not appear on Telerate Page 3750, in the case of alternative (A) above,
or fewer than two offered rates appear, in the case of alternative (B)
above, the rate for such Interest Determination Date will be determined
as if the parties had specified the rate described in (ii) below.
"Designated LIBOR Currency" means the currency, if any, designated
on the face hereof in Other Provisions as the Designated LIBOR Currency
and, if no currency is so designated, the Designated LIBOR Currency will
be U.S. dollars.
"Telerate Page 3750" means the display designated as page "3750"
on the Telerate Service (or such other page as may replace Telerate Page
3750 on that service for the purpose of displaying London interbank
offered rates).
"Reuters Screen LIBO Page" means the display designated as Page
"LIBO" on the Reuters Monitor Money Rates Service (or such other page as
may replace the LIBO page on that service for the purpose of displaying
London interbank offered rates).
(ii) With respect to any Interest Determination Date on which the rate
for deposits does not appear on Telerate Page 3750, or on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as
applicable and as specified in (i) above, LIBOR will be determined on
the basis of the rates at which deposits in the Designated LIBOR
Currency are offered by four major banks in the London interbank market
selected by the Calculation Agent at approximately 11:00 a.m., London
time, on such Interest Determination Date to prime banks in the London
interbank market having the Index Maturity designated on the face hereof
commencing on the second London Business Day immediately following such
Interest Determination Date and in a principal amount equal to an amount
of not less than U.S. $1 million, or its equivalent in the Designated
LIBOR Currency, 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 banks to provide a quotation of its rate.
If at least two such quotations are provided, LIBOR in respect of such
Interest Determination Date will be the arithmetic mean (rounded
upwards, if necessary, to the nearest one-sixteenth of a percent) of
such quotations. If fewer than two quotations are provided, LIBOR in
respect of such Interest Determination Date will be the arithmetic mean
of the rates quoted at approximately 11:00 a.m. in the applicable
Principal Financial Center on such Interest Determination Date by three
major banks in such Principal Financial Center, selected by the
Calculation Agent, for loans in the Designated LIBOR Currency to leading
banks, commencing on the second London Business Day immediately
following such Interest Determination Date, having the Index Maturity
designated on the face hereof and in a principal amount equal to an
amount of not less than U.S. $1 million, or its equivalent in the
Designated LIBOR Currency, that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR will be LIBOR in effect on such
Interest Determination Date.
"Principal Financial Center" means, unless otherwise specified on
the face hereof, (i) the capital city of the country issuing the
Specified Currency (except as described in the definition of Business
Day with respect to ECU) or (ii) the capital city of the country to
which the Designated LIBOR Currency relates (or, in the case of ECU,
Luxembourg), as applicable, except, in the case of (i) or (ii) above,
that with respect to United States dollars, Australian dollars, Canadian
dollars, Deutsche marks, Dutch guilders, Italian lire and Swiss francs,
the "Principal Financial Center" shall be The City of New York, Sydney,
Toronto, Frankfurt, Amsterdam, Milan (solely in the case of the
Specified Currency) and Zurich, respectively.
DETERMINATION OF PRIME RATE. If the Interest Rate Basis specified on
the face hereof is the Prime Rate, this Note will bear interest at the
interest rate calculated with reference to the Prime Rate and the Spread or
Spread Multiplier, if any, specified below.
"Prime Rate" means, with respect to any Interest Determination Date, the
rate published for that day on Telerate Page 125 (as defined below) or, if not
so published by 3:00 p.m., New York City time, on such Interest Determination
Date, the rate on that day published in Statistical Release H.15(519) under
the heading "Bank Prime Loan" or, if not so published prior to 9:00 a.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Prime Rate with respect to such Interest Determination
Date 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 rate as in effect for such
Interest Determination Date. If fewer than four such rates appear on the
Reuters Screen USPRIME1 Page for any Interest Determination Date, the Prime
Rate with respect to such Interest Determination Date will be the arithmetic
mean of the prime rates quoted on the basis of the actual number of days in
the year divided by 360 as of the close of business on such Interest
Determination Date by at least two of the three major money center banks in
The City of New York selected by the Calculation Agent. If fewer than two
quotations are provided, the Prime Rate with respect to such Interest
Determination Date shall be determined on the basis of the rates furnished in
The City of New York 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 million
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 appropriate number of substitute banks or trust companies
selected as aforesaid are not quoting as mentioned in this sentence, the Prime
Rate with respect to such Interest Determination Date will be the Prime Rate
in effect immediately prior to such Interest Determination Date.
"Telerate Page 125" means the display page designated as page "125" on
the Telerate Service (or such other page as may replace Telerate Page 125 on
that service for the purpose of displaying the prime rate or base lending rate
of major banks).
"Reuters Screen USPRIME1 Page" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rate Service (or such other page as
may replace the USPRIME1 Page on that service for the purpose of displaying
the prime rate or base lending rate of major banks).
DETERMINATION OF TREASURY RATE. If the Interest Rate Basis specified on
the face hereof is the Treasury Rate, this Note will bear interest at the
interest rate calculated with reference to the Treasury Rate and the Spread or
Spread Multiplier, if any, specified below.
"Treasury Rate" means, with respect to any Interest Determination Date,
the rate on that day published on the Designated Treasury Telerate Page (as
defined below) under the column "Avge Invest Yield" under the heading "US
Treasury 3Mo T-Bill Auction Results," if the Designated Treasury Telerate Page
is 56 , or under the heading "US Treasury 6Mo T-Bill Auction Results," if the
Designated Treasury Telerate Page is 57, and having the Index Maturity
designated on the face hereof or, if not so published by 3:00 p.m., New York
City time, on such Interest Determination Date, the rate for the auction held
on such Interest Determination Date of direct obligations of the United States
("Treasury bills") having the Index Maturity designated in the applicable
Pricing Supplement as published in Statistical Release H.15(519) under the
heading "Treasury bills auction average" (expressed as a bond equivalent,
rounded to the nearest one-hundredth of a percent, with five one-thousandths
of a percent rounded upwards, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) or, if not so published by 9:00
a.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the auction average rate (expressed as a bond equivalent,
rounded to the nearest one-hundredth of a percent, with five one-thousandths
of a percent rounded upwards, on the basis of a year of 365 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 results of the
auction of Treasury bills having the Index Maturity designated on the face
hereof are not published or reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date or if no such auction is held on such
Interest Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, rounded to the nearest one-hundredth of a percent, with five
one-thousandths of a percent rounded upwards, 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 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 on the face hereof; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate will be the Treasury Rate in effect on such
Interest Determination Date.
"Designated Treasury Telerate Page" means the display designated as page
"56" or "57" on the Telerate Service, as specified on the face hereof (or any
other page as may replace such page on that service for the purpose of
displaying U.S. Treasury auction results as published in Statistical Release
H.15(519)); provided, however, that if no such page is so specified on the
face hereof, the Designated Treasury Telerate Page shall be "56" for the most
recent week.
4. If the Specified Currency indicated on the face hereof is other than
U.S. dollars, this Note is a "Foreign Currency Note" and the following
provisions in this Section 4 shall apply notwithstanding any other provisions
in this Note or in the Indenture. The principal amount of any Foreign
Currency Note payable in a Specified Currency at any time outstanding for any
purpose under the Indenture shall be deemed to be the U.S. dollar equivalent
of the principal amount of such Foreign Currency Note, determined as of the
date of the original issuance of such Foreign Currency Note by reference to
the Market Exchange Rate. Foreign Currency Notes will be issued only in
registered form without coupons.
Principal, interest and premium, if any, payments on Foreign Currency
Notes are payable by the Company in the Specified Currency. However, except
as provided below, the Exchange Rate Agent appointed by the Company to convert
principal, interest and premium, if any, payments in respect of Foreign
Currency Notes to U.S. dollars will convert the amount of all payments of
principal of, and interest and premium (if any) on, Foreign Currency Notes to
U.S. dollars. Unless otherwise specified on the face hereof, if this is a
Foreign Currency Note, the Holder hereof may, however, elect to receive such
payments in the Specified Currency as described below.
Any U.S. dollar amount to be received by a holder of a Foreign Currency
Note will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second Business Day preceding the applicable Interest Payment
Date from three recognized foreign exchange dealers (one of which may be the
Exchange Rate Agent) for the purchase by the quoting dealer of the Specified
Currency for U.S. dollars for settlement on such Interest Payment Date, in an
amount equal to the aggregate amount of the Specified Currency payable to all
holders of Notes not electing to receive the Specified Currency on such
Interest Payment Date and at which the applicable dealer commits to execute a
contract. If such bid quotations are not available, payments will be made in
the Specified Currency. All currency exchange costs will be borne by the
holder of the Foreign Currency Note by deductions from such payments.
Unless otherwise specified on the face hereof, if this is a Foreign
Currency Note, the Holder hereof may elect to receive payment of the principal
of, and interest and premium (if any) on, this Note in the Specified Currency
by transmitting a written request for such payment to the principal offices of
the Paying Agent prior to the Record Date immediately preceding any Interest
Payment Date and at least 10 Business Days prior to Maturity in the case of
payments to be made upon Maturity. Such request may be in writing (mailed or
hand delivered) or by cable, telex, or other form of facsimile transmission.
Such Holder may elect to receive payment in the Specified Currency for all
payments of principal, interest and premium, if any, and need not file a
separate election for each payment. Such election will remain in effect until
revoked by written notice to the Paying Agent, but written notice of any such
revocation must be received by the Paying Agent on or prior to the fifth
Business Day after the Record Date in the case of any payment of interest or
at least 10 Business Days prior to Maturity in the case of the payment of
principal and premium, if any.
Unless otherwise specified on the face hereof, the payment of the
principal of, and interest and premium, if any, on each Foreign Currency Note
to be made in U.S. dollars will be made in the manner specified under Section
3.A. or 3.B. (as applicable) above. Unless otherwise specified on the face
hereof, the payment of principal of, and interest and premium, if any, on each
Foreign Currency Note to be made in the Specified Currency will be made as set
forth below. If this is a Foreign Currency Note, the payment of interest
(other than interest payable to the Holder hereof, if any, upon Maturity) to
be made in the Specified Currency will be paid by bank draft mailed to the
person in whose name this Note is registered at the close of business on the
applicable Record Date. If this is a Foreign Currency Note, the principal of
and premium, if any, on this Note and any interest payable to the Holder
thereof when the principal of this Note is payable will be paid by bank draft
upon surrender of this Note at the corporate trust office of the Paying Agent
in the Borough of Manhattan, The City of New York. Specified Currency drafts
will be drawn on a bank office located outside the United States. If the
Paying Agent receives a written request from the Holder of the equivalent of
U.S. $1,000,000 or more in aggregate principal amount of the Notes not later
than the close of business on a Record Date for an interest payment or the
fifteenth day prior to Maturity, the Paying Agent will, subject to applicable
laws and regulations, until it receives notice to the contrary (but, in the
case of payments to be made upon Maturity, only after the surrender of the
Note or Notes in the Borough of Manhattan, The City of New York, not later
than one Business Day prior to Maturity), make all Specified Currency payments
to such Holder by wire transfer to an account (a) designated in such written
request and (b) maintained in the country of the Specified Currency.
If this is a Foreign Currency Note and the Specified Currency is not
available for the payment of principal of, and interest and premium, if any,
on, this Note due to the imposition of exchange controls or other
circumstances beyond the control of the Company, or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public authorities of or within the international banking
community, the Company will be entitled to satisfy its obligations to the
Holder hereof by making such payment in U.S. dollars on the basis of the noon
buying rate in The City of New York for cable transfers of the Specified
Currency as certified for customs purposes by the Federal Reserve Bank of New
York (the "Market Exchange Rate") on the Record Date prior to such payment, or
if such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. Any payment made under such circumstances in U.S. dollars where
required payment is in a Specified Currency will not constitute a default
under the Indenture or this Note.
If this is a Foreign Currency Note and payment 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, all payments due on that date with respect to this
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 Paying Agent
shall determine the U.S. dollar equivalent of each of the Components on the
basis of the most recently available Market Exchange Rate, or as otherwise
specified on the face hereof. 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 multiplied or divided 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 by the Exchange Rate Agent or
Paying Agent shall be at its sole discretion (except to the extent expressly
provided herein that any determination is subject to approval by the Company)
and, in the absence of manifest error, shall be conclusive for all purposes
and binding on the Holder hereof and the Exchange Rate Agent or Paying Agent,
as the case may be, shall have no liability therefor. Any payment made in
U.S. dollars under the aforementioned circumstances where required payment is
in a Specified Currency will not constitute a default under the Indenture or
this Note.
5. In case an Event of Default with respect to the Notes shall have
occurred and be continuing, the principal hereof may be declared due and
payable in the manner and with the effect provided in the Indenture. If the
principal of any Original Issue Discount Note is declared to be due and
payable, the amount of principal due and payable with respect to such Note
shall be limited to the sum of the aggregate principal amount of such Note
multiplied by the Issue Price(expressed as a percentage of the aggregate
principal amount) indicated on the face hereof plus the original issue
discount accrued from the Original Issue Date indicated on the face hereof but
excluding the date of acceleration, which accrual shall be calculated using
the"interest method" (computed in accordance with generally accepted
accounting principles) in effect on the date of acceleration.
6. The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities under the
Indenture at any time by the Company with the consent of the Holders of 66
2/3% in aggregate principal amount of the Securities at the time Outstanding,
as defined in the Indenture, of each series of Securities to be affected
thereby. The Indenture also contains provisions permitting the Holder of
specified percentages in aggregate principal amount of the Securities of any
series at the time Outstanding, as defined in the Indenture, on behalf of the
Holders of all the Securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences with respect to such series. 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 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
used in this paragraph the term "principal amount" means in the case of any
Original Issue Discount Note the amount that would then be due and payable
upon acceleration of the Maturity thereof, as specified in this Note.
7. No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Note at the times, place and rate, and in the Specified
Currency, herein prescribed.
8. As provided in the Indenture and subject to certain limitations
therein set forth, this Note is transferable on the Securities Register of the
Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company to be maintained for that purpose in the
Borough of Manhattan, The City of New York, or at such additional offices or
agencies maintained for such purpose as the Company may from time to time
designate, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of like terms, provisions, and tenor,
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
9. The Notes are issuable only in registered form without coupons and,
unless otherwise specified on the face hereof, in minimum denominations of
$1,000 and in integral multiples of $1,000 for any amount in excess of the
minimum denomination. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of like terms, provisions and tenor and of different
authorized denominations, as requested by the Holder surrendering the same.
10. No service charge shall be made for any such transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with the registration of such
transfer or exchange, other than certain exchanges not involving any transfer.
11. Certain terms used in this Note which are defined in the Indenture
and not otherwise defined herein have the meanings set forth in the Indenture.
12. THIS NOTE SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
13. The Company, the Trustee and any agent of the Company 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 be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
<PAGE>
FOR VALUE RECEIVED the undersigned hereby sells, assigns
and transfers unto
Please Insert Social Security or other Identifying Number of Assignee
___________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND INCLUDING POSTAL ZIP CODE ADDRESS OF
ASSIGNEE
___________________________________________
the within Note of ASSOCIATES CORPORATION OF NORTH AMERICA and all rights
thereunder, hereby does irrevocably constitute and appoint
___________________________________________, Attorney, to transfer the said
Note on the books of the Company, with full power of substitution in the
premises.
Dated: _____________________________________
NOTICE: The signature to
this assignment must
correspond with the name
as written upon the
face of the Note in
every particular without
alteration or
enlargement or any
change whatever.
