Exhibit 1(b)
Fleet Financial Group, Inc.
$2,000,000,000
Senior Medium-Term Notes, Series L
Subordinated Medium-Term Notes, Series M
Due Nine Months or More
from Date of Issue
Distribution Agreement
November 10, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Fleet National Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Fleet Financial Group, Inc., a Rhode Island corporation (the "Company"),
confirms its agreement with you with respect to the issue and sale by the
Company of up to $2,000,000,000 aggregate principal amount of its Senior
Medium-Term Notes, Series L and Subordinated Medium-Term Notes, Series M
(respectively, the "Senior Notes" and the "Subordinated Notes"), Due Nine Months
or More from Date of Issue (collectively, the "Notes"). The Senior Notes are to
be issued under an indenture dated as of October 1, 1992 (the "Indenture"),
between the Company and The First National Bank of Chicago, as trustee (the
"Senior Trustee" or "First Chicago"). The Subordinated Notes are to be issued
under an indenture dated as of October 1, 1992, between the Company and First
Chicago as trustee (the "Subordinated Trustee" and, collectively with the Senior
Trustee, the "Trustee"), as supplemented by a first supplemental indenture dated
as of November 30, 1992, between the Company and the Subordinated Trustee (as so
supplemented, the "Subordinated Indenture" and collectively with the Senior
Indenture, the "Indentures"). The Notes to be sold by you will be issued in
minimum denominations of $150,000 or any amount in excess thereof which is an
integral multiple of $1,000, will be issued only in fully registered form and
will have the annual interest rates, maturities and, if appropriate, other terms
set forth in a supplement to the Prospectus referred to below. The Notes will be
issued, and the terms thereof established, in accordance with the applicable
Indenture and the Medium-Term Notes Administrative Procedures attached hereto as
Exhibit A (the "Procedures"). The Procedures may only be amended by written
agreement of the Company and you after notice to, and with the approval of, the
Trustee.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, you as set forth below in this Section 1. Certain terms used in
this Section 1 are defined in paragraph (d) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on such Form
(Registration Number: 333-37231), including a base prospectus, which also
constitutes pursuant to Rule 429 under the Act Post-Effective Amendment No. 1 to
registration statement on such Form (Registration Number: 333-00701) and which
become effective, for the registration under the Act of securities (the
"Securities"), including the Notes, in an aggregate principal amount of
$2,000,000,000. Such registration statements, as amended at the date of this
Agreement, meet the requirements set forth in Rule 415(a)(1)(ix) or (x) under
the Act and comply in all other material respects with said Rule. The Company
has included in such registration statements, as amended at the date of this
Agreement, or has filed or will file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act, a supplement to the form of
prospectus included in such registration statement relating to the Notes and the
plan of distribution thereof (the "Prospectus Supplement"). In connection with
the sale of Notes the Company proposes to file with the Commission pursuant to
the applicable paragraph of Rule 424(b) under the Act further supplements to the
Prospectus Supplement specifying the interest rates, maturity dates and, if
appropriate, other terms of the Notes sold pursuant hereto or the offering
thereof.
(b) As of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission, on each day of an
Offering Period (referred to below) and at the date of delivery by the Company
of any Notes sold hereunder (a "Closing Date"), (i) the Registration Statement,
as amended as of any such time, and the Prospectus, as supplemented as of any
such time, and each Indenture will comply in all material respects with the
applicable requirements of the Act, the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the Securities Exchange Act of 1934 (the "Exchange Act") and
the respective rules thereunder; (ii) the Registration Statement, as amended as
of any such time, did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and (iii) the
Prospectus, as supplemented as of any such time, will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no
representations or warranties as to (i) that part of the Registration Statement
which shall constitute the Statement of Eligibility and Qualification (Form T-1)
under the Trust Indenture Act of the Trustee or (ii) the information contained
in or omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by you specifically for inclusion in
connection with the preparation of the Registration Statement or the Prospectus
(or any supplement thereto).
(c) As of the time any Notes are issued and sold hereunder, each
Indenture will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms and such Notes will have been
duly authorized, executed, authenticated and, when paid for by the purchasers
thereof, will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the applicable Indenture.
(d) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall mean the date and
time that this Agreement is executed and delivered by the parties hereto. "Base
prospectus" shall mean the form of base prospectus relating to the Securities
contained in the Registration Statement at the Effective Date. "Prospectus"
shall mean the Base prospectus as supplemented by the Prospectus Supplement.
"Registration Statement" shall mean the registration statements referred to in
paragraph (a) above, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time. "Rule 415" and "Rule 424" refer to
such rules under the Act. Any reference herein to the Registration Statement,
the Base prospectus, the Prospectus Supplement or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Base
prospectus, the Prospectus Supplement or the Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Base prospectus, the Prospectus
- 2 -
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Base prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
2. Appointment of Agent; Solicitation by the Agent of Offers to Purchase.
Subject to the terms and conditions set forth herein, the Company hereby
authorizes the Agent to act as its agent to solicit offers for the purchase of
all or part of the Notes from the Company. The Company shall notify the Agent
from time to time as to the commencement of a period during which the Notes may
be offered and sold by the Agent (each period, commencing with such notification
and ending at such time as the authorization for offers and sales through the
Agent shall have been suspended by the Company or the Agent as provided
hereunder, being referred to as an "Offering Period").
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, the Agent agrees, solely as agent of the
Company, to use its reasonable efforts to solicit offers to purchase the Notes
during each Offering Period from the Company upon the terms and conditions set
forth in the Prospectus (and any supplement thereto) and in the Procedures.
Under no circumstances will the Agent be obligated to purchase any Notes for its
own account.
The Company shall have the sole right to accept offers to purchase the
Notes and may reject any such offer in whole or in part. The Agent shall have
the right to reject, in its discretion reasonably exercised, any offer received
by it to purchase the Notes in whole or in part, and any such rejection shall
not be deemed a breach of its agreements contained herein.
The Company reserves the right, in its sole discretion, to instruct the
Agent to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agent will forthwith suspend solicitation of offers to purchase
Notes from the Company until such time as the Company has advised them that such
solicitation may be resumed.
The Company agrees to pay the Agent a commission, on the Closing Date with
respect to each sale of Notes by the Company as a result of a solicitation made
by the Agent, in an amount equal to that percentage specified in Schedule I
hereto of the aggregate principal amount of the Notes sold by the Company. Such
commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by the Agent for the Company at such
time and in such amounts as the Agent deems advisable. The Company may from time
to time offer Notes for sale otherwise than through the Agent; provided,
however, that so long as this Agreement shall be in effect, the Company shall
not solicit or accept offers to purchase Notes through the agent other than the
Agent, an affiliate of the Company, or any of Salomon Brothers Inc, ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇, Sachs
& Co., ▇.▇. ▇▇▇▇▇▇ Securities Inc. and UBS Securities LLC, which have entered
into a Selling Agency Agreement with the Company providing for the sale of Notes
on terms and conditions substantially similar to those contained herein, unless
such solicitation or acceptance is on terms with respect to commissions
substantially similar to those set forth in Schedule I hereto and the Company
shall give the Agent reasonable notice of the appointment of such agent for the
purpose of soliciting the Notes.
- 3 -
3. Offering and Sale of Notes. The Agent and the Company agree to perform
the respective duties and obligations specifically provided to be performed by
them in the Procedures.
4. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes, the
Company will not file any amendment of the Registration Statement or supplement
to the Prospectus (except for (i) periodic or current reports filed under the
Exchange Act, (ii) a supplement relating to any offering of Notes providing
solely for the specification of or a change in the maturity dates, interest
rates, issuance prices or other terms of any Notes or (iii) a supplement
relating to an offering of Securities other than the Notes) unless the Company
has furnished you a copy for your review prior to filing and given you a
reasonable opportunity to comment on any such proposed amendment or supplement.
Subject to the foregoing sentence, the Company will cause each supplement to the
Prospectus to be filed with the Commission pursuant to the applicable paragraph
of Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to you of such filing. The Company will promptly advise you (i)
when the Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424(b), (ii) when, prior to the termination of the
offering of the Notes, any amendment of the Registration Statement shall have
been filed or become effective, (iii) of any request by the Commission for any
amendment of the Registration Statement or supplement to the Prospectus or for
any additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. 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) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend the Registration
Statement or to supplement the Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company promptly will (i) notify you
to suspend solicitation of offers to purchase Notes (and, if so notified by the
Company, you shall forthwith suspend such solicitation and cease using the
Prospectus as then supplemented), (ii) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to you in such
quantities as you may reasonably request. If such amendment or supplement, and
any documents, certificates and opinions furnished to you pursuant to paragraph
(g) of this Section 4 in connection with the preparation or filing of such
amendment or supplement are satisfactory in all respects to you, you will, upon
the filing of such amendment or supplement with the Commission and upon the
effectiveness of an amendment to the Registration Statement, if such an
amendment is required, resume your obligation to solicit offers to purchase
Notes hereunder.
- 4 -
(c) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and will furnish to you copies of such
documents. In addition, on the date on which the Company makes any announcement
to the general public concerning earnings or concerning any other event which is
required to be described, or which the Company proposes to describe, in a
document filed pursuant to the Exchange Act, the Company will furnish to you the
information contained or to be contained in such announcement. The Company also
will furnish to you copies of all other press releases or announcements to the
general public of a financial nature. The Company will immediately notify you of
(i) any downgrading in the rating of the Notes or any other debt securities of
the Company, or the announcement that the Notes or any other debt securities of
the Company have been placed on a "watchlist" with negative implications, by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or (ii) any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change, as soon as the
Company learns of any such decrease or notice, as soon as the Company learns of
any such downgrading or announcement.
(d) As soon as practicable, the Company will make generally
available to its security holders and to you an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to you and your counsel, without
charge, copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus may be required by the Act, as many copies
of the Prospectus and any supplement thereto as you may reasonably request.
(f) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as you may designate, will maintain
such qualifications in effect so long as required for the distribution of the
Notes, and will arrange for the determination of the legality of the Notes for
purchase by institutional investors.
(g) The Company shall furnish to you such information, documents,
certificates of officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indentures, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as you may from time to time and at any
time prior to the termination of this Agreement reasonably request.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its obligations
under this Agreement, including the fees and disbursements of its accountants
and counsel, the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof and supplements
thereto, each Indenture, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the fees and disbursements, including fees of counsel, incurred in compliance
with Section 4(f), the fees and disbursements of the Trustee and the fees of any
agency that rates the Notes, (ii) reimburse you on a monthly basis for all
out-of-pocket expenses incurred by you in connection with this Agreement and
(iii) pay the reasonable fees and expenses of your counsel incurred in
connection with this Agreement.
- 5 -
(i) Each acceptance by the Company of an offer to purchase Notes
will be deemed to be an affirmation that its representations and warranties
contained in this Agreement are true and correct at the time of such acceptance,
as though made at and as of such time, and a covenant that such representations
and warranties will be true and correct at the time of delivery to the purchaser
of the Notes relating to such acceptance, as though made at and as of such time
(it being understood that for purposes of the foregoing affirmation and covenant
such representations and warranties shall relate to the Registration Statement
and Prospectus as amended or supplemented at each such time). Each such
acceptance by the Company of an offer for the purchase of Notes shall be deemed
to constitute an additional representation, warranty and agreement by the
Company that, as of the settlement date for the sale of such Notes, after giving
effect to the issuance of such Notes, of any other Notes to be issued on or
prior to such settlement date and of any other Securities to be issued and sold
by the Company on or prior to such settlement date, the aggregate amount of
Securities (including any Notes) which have been issued and sold by the Company
will not exceed the amount of Securities registered pursuant to the Registration
Statement.
(j) Prior to the commencement of the first Offering Period
subsequent to each time, and subsequent to each time during any Offering Period,
that the Registration Statement or the Prospectus is amended or supplemented
(other than by an amendment or supplement relating to any offering of Securities
other than the Notes or providing solely for the specification of or a change in
the maturity dates, the interest rates, the issuance prices or other similar
terms of any Notes sold pursuant hereto), the Company will deliver or cause to
be delivered promptly to you a certificate of the Company, signed by the
Chairman of the Board, or the President, or any Executive Vice President and the
principal financial or accounting officer or Treasurer of the Company, dated the
date of the effectiveness of such amendment or the date of the filing of such
supplement, in form reasonably satisfactory to you, of the same tenor as the
certificate referred to in Section 5(d) but modified to relate to the last day
of the fiscal quarter for which financial statements of the Company were last
filed with the Commission and to the Registration Statement and the Prospectus
as amended and supplemented to the time of the effectiveness of such amendment
or the filing of such supplement.
(k) Prior to the commencement of the first Offering Period
subsequent to each time, and subsequent to each time during any Offering Period,
each time that the Registration Statement or the Prospectus is amended or
supplemented (other than by an amendment or supplement (i) relating to any
offering of Securities other than the Notes, (ii) providing solely for the
specification of or a change in the maturity dates, the interest rates, the
issuance prices or other similar terms of any Notes sold pursuant hereto or
(iii) setting forth or incorporating by reference financial statements or other
information as of and for a fiscal quarter, unless, in the case of clause (iii)
above, in your reasonable judgment, such financial statements or other
information are of such a nature that an opinion of counsel should be
furnished), the Company shall furnish or cause to be furnished promptly to you a
written opinion of counsel of the Company satisfactory to you, dated the date of
the effectiveness of such amendment or the date of the filing of such
supplement, in form satisfactory to you, of the same tenor as the opinion
referred to in Section 5(b) but modified to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of the effectiveness
of such amendment or the filing of such supplement or, in lieu of such opinion,
counsel last furnishing such an opinion to you may 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 will be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement).
- 6 -
(l) Prior to the commencement of the first Offering Period
subsequent to each time that the Registration Statement or the Prospectus is
amended or supplemented to include or incorporate amended or supplemental
financial information, and each time during any Offering Period that the
Registration Statement or Prospectus is so amended or supplemented, the Company
shall cause its independent public accountants promptly to furnish you a letter,
dated the date of the commencement of such Offering Period or the date of the
effectiveness of such amendment or the date of the filing of such supplement, as
the case may be, in form satisfactory to you, of the same tenor as the letter
referred to in Section 5(e) with such changes as may be necessary to reflect the
amended and supplemental financial information included or incorporated by
reference in the Registration Statement and the Prospectus, as amended or
supplemented to the date of such letter; provided, that in no event will the
Company accept any offer to purchase Notes unless such letter shall have been
delivered; provided, further, that, if the Registration Statement or the
Prospectus is amended or supplemented solely to include or incorporate by
reference financial information as of and for a fiscal quarter, the Company's
independent public accountants may limit the scope of such letter, which shall
be satisfactory in form to you, to the unaudited financial statements, the
related "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and any other information of an accounting, financial or
statistical nature included in such amendment or supplement, unless, in your
reasonable judgment, such letter should cover other information or changes in
specified financial statement line items.
(m) The Company confirms as of the date hereof that it has complied with
all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act Relating
to Disclosure of Doing Business with Cuba, and the Company further agrees that
if it commences engaging in business with the government of Cuba or with any
person or affiliate located in Cuba after the date the Registration Statement
becomes or has become effective with the Securities and Exchange Commission or
with the Florida Department of Banking and Finance (the "Department"), whichever
date is later, or if the information reported in the Prospectus, if any,
concerning the Company's business with Cuba or with any person or affiliate
located in Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate, in a form
acceptable to the Department.
5. Conditions to the Obligations of the Agent. The obligations of the
Agent to solicit offers to purchase the Notes shall be subject to the accuracy
of the representations and warranties on the part of the Company contained
herein as of the Execution Time, on the Effective Date, when any supplement to
the Prospectus is filed with the Commission and as of each Closing Date, to the
accuracy of the statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement, shall
have been filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the Agent the opinion of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Company, dated the Execution Time, to the
effect that:
(i) each of the Company and Fleet National Bank (the "Bank") and any
other subsidiary or subsidiaries which the Agent may reasonably request
(individually a "Subsidiary" and collectively the "Subsidiaries") has been
duly incorporated and is validly existing as a corporation or national
association in good
- 7 -
standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its properties
and conduct its business as described in the Prospectus; the Company is
qualified to do business as a foreign corporation under the laws of the
State of New York; except as stated above, none of the Company or the Bank
is required to be qualified to do business as a foreign corporation under
the laws of any other jurisdiction; and the Company is registered as a
bank holding company under the Bank Holding Company Act of 1956, as
amended;
(ii) all the outstanding shares of capital stock of the Bank and
such Subsidiaries have been duly and validly authorized and issued and are
fully paid and (except as provided in 12 U.S.C. ss. 55) nonassessable,
and, except as otherwise set forth in the Prospectus, all outstanding
shares of capital stock of the Bank and such Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and
clear of any perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests, claims, liens or
encumbrances;
(iii) each Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding agreement
enforceable against the Company in accordance with its terms (subject, as
to enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights generally
from time to time in effect and to the availability of equitable remedies
which are discretionary with the courts);
(iv) the Notes have been duly authorized as a series of Debt
Securities under the applicable Indenture, are in the forms provided for
by resolutions of the Board of Directors of the Company adopted pursuant
to such Indenture, conform to the description thereof contained in the
Prospectus, and, when executed and authenticated in accordance with the
provisions of the applicable Indenture and delivered to and paid for by
the purchasers, will constitute valid and binding obligations of the
Company entitled to the benefits of the applicable Indenture;
(v) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any
of its subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not described or filed
as required;
(vi) the Registration Statement and any amendments thereto have
become effective under the Act; to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement, as
amended, has been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement, the Prospectus
and each amendment thereof or supplement thereto as of their respective
effective or issue dates (other than the financial statements and other
financial data contained therein as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder; and such counsel has no reason to believe that the
Registration Statement, or any amendment thereof, at the time it became
effective and at the date of this Agreement (or, in the case of any
opinion delivered pursuant to Section 4(k) or
- 8 -
Section 6, the date of such subsequently delivered opinion), contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, as amended or supplemented to the
date of such opinion, includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Notes
as contemplated by this Agreement and such other approvals (specified in
such opinion) as have been obtained;
(ix) neither the issue and sale of the Notes, nor the consummation
of any other of the transactions herein contemplated nor the fulfillment
of the terms hereof will conflict with, result in a breach of, or
constitute a default under the charter or by-laws of the Company or the
terms of any indenture or other agreement or instrument known to such
counsel and to which the Company or any of its subsidiaries is a party or
bound, or any order or regulation known to such counsel to be applicable
to the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries; and
(x) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Rhode Island or the United States, to the extent deemed proper and specified in
such opinion, upon the opinion of other counsel of good standing believed to be
reliable and who are satisfactory to counsel for the Agent and (B) as to matters
of fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials. References to the Prospectus in this paragraph
(b) include any supplements thereto at the date such opinion is rendered.
(c) [Intentionally omitted]
(d) The Company shall have furnished to the Agent a certificate of
the Company, signed by the Chairman of the Board, or the President, or any
Executive Vice President and the principal financial or accounting officer or
Treasurer of the Company, dated the Execution Time, to the effect that the
signers of such certificate have carefully examined the Registration Statement,
the Prospectus, any supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
date hereof with the same effect as if made on the date hereof and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied as a condition to the
obligation of the Agent to solicit offers to purchase the Notes;
- 9 -
(ii) 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 Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its subsidiaries,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(e) Prior to the Execution Time, the Company shall have furnished to
the Agent such further information, documents, certificates and opinions of
counsel as the Agent may reasonably request.
The documents required to be delivered by this Section 5 shall be
delivered at the office of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, 2700 Hospital Trust Tower,
Providence, Rhode Island 02903, on the date hereof.
6. Right of Person Who Agreed to Purchase to Refuse to Purchase. (a) The
Company agrees that any person who has agreed to purchase and pay for any Note,
shall have the right to refuse to purchase such Note if (i) at the Closing Date
therefor, any condition set forth in Section 5 (except that references to the
Prospectus shall be to the Prospectus as supplemented at the Closing Date) shall
not be satisfied, (ii) subsequent to the agreement to purchase such Note, any
change, or any development with respect to the Company involving a prospective
change, in or affecting the business or properties of the Company and its
subsidiaries shall have occurred the effect of which is, in the judgment of the
Agent, so material and adverse as to make it impractical or inadvisable to
proceed with the delivery of such Note or (iii) subsequent to the agreement to
purchase such Note, (w) there shall have been any decrease in the ratings of any
of the Company's debt securities by ▇▇▇▇▇'▇ Investors Service or Standard &
Poor's Corporation (each a "Rating Agency") or any such Rating Agency shall
publicly announce that it has placed any of such debt securities on a
"watchlist" with negative implications, (x) trading in the Company's Common
Stock shall have been suspended by the Commission or the New York Stock Exchange
or trading in securities generally on the New York Stock Exchange shall have
been suspended or limited or minimum prices shall have been established on such
Exchange, (y) a banking moratorium shall have been declared either by Federal,
Rhode Island or New York State authorities, or (z) there shall have occurred any
outbreak or escalation of hostilities or other calamity or crisis the effect of
which on the financial markets or the United States is such as to make it, in
the judgment of the Agent, impracticable to market such Notes (it being
understood that under no circumstance shall the Agent have any duty or
obligation to exercise any judgment permitted to be exercised pursuant to this
Section 6(a)).
(b) The Company further agrees to notify the Agent upon the
occurrence of any change, condition or development contemplated by Section
6(a)(ii) or (iii).
7. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless you and each person who controls you within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which you, they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law 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 the registration statement for the registration of the Securities
as originally filed or in any amendment thereof, or in the Prospectus or any
preliminary Prospectus, or in any amendment thereof or supplement thereto, or
arise out
- 10 -
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 agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will 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 any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by you specifically
for use in connection with the preparation thereof, and (ii) such indemnity with
respect to the Prospectus or any preliminary Prospectus shall not inure to the
benefit of you (or any person controlling you) from whom the person asserting
any such loss, claim, damage or liability purchased the Notes which are the
subject thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Notes to such
person in any case where such delivery is required by the Act and the untrue
statement or omission of a material fact contained in the Prospectus or any
preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
supplemented). This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) You agree to indemnify and hold harmless the Company, each of
its directors, each of its officers who signs the Registration Statement and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
you, but only with reference to written information relating to you furnished to
the Company by you specifically for use in the preparation of the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability which you may otherwise have. The Company acknowledges
that the statements set forth in the last sentence of the ninth paragraph under
the heading "Plan of Distribution" of the Prospectus Supplement relating to
purchases and sales of Notes in the secondary market constitute the only
information furnished in writing by you for inclusion in the documents referred
to in the foregoing indemnity, and you confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission, without prejudice, so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 7. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable
- 11 -
for the expenses of more than one separate counsel (plus any local counsel),
approved by you in the case of paragraph (a) of this Section 7, representing the
indemnified parties under such paragraph (a) who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) If for any reason the indemnification provided for in paragraph
(a) of this Section 7 is due in accordance with its terms but is held by a court
to be unavailable from the Company on grounds of policy or otherwise, you shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) to which the Company and you may be subject in an amount not in
excess of the commissions received by you in connection with the Notes from
which such losses, claims, damages and liabilities arise unless you were guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act). For purposes of this Section 7, each person who controls you within the
meaning of the Act shall have the same rights to contribution as you and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (y) and (z) of this
paragraph (d).
8. Termination. This Agreement will continue in effect until terminated as
provided in this Section 8. This Agreement may be terminated by either the
Company or you, giving written notice to the other party of such termination.
This Agreement shall so terminate at the close of business on the first business
day following the receipt of such notice by the party to whom such notice is
given. In the event of such termination, no party shall have any liability to
the other party hereto, except as provided in the fourth paragraph of Section
2(a), Section 4(b), Section 4(h), Section 7 and Section 9. The provisions of
this Agreement (including without limitation Section 6 hereof) applicable to any
purchase of a Note for which an agreement to purchase exists prior to the
termination hereof shall survive any termination of this Agreement.
9. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of you or the Company or any of the officers, directors or controlling
persons referred to in Section 7 hereof, and will survive delivery of and
payment for the Notes. The provisions of Sections 4(h) and 7 hereof shall
survive the termination or cancellation of this Agreement.
10. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to you, will be mailed, delivered or telegraphed
and confirmed to you, at the address set forth above, attention of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Senior Vice President; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of the Secretary and General Counsel.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7 hereof, and no other
person will have any right or obligation hereunder, except for the right of a
person who has agreed to purchase a Note to refuse to purchase such Note as
provided in Section 6 hereof.
- 12 -
12. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
- 13 -
Very truly yours,
FLEET FINANCIAL GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
The foregoing Agreement
is hereby confirmed and accepted
as of the date hereof.
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
- 14 -
SCHEDULE I
Commission:
The Company agrees to pay the Agent a commission equal to the following
percentage of the principal amount of each Note sold on an agency basis by the
Agent:
Term Commission Rate
---- ---------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to and including 30 years .750%
Over 30 years to be negotiated
- 15 -
EXHIBIT A
Fleet Financial Group, Inc.
Medium-Term Note Administrative Procedures
November 10, 1997
The Senior Medium-Term Notes, Series L and Subordinated Medium-Term
Notes, Series M (respectively, the "Senior Notes" and the "Subordinated Notes"),
Due Nine Months or More from Date of Issue (collectively, the "Notes") of Fleet
Financial Group, Inc. (the "Company"), are to be offered on a continuing basis.
Fleet National Bank, ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇.▇. ▇▇▇▇▇▇ Securities Inc., Salomon Brothers Inc and UBS
Securities LLC will be acting as agents (the "Agents") pursuant to distribution
agreements dated as of the date hereof. The Agents will not be obligated to
purchase Notes for their own account, unless otherwise agreed. The Notes are
being sold pursuant to a selling agency agreement between the Company and the
Agent dated the date hereof (the "Agency Agreement"). The Senior Notes will be
issued under an indenture dated as of October 1, 1992, between the Company and
The First National Bank of Chicago (the "Senior Trustee" or "First Chicago"), as
trustee (the "Senior Indenture"). The Subordinated Notes will be issued under an
indenture dated as of October 1, 1992, between the Company and First Chicago
(the "Subordinated Trustee" and collectively with the Senior Trustee, the
"Trustee") as trustee, as supplemented by a first supplemental indenture dated
as of November 30, 1992, between the Company and the Subordinated Trustee (as so
supplemented, the "Subordinated Indenture" and collectively with the Senior
Indenture, the "Indentures"). The Senior Notes will rank equally with all other
unsecured and unsubordinated debt of the Company. The Subordinated Notes will be
subordinate and junior in right of payment to all Senior Indebtedness and Other
Financial Obligations of the Company, to the extent and in the manner set forth
in the Subordinated Indenture. The Notes have been registered with the
Securities and Exchange Commission (the "Commission").
The Agency Agreement provides that Notes may also be purchased by an
Agent acting solely as principal and not as agent. In the event of any such
purchase, the functions of both the Agent and the beneficial owner under the
administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
Each Note will be represented by either a Global Security (as
defined hereinafter) delivered to the Trustee, as
agent for The Depository Trust Company ("DTC"), and recorded in the book-entry
system maintained by DTC (a "Book-Entry Note") or a certificate delivered to the
Holder thereof or a Person designated by such Holder (a "Certificated Note"). An
owner of a Book-Entry Note will not be entitled to receive a certificate
representing such Note.
The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agent and the sale as a result thereof by the
Company are explained below. Administrative and record-keeping responsibilities
will be handled for the Company by its Treasury Department. The Company will
advise the Agent and the Trustee in writing of those persons handling
administrative responsibilities with whom the Agent and the Trustee are to
communicate regarding orders to purchase Notes and the details of their
delivery.
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the applicable
Indenture and the Notes shall be used herein as therein defined. Notes for which
interest is calculated on the basis of a fixed interest rate, which may be zero,
are referred to herein as "Fixed Rate Notes". Notes for which interest is
calculated on the basis of a floating interest rate are referred to herein as
"Floating Rate Notes". To the extent the procedures set forth below conflict
with the provisions of the Notes, the applicable Indenture, DTC's operating
requirements or the Agency Agreement, the relevant provisions of the Notes, the
applicable Indenture, DTC's operating requirements and the Agency Agreement
shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and the Trustee to DTC dated as of March 27, 1996, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC dated as of
May 26, 1989, and its obligations as a participant in DTC, including DTC's
Same-Day Funds Settlement system ("SDFS").
17
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry Notes, the Company will issue a
single global security in fully registered form without coupons (a "Global
Security") representing up to $250,000,000 principal amount(or such other
maximum as may from time to time be agreed to by DTC) of all such Book-Entry
Notes that have the same rank (senior or subordinated), original issue date,
original issue discount provisions, if any, Interest Payment Dates, Regular
Record Dates, Interest Payment Period, redemption provisions, if any, Maturity
Date, and, in the case of Fixed Rate Notes, interest rate, or, in the case of
Floating Rate Notes, initial interest rate, Base Rate, Index Maturity, Interest
Reset Period, Interest Reset Dates, Spread and/or Spread Multiplier, if any,
minimum interest rate, if any, and maximum interest rate, if any (collectively,
the "Terms"). Each Global Security will be dated and issued as of the date of
its authentication by the Trustee. Each Global Security will bear an original
issue date, which will be (i) with respect to an original Global Security (or
any portion thereof), the original issue date specified in such Global Security
and (ii) following a consolidation of Global Securities, with respect to the
Global Security resulting from such consolidation, the most recent Interest
Payment Date to which interest has been paid or duly provided for on the
predecessor Global Securities, regardless of the date of authentication of such
resulting Global Security. No Global Security will represent (i) both Fixed Rate
and Floating Rate Book-Entry Notes or (ii) any Certificated Note.
Identification The Company has arranged with the CUSIP
Numbers: Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau") for the reservation of two series of
CUSIP numbers, each of which consists of approximately 900 CUSIP numbers and
relates to Global Securities representing Book-Entry Notes and book-entry
medium-term notes issued by the Company with other series designations. The
Company has obtained from the CUSIP Service Bureau a written list of such
reserved CUSIP numbers, which the Company shall deliver to the Trustee and DTC.
The Company will assign CUSIP numbers to Global Securities as described below
under Settlement Procedure "B". DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Company has assigned to Global
Securities. At any time when fewer than 100 of the reserved CUSIP numbers remain
unassigned to Global Securities for either series, if it deems necessary, the
Company will reserve additional CUSIP numbers for assignment to Global
Securities. Upon obtaining such additional CUSIP numbers, the Company shall
deliver a list of such additional CUSIP numbers to the Trustee and DTC.
Registration: Global Securities will be issued only in
fully registered form without coupons. Each Global Security will be registered
in the name of CEDE & CO., as nominee for DTC, on
18
the securities register for the Notes maintained under the applicable Indenture.
The beneficial owner of a Book-Entry Note (or one or more indirect participants
in DTC designated by such owner) will designate one or more participants in DTC
(with respect to such Book-Entry Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry system maintained by
DTC, and DTC will record in book-entry form, in accordance with instructions
provided by such Participants, a credit balance with respect to such beneficial
owner in such Book-Entry Note in the account of such Participants. The ownership
interest of such beneficial owner (or such participant) in such Book-Entry Note
will be recorded through the records of such Participants or through the
separate records of such Participants and one or more indirect participants in
DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in turn, by Participants (and, in
certain cases, one or more indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice of consolidation (a copy of which
shall be attached to the resulting Global Security described below) specifying
(i) the CUSIP numbers of two or more Outstanding Global Securities that
represent (A) Fixed Rate Book-Entry Notes having the same Terms and for which
interest has been paid to the same date or (B) Floating Rate Book-Entry Notes
having the same Terms and for which interest has been paid to the same date,
(ii) a date, occurring at least thirty days after such written notice is
delivered and at least thirty days before the next Interest Payment Date for
such Book-Entry Notes, on which such Global Securities shall be exchanged for a
single replacement Global Security and (iii) the single CUSIP number to be
assigned to such replacement Global Security (which shall be the CUSIP number
previously assigned to the Global Security with the earliest date of issuance).
Upon receipt of such a notice, DTC will send to its participants (including the
Trustee) a written reorganization notice to the effect that such exchange will
occur on such date. Prior to the specified exchange date, the Trustee will
deliver to the CUSIP Service Bureau a written notice setting forth such exchange
date and such single CUSIP number and stating that, as of such exchange date,
the CUSIP numbers of the individual Global Securities not assigned to the
replacement Global Security will no longer be valid. On the specified exchange
date, the Trustee will exchange such Global Securities for a single Global
Security bearing the single CUSIP number and the CUSIP numbers of the individual
Global Securities not assigned will, in accordance with CUSIP Service Bureau
procedures, be retired and not reassigned. Notwithstanding the foregoing, if the
Global Securities to be exchanged exceed $250,000,000 in aggregate principal
amount (or such other maximum amount as may from time to time be agreed
19
to by DTC) one Global Security will be authenticated and issued to represent
each $250,000,000 of principal amount (or such other maximum amount as may from
time to time be agreed to by DTC) of the exchanged Global Securities and an
additional Global Security will be authenticated and issued to represent any
remaining principal amount of such Global Securities (see "Denominations"
below).
Maturities: Each Book-Entry Note will mature nine months
or more from the date of its issue.
Denominations: Book-Entry Notes will be issued in principal
amounts of $1,000 or any integral multiple thereof. Global Securities will be
denominated in principal amounts not in excess of $250,000,000 (or such other
maximum amount as may from time to time be agreed to by DTC) . If one or more
Book-Entry Notes having an aggregate principal amount in excess of
$250,000,000(or such other maximum amount as may from time to time be agreed to
by DTC) would, but for the preceding sentence, be represented by a single Global
Security, then one Global Security will be authenticated and issued to represent
each $250,000,000 principal amount (or such other maximum amount as may from
time to time be agreed to by DTC) of such Book-Entry Note or Notes and an
additional Global Security will be authenticated and issued to represent any
remaining principal amount of such Book-Entry Note or Notes. In such a case,
each of the Global Securities representing such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
Interest: General. Interest, if any, on each Book-Entry
Note will accrue from the original issue date for the first interest period or
the last date to which interest has been paid, if any, for each subsequent
interest period, on the Global Security representing such Book-Entry Note, and
will be calculated and paid in the manner described in such Book-Entry Note and
in the Prospectus (as defined in the Agency Agreement), as supplemented by the
applicable Pricing Supplement. Unless otherwise specified therein, each payment
of interest on a Book-Entry Note will include interest accrued to but excluding
the Interest Payment Date or to but excluding Maturity. Interest payable at the
Maturity of a Book-Entry Note will be payable to the Person to whom the
principal of such Note is payable. Standard & Poor's Corporation will use the
information received in the pending deposit message described under Settlement
Procedure "C" below in order to include the amount of any interest payable and
certain other information regarding the related Global Security in the
appropriate (daily or weekly) bond report published by Standard & Poor's
Corporation.
Regular Record Dates. The Regular Record Date
with respect to any Interest Payment Date for Floating Rate Book-Entry Notes
shall be the date fifteen calendar
20
days immediately preceding such Interest Payment Date, whether or not such date
shall be a Business Day.
Interest Payment Dates on Fixed Rate
Book-Entry Notes. Interest payments on Fixed Rate Book-Entry Notes will be made
monthly on the 15th day of each month and at Maturity; provided, however, that
in the case of a Fixed Rate Book-Entry Note issued between a Regular Record Date
and an Interest Payment Date, or on an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date following the next succeeding
Regular Record Date. If any Interest Payment Date for a Fixed Rate Book-Entry
Note is not a Business Day, the payment due on such day shall be made on the
next succeeding Business Day and no interest shall accrue on such payment for
the period from and after such Interest Payment Date.
Interest Payment Dates on Floating Rate
Book-Entry Notes. Interest payments will be made on Floating Rate Book-Entry
Notes monthly on the 15th of each month; provided, however, that if an Interest
Payment Date for a Floating Rate Book-Entry Note would otherwise be a day that
is not a Business Day with respect to such Floating Rate Book-Entry Note, such
Interest Payment Date will be the next succeeding Business Day with respect to
such Floating Rate Book-Entry Note, except that in the case of a Floating Rate
Book-Entry Note for which the Base Rate is LIBOR, if such Business Day is in the
next succeeding calendar month, such Interest Payment Date will be the
immediately preceding Business Day; and provided further, that, in the case of a
Floating Rate Book-Entry Note issued between a Regular Record Date and an
Interest Payment Date or on an Interest Payment Date, the first interest payment
will be made on the Interest Payment Date following the next succeeding Regular
Record Date.
Notice of Floating Rate Interest Rates.
Promptly after each Interest Determination Date for Floating Rate Book-Entry
Notes, the Calculation Agent will notify the Trustee and Standard & Poor's
Corporation of the interest rates determined on such Interest Determination
Date.
Calculation of Fixed Rate Book-Entry Notes. Interest
Interest: on Fixed Rate Book-Entry Notes (including
interest for partial periods) will be calculated on the basis of a 360-day year
of twelve 30-day months.
Floating Rate Book-Entry Notes. Interest
rates on Floating Rate Book-Entry Notes will be determined as set forth in the
form of Notes. Interest on Floating Rate Book-Entry Notes, except as otherwise
set forth therein, will be calculated on the basis of actual days elapsed and a
year of 360 days, except that in the case of a Floating Rate Book-Entry Note for
which the Base Rate is the Treasury Rate or the CMT Rate,
21
interest will be calculated on the basis of the actual number of days in the
year.
Payments of Payment of Interest Only. Promptly after each
Principal and Regular Record Date, provided, with respect
Interest: to Floating Rate Notes, that the Calculation
Agent has provided the Trustee with the necessary information regarding interest
rates, the Trustee will deliver to the Company and DTC a written notice setting
forth, by CUSIP number, the amount of interest to be paid on each Global
Security on the following Interest Payment Date (other than an Interest Payment
Date coinciding with Maturity) and the total of such amounts. DTC will confirm
the amount payable on each Global Security on such Interest Payment Date by
reference to the appropriate (daily or weekly) bond reports published by
Standard & Poor's Corporation. The Company will pay to the Trustee, as paying
agent, the total amount of interest due on such Interest Payment Date (other
than at Maturity), and the Trustee will pay such amount to DTC, at the times and
in the manner set forth below under "Manner of Payment".
Payments at Maturity. On or about the last
Business Day of each month, the Trustee will deliver to the Company and DTC a
written list of principal and interest to be paid on each Global Security
maturing (on a Maturity or Redemption Date or otherwise) in the following month.
The Trustee, the Company and DTC will confirm the amounts of such principal and
interest payments with respect to each such Global Security on or about the
fifth Business Day preceding the Maturity of such Global Security. On or before
Maturity, the Company will pay to the Trustee, as paying agent, the principal
amount of such Global Security, together with interest due at such Maturity. The
Trustee will pay such amount to DTC at the times and in the manner set forth
below under "Manner of Payment". If any Maturity of a Global Security
representing Book-Entry Notes is not a Business Day, the payment due on such day
shall be made on the next succeeding Business Day and no interest shall accrue
on such payment for the period from and after such Maturity. Promptly after
payment to DTC of the principal and interest due at Maturity of such Global
Security, the Trustee will cancel such Global Security in accordance with the
applicable Indenture and so advise the Company. On the first Business Day of
each month, the Trustee will deliver to the Company a written statement
indicating the total principal amount of Outstanding Global Securities as of the
immediately preceding Business Day.
Manner of Payment. The total amount of any
principal and interest due on Global Securities on any Interest Payment Date or
at Maturity shall be paid by the Company to the Trustee in immediately available
funds no later than 9:30 A.M. (New York City time) on such date. The Company
will make such payment on such Global Securities by instructing the Trustee
22
to withdraw funds from an account maintained by the Company at First Chicago or
by wire transfer of funds available for immediate use to the Trustee. The
Company will confirm any such instructions in writing to the Trustee. Prior to
10 A.M. (New York City time) on the date of Maturity or as soon as possible
thereafter, the Trustee will pay by separate wire transfer (using Fedwire
message entry instructions in a form previously specified by DTC) to an account
at the Federal Reserve Bank of New York previously specified by DTC, in funds
available for immediate use by DTC, each payment of principal (together with
interest thereon) due on a Global Security on such date. On each Interest
Payment Date (other than at Maturity), interest payments shall be made to DTC,
in funds available for immediate use by DTC, in accordance with existing
arrangements between the Trustee and DTC. On each such date, DTC will pay, in
accordance with its SDFS operating procedures then in effect, such amounts in
funds available for immediate use to the respective Participants in whose names
the Book-Entry Notes represented by such Global Securities are recorded in the
book-entry system maintained by DTC. Neither the Company (as issuer or as paying
agent) nor the Trustee shall have any direct responsibility or liability for the
payment by DTC to such Participants of the principal of and interest on the
Book-Entry Notes.
Withholding Taxes. The amount of any taxes
required under applicable law to be withheld from any interest payment on a
Book-Entry Note will be determined and withheld by the Participant, indirect
participant in DTC or other Person responsible for forwarding payments and
materials directly to the beneficial owner of such Note.
Procedure for Rate The Company and the Agent will discuss from
Setting and time to time the aggregate principal amount
Posting: of, the issuance price of, and the interest
rates to be borne by, Book-Entry Notes that may be sold as a result of the
solicitation of orders by the Agent. If the Company decides to set prices of,
and rates borne by, any Book-Entry Notes in respect of which the Agent is to
solicit orders (the setting of such prices and rates to be referred to herein as
"posting") or if the Company decides to change prices or rates previously posted
by it, it will promptly advise the Agent of the prices and rates to be posted.
Acceptance and Unless otherwise instructed by the Company,
Rejection of the Agent will advise the Company promptly by
Orders: telephone of all orders to purchase
Book-Entry Notes received by such Agent, other than those rejected by it in
whole or in part in the reasonable exercise of its discretion. The Company has
the right to accept orders to purchase Book-Entry Notes and may reject any such
orders in whole or in part.
23
Preparation of If any order to purchase a Book-Entry Note is
Pricing accepted by or on behalf of the Company, the
Supplement: Company will prepare a pricing supplement (a
"Pricing Supplement") reflecting the terms of such Book-Entry Note and will
arrange to have ten copies thereof filed with the Commission in accordance with
the applicable paragraph of Rule 424(b) under the Act and will supply at least
ten copies thereof (and additional copies if requested) to the Agent which
presented the order (the "Presenting Agent") at the address set forth on
Schedule I hereto, to be delivered by overnight courier or telecopy to arrive no
later than 11:00 a.m., New York City time, on the Business Day following the
sale date.
The Presenting Agent will cause a Prospectus
and Pricing Supplement to be delivered to the purchaser of such Book-Entry Note.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the Pricing Supplement to Prospectuses
prior to their use. Outdated Pricing Supplements (other than those retained for
files), will be destroyed.
Suspension of The Company may instruct the Agent to suspend
Solicitation; at any time, for any period of time or
Amendment or permanently, the solicitation of orders to
Supplement: purchase Book-Entry Notes. Upon receipt of
such instructions, the Agent will forthwith suspend solicitation until such time
as the Company has advised them that such solicitation may be resumed.
In the event that at the time the Company
suspends solicitation of purchases there shall be any orders outstanding for
settlement, the Company will promptly advise the Agent and the Trustee whether
such orders may be settled and whether copies of the Prospectus as in effect at
the time of the suspension, together with the appropriate Pricing Supplement,
may be delivered in connection with the settlement of such orders. The Company
will have the sole responsibility for such decision and for any arrangements
that may be made in the event that the Company determines that such orders may
not be settled or that copies of such Prospectus may not be so delivered.
If the Company decides to amend or supplement
the Registration Statement (as defined in the Agency Agreement) or the
Prospectus, it will promptly advise the Agent and furnish the Agent with the
proposed amendment or supplement and with such certificates and opinions as are
required, all to the extent required by and in accordance with the terms of the
Agency Agreement. Subject to the provisions contained in Sections 4(a) and 4(b)
of the Agency Agreement, the Company may file with the Commission any such
supplement to the Prospectus relating to the Notes. The Company will provide the
Agent and
24
the Trustee with copies of any such supplement, and confirm to the Agent that
such supplement has been filed with the Commission pursuant to the applicable
paragraph of Rule 424(b).
Procedures For When the Company has determined to change the
Rate Changes: interest rates of Book-Entry Notes being
offered, it will promptly advise the Agent and the Agent will forthwith suspend
solicitation of orders. The Agent will telephone the Company with
recommendations as to the changed interest rates. At such time as the Company
has advised the Agent of the new interest rates, the Agent may resume
solicitation of orders. Until such time only "indications of interest" may be
recorded.
Delivery of A copy of the Prospectus and a Pricing
Prospectus: Supplement relating to a Book-Entry Note must
accompany or precede the earliest of any written offer of such Book-Entry Note,
confirmation of the purchase of such Book-Entry Note and payment for such
Book-Entry Note by its purchaser. If notice of a change in the terms of the
Book-Entry Notes is received by the Agent between the time an order for a
Book-Entry Note is placed and the time written confirmation thereof is sent by
the Presenting Agent to a customer or his agent, such confirmation shall be
accompanied by a Prospectus and Pricing Supplement setting forth the terms in
effect when the order was placed. Subject to "Suspension of Solicitation;
Amendment or Supplement" above, the Presenting Agent will deliver a Prospectus
and Pricing Supplement as herein described with respect to each Book-Entry Note
sold by it. The Company will make such delivery if such Book-Entry Note is sold
directly by the Company to a purchaser (other than an Agent).
Confirmation: For each order to purchase a Book-Entry Note
solicited by any Agent and accepted by or on behalf of the Company, the
Presenting Agent will issue a confirmation to the purchaser, with a copy to the
Company, setting forth the details set forth above and delivery and payment
instructions.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry Note and the authentication and
issuance of the Global Security representing such Book-Entry Note shall
constitute "settlement" with respect to such Book-Entry Note. All orders
accepted by the Company will be settled on the third Business Day following the
date of sale of such Book-Entry Note pursuant to the timetable for settlement
set forth below unless the Company and the purchaser agree to settlement on
another day which shall be no earlier than the Business Day following the date
of sale.
Settlement Settlement Procedures with regard to each
Procedures: Book-Entry Note sold by the Company through
any Agent, as agent, shall be as follows:
25
A. The Presenting Agent will advise the
Company by telephone of the following settlement information:
1. Rank (senior or subordinated).
2. Principal amount.
3. Maturity Date.
4. In the case of a Fixed Rate
Book-Entry Note, the interest rate or, in the case of a Floating Rate Book-Entry
Note, the Base Rate, initial interest rate (if known at such time), Index
Maturity, Interest Reset Period, Interest Reset Dates, Interest Determination
Dates, Spread and/or Spread Multiplier (if any), minimum interest rate (if any)
and maximum interest rate (if any).
5. Interest Payment Dates and the
Interest Payment Period.
6. Redemption or repayment provisions,
if any.
7. Settlement date.
8. Price.
9. The Presenting Agent's DTC
participant account number and commission, determined as provided in Section 2
of the Agency Agreement.
10. Whether such Book-Entry Note is
issued at an original issue discount and, if so, the total amount of OID, the
yield to maturity and the initial accrual period OID.
B. The Company will assign a CUSIP number to
the Global Security representing such Book-Entry Note and then advise the
Trustee and the Presenting Agent by telephone (confirmed in writing at any time
on the same date) or electronic transmission of the information set forth in
Settlement Procedure "A" above, such CUSIP number and the name of the Presenting
Agent. The Company will also notify the Presenting Agent by telephone of such
CUSIP number as soon as practicable.
C. The Trustee will enter a pending deposit
message through DTC's Participant Terminal System providing the settlement
information to DTC specified in the Letter of Representations from the Company
and the Trustee to DTC dated as of the date hereof.
26
D. To the extent the Company has not already
done so, the Company will deliver to the Trustee a Global Security in a form
that has been approved by the Company, the Agent and the Trustee.
E. The Trustee will complete such Global
Security, stamp the appropriate legend, as instructed by DTC, if not already set
forth thereon, and authenticate the Global Security representing such Book-Entry
Note in accordance with the terms of the written order of the Company then in
effect.
F. DTC will credit such Book-Entry Note to
the Trustee's participant account at DTC.
G. Upon delivery of the pending deposit
message referenced in "C" above, an SDFS deliver order through DTC's Participant
Terminal System will be created instructing DTC to debit such Book-Entry Note to
the Trustee's participant account and credit such Book-Entry Note to the
Presenting Agent's participant account and debit the Presenting Agent's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Book-Entry Note less the Presenting Agent's
commission. The entry of such a pending deposit message by First Chicago as
Trustee shall constitute a representation and warranty by First Chicago to DTC
that (i) the Global Security representing such Book-Entry Note has been issued
and authenticated and (ii) First Chicago is holding such Global Security
pursuant to the Medium-Term Note Certificate Agreement between First Chicago and
DTC.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant Terminal System instructing DTC (i) to
debit such Book-Entry Note to the Presenting Agent's participant account and
credit such Book-Entry Note to the participant accounts of the Participants with
respect to such Book-Entry Note and (ii) to debit the settlement accounts of
such Participants and credit the settlement account of the Presenting Agent for
an amount equal to the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in effect on the settlement date.
J. The Trustee will, upon receipt of funds
from the Agent in accordance with Settlement Procedure "G", credit to an account
of the Company maintained at First Chicago funds available for immediate use in
the amount transferred to the Trustee in accordance with Settlement Procedure
"G". However, the Trustee shall not credit the account of the Company unless and
until the Trustee has confirmed receipt of the funds
27
in the appropriate amount transferred in accordance with Settlement Procedure
"G".
K. The Presenting Agent will confirm the
purchase of such Book-Entry Note to the purchaser either by transmitting to the
Participants with respect to such Book-Entry Note a confirmation order or orders
through DTC's institutional delivery system or by mailing a written confirmation
to such purchaser.
Settlement For orders of Book-Entry Notes solicited by
Procedures any Agent and accepted by the Company for
Timetable: settlement on the Business Day after the sale
date, Settlement Procedures "A" through "K" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the day before
settlement
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:30 P.M. on settlement date
J-K 5:00 P.M. on settlement date
If a sale is to be settled more than one
Business Day after the sale date, Settlement Procedures "A", "B" and "C" shall
be completed as soon as practicable but no later than 11:00 A.M. and 12:00 Noon
on the first Business Day after the sale date and no later than 2:00 P.M. on the
Business Day before the settlement date, respectively. If the initial interest
rate for a Floating Rate Book-Entry Note has not been determined at the time
that Settlement Procedure "A" is completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has been determined but no later than
12:00 Noon and 2:00 P.M., respectively, on the second Business Day before the
settlement date. Settlement Procedure "I" is subject to extension in accordance
with any extension of Fedwire closing
28
deadlines and in the other events specified in SDFS operating procedures in
effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancelation message to such effect by no later
than 2:00 P.M. on the Business Day immediately preceding the scheduled
settlement date.
Failure to Settle: If the Trustee has not entered an SDFS
deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure
"G", then, upon written request (which may be by telecopy) of the Company, the
Trustee shall deliver to DTC, through DTC's Participant Terminal System, as soon
as practicable, a withdrawal message instructing DTC to debit such Book-Entry
Note to the Trustee's participant account. DTC will process the withdrawal
message, provided that the Trustee's participant account contains a principal
amount of the Global Security representing such Book-Entry Note that is at least
equal to the principal amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Notes represented by a Global
Security, the Trustee will cancel such Global Security in accordance with the
applicable Indenture and so advise the Company, and will make appropriate
entries in its records. The CUSIP number assigned to such Global Security shall,
in accordance with CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal message is processed with respect to one
or more, but not all, of the Book-Entry Notes represented by a Global Security,
the Trustee will exchange such Book-Entry Note for two Global Securities, one of
which shall represent such Book-Entry Notes and shall be canceled immediately
after issuance and the other of which shall represent the other Book-Entry Notes
previously represented by the surrendered Global Security and shall bear the
CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Note
is not timely paid to the Participants with respect to such Note by the
beneficial purchaser thereof (or a Person, including an indirect participant in
DTC, acting on behalf of such purchaser), such Participants and, in turn, the
Presenting Agent may enter SDFS deliver orders through DTC's Participant
Terminal System debiting such Note to such Agent's participant account and
crediting such Note free to the participant account of the Trustee and shall
notify the Trustee and the Company thereof. Thereafter, the Trustee (i) will
immediately notify the Company thereof, once the Trustee has confirmed that such
Note has been credited to its participant account, and the Company shall
immediately transfer by Fedwire (immediately available funds) to such Agent an
amount equal to the price of such Note which was previously credited to the
account of the Company maintained at First Chicago or wire transferred at the
Company's direction in accordance with Settlement Procedure J and (ii) the
Trustee will
29
deliver the withdrawal message and take the related actions described in the
preceding paragraph. If such failure shall have occurred for any reason other
than a default by the Presenting Agent in the performance of its obligations
hereunder and under the Agency Agreement, then the Company will reimburse the
Presenting Agent or the Trustee, as applicable, on an equitable basis for the
loss of the use of the funds during the period when they were credited to the
account of the Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating procedures then in effect. In the event of a
failure to settle with respect to one or more, but not all, of the Book-Entry
Notes to have been represented by a Global Security, the Trustee will provide,
in accordance with Settlement Procedure "E", for the authentication and issuance
of a Global Security representing the other Book-Entry Notes to have been
represented by such Global Security and will make appropriate entries in its
records.
Trustee and First Nothing herein shall be deemed to require the
Chicago Not to Risk Trustee or First Chicago to risk or expend
Funds: its own funds in connection with any payment
to the Company, DTC, the Agent or the purchaser, it being understood by all
parties that payments made by the Trustee or First Chicago to the Company, DTC,
the Agent or the purchaser shall be made only to the extent that funds are
provided to the Trustee or First Chicago for such purpose.
Authenticity of The Company will cause the Trustee to furnish
Signatures: the Agent from time to time with the specimen
signatures of each of the Trustee's officers, employees or agents who has been
authorized by the Trustee to authenticate Book-Entry Notes, but no Agent will
have any obligation or liability to the Company or the Trustee in respect of the
authenticity of the signature of any officer, employee or agent of the Company
or the Trustee on any Book-Entry Note.
Payment of The Agent shall forward to the Company, on a
Expenses: monthly basis, a statement of the
out-of-pocket expenses incurred by such Agent during that month that are
reimbursable to it pursuant to the terms of the Agency Agreement. The Company
will remit payment to the Agent currently on a monthly basis.
Advertising The Company will determine with the Agent the
Costs: amount of advertising that may be appropriate
in soliciting offers to purchase the Book-Entry Notes. Advertising expenses will
be paid by the Company.
Periodic Statements Periodically, upon written request, the
from the Trustee: Trustee will send to the Company a statement
30
setting forth the principal amount of Book-Entry Notes Outstanding as of that
date and setting forth a brief description of any sales of Book-Entry Notes
which the Company has advised the Trustee but which have not yet been settled.
PART II
Administrative Procedures for Certificated Notes
The Trustee will serve as registrar and transfer agent and
authenticating and paying agent in connection with the Certificated Notes.
Issuance: Each Certificated Note will be dated and
issued as of the date of its authentication by the Trustee. Each Certificated
Note will bear an Original Issue Date, which will be (i) with respect to an
original Certificated Note (or any portion thereof), its original issuance date
(which will be the settlement date) and (ii) with respect to any Certificated
Note (or portion thereof) issued subsequently upon transfer or exchange of a
Certificated Note or in lieu of a destroyed, lost or stolen Certificated Note,
the Original Issue Date of the predecessor Certificated Note, regardless of the
date of authentication of such subsequently issued Certificated Note.
Registration: Certificated Notes will be issued only in
fully registered form without coupons.
Transfers and A Certificated Note may be presented for
Exchanges: transfer or exchange at the office of the
Trustee at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, N.Y. 10005, Attention:
Corporate Trust Services. Certificated Notes will be exchangeable for other
Certificated Notes having identical terms but different authorized denominations
without service charge. Certificated Notes will not be exchangeable for
Book-Entry Notes.
Maturities: Each Certificated Note will mature nine
months or more from its date of issue.
Denominations: The denomination of any Certificated Note
denominated in U.S. dollars will be a minimum of $100,000 or any amount in
excess thereof that is an integral multiple of $1,000. The authorized
denominations of Certificated Notes denominated in any other currency will be
specified pursuant to "Settlement Procedures" below.
Interest: General. Interest, if any, on each
Certificated Note will accrue from the original issue date for the first
interest period or the last date to which interest has been paid, if any, for
each subsequent interest period, and will be calculated and paid in the manner
described in such Note and in the Prospectus, as supplemented by the applicable
Pricing
31
Supplement. Unless otherwise specified therein, each payment of interest on a
Certificated Note will include interest accrued to but excluding the Interest
Payment Date or to but excluding Maturity.
Regular Record Dates. The Regular Record
Dates with respect to any Interest Payment Date for Floating Rate Certificated
Notes shall be the date fifteen calendar days immediately preceding such
interest Payment Date, and for Fixed Rate Certificated Notes shall be the April
15 or October 15 next preceding such Interest Payment Date, whether or not such
date shall be a Business Day.
Fixed Rate Certificated Notes. Unless
otherwise specified pursuant to Settlement Procedure "A" below, interest
payments on Fixed Rate Certificated Notes will be made semiannually on May 1 and
November 1 of each year and at Maturity; provided, however, that in the case of
a Fixed Rate Certificated Note issued between a Regular Record Date and an
Interest Payment Date, or on an Interest Payment Date, the first interest
payment will be made on the Interest Payment Date following the next succeeding
Regular Record Date. If any Interest Payment Date for or the Maturity of a Fixed
Rate Certificated Note is not a Business Day, the payment due on such day shall
be made on the next succeeding Business Day and no interest shall accrue on such
payment for the period from and after such Interest Payment Date or Maturity, as
the case may be.
Floating Rate Certificated Notes. Interest
payments will be made on Floating Rate Certificated Notes monthly, quarterly,
semi-annually or annually. Interest will be payable, in the case of Floating
Rate Certificated Notes with a monthly Interest Payment Period, on the third
Wednesday of each month; with a quarterly interest Payment Period, on the third
Wednesday of March, June, September and December of each year; with a
semi-annual Interest Payment Period, on the third Wednesday of the two months
specified pursuant to Settlement Procedure "A" below; and with an annual
Interest Payment Period, on the third Wednesday of the month specified pursuant
to Settlement Procedure "A" below; provided, however, that if an Interest
Payment Date for a Floating Rate Certificated Note would otherwise be a day that
is not a Business Day with respect to such Floating Rate Certificated Note, such
Interest Payment Date will be the next succeeding Business Day with respect to
such Floating Rate Certificated Note, except in the case of a Floating Rate
Certificated Note for which the Base Rate is LIBOR, if such Business Day is in
the next succeeding calendar month, such Interest Payment Date will be the
immediately preceding Business Day; and provided further, that in the case of a
Floating Rate Certificated Note issued between a Regular Record Date and an
Interest Payment Date or on an Interest Payment Date, the first interest payment
will be made on the Interest Payment Date following the next succeeding Regular
Record Date.
32
Calculation of Fixed Rate Certificated Note. Interest on
Interest: Fixed Rate Certificated Notes (including
interest for partial periods) will be calculated on the basis of a 360-day year
of twelve 30-day months.
Floating Rate Certificated Notes. Interest
rates on Floating Rate Certificated Notes will be determined as set forth in the
form of Notes. Interest on Floating Rate Certificated Notes, except as otherwise
set forth therein, will be calculated on the basis of actual days elapsed and a
year of 360 days, except that in the case of a Floating Rate Certificated Note
for which the Base Rate is the Treasury Rate or the CMT Rate, interest will be
calculated on the basis of the actual number of days in the year.
Payments of On or before the due date for any payment of
Principal and principal or interest on each Certificated
Interest: Note, the Company will pay to the Trustee, as
paying agent, the amount of principal and/or interest then due. The Trustee will
pay the principal amount of each Certificated Note at Maturity upon presentation
of such Certificated Note to the Trustee. Such payment, together with payment of
interest due at Maturity of such Certificated Note, will be made in funds
available for immediate use by the Trustee and in turn by the Holder of such
Certificated Note. Certificated Notes presented to the Trustee at Maturity for
payment will be canceled by the Trustee in accordance with the applicable
Indenture. All interest payments on a Certificated Note (other than interest due
at Maturity) will be made by check drawn on the Trustee or another Person
appointed by the Trustee mailed by the Trustee to the Person entitled thereto as
provided in such Note and the applicable Indenture; provided, however, that the
holder of $10,000,000 (or the equivalent thereof in other currencies) or more of
Certificated Notes with similar tenor and terms will be entitled to receive
payment by wire transfer in U.S. dollars upon receipt of written instructions by
the Trustee. Following each Regular Record Date and Special Record Date, the
Trustee will furnish the Company with a list of interest payments to be made on
the following Interest Payment Date for each group of Certificated Notes bearing
interest at a particular rate and in total for all Certificated Notes. Interest
at Maturity will be payable to the Person to whom the payment of principal is
payable. The Trustee will provide, on or about the last Business Day of each
month, to the Company lists of principal and interest, to the extent
ascertainable, to be paid on Certificated Notes maturing (on a Maturity or
Redemption Date or otherwise) in the next two months.
First Chicago will be responsible for
withholding taxes on interest paid on Certificated Notes as required by
applicable law.
33
Procedure for Rate The Company and the Agents will discuss from
Setting and time to time the aggregate principal amount
Posting: of, the issuance price of, and the interest
rates to be borne by, Notes that may be sold as a result of the solicitation of
orders by the Agents. If the Company decides to set prices of, and rates borne
by, any Notes in respect of which the Agents are to solicit orders (the setting
of such prices and rates to be referred to herein as "posting") or if the
Company decides to change prices or rates previously posted by it, it will
promptly advise the Agents of the prices and rates to be posted.
Acceptance and Unless otherwise instructed by the Company,
Rejection of orders: each Agent will advise the Company promptly
by telephone of all orders to purchase Certificated Notes received by such
Agent, other than those rejected by it in whole or in part in the reasonable
exercise of its discretion. Unless otherwise agreed by the Company and the
Agents, the Company has the sole right to accept orders to purchase Certificated
Notes and may reject any such orders in whole or in part.
Preparation of If any order to purchase a Certificated Note
Pricing is accepted by or on behalf of the Company,
Supplement: the Company will prepare a Pricing Supplement
reflecting the terms of such Certificated Note and will arrange to have ten
copies thereof filed with the Commission in accordance with the applicable
paragraph of Rule 424(b) under the Act and will supply at least ten copies
thereof (and additional copies if requested) to the Presenting Agent at the
address set forth on Schedule I hereto, to be delivered by overnight courier or
telecopy to arrive no later than 11:00 a.m., New York City time, on the Business
Day following the sale date. The Presenting Agent will cause a Prospectus and
Pricing Supplement to be delivered to the purchaser of such Certificated Note.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the Pricing Supplement to Prospectuses
prior to their use. Outdated Pricing Supplements (other than those retained for
files), will be destroyed.
Suspension of Subject to the Company's representations,
Solicitation; warranties and covenants contained in the
Amendment or Agency Agreement, the Company may instruct
Supplement: the Agents to suspend at any time for any
period of time or permanently, the solicitation of orders to purchase
Certificated Notes. Upon receipt of such instructions, the Agents will forthwith
suspend
34
solicitation until such time as the Company has advised them that such
solicitation may be resumed.
In the event that at the time the Company
suspends solicitation of purchases there shall be any orders outstanding for
settlement, the Company will promptly advise the Agents and the Trustee whether
such orders may be settled and whether copies of the Prospectus as in effect at
the time of the suspension, together with the appropriate Pricing Supplement,
may be delivered in connection with the settlement of such orders. The Company
will have the sole responsibility for such decision and for any arrangements
that may be made in the event that the Company determines that such orders may
not be settled or that copies of such Prospectus may not be so delivered.
If the Company decides to amend or supplement
the Registration Statement or the Prospectus, it will promptly advise the Agents
and furnish the Agents with the proposed amendment or supplement and with such
certificates and opinions as are required, all to the extent required by and in
accordance with the terms of the Agency Agreement. Subject to the provisions of
the Agency Agreement, the Company may file with the Commission any supplement to
the Prospectus relating to the Notes. The Company will provide the Agents and
the Trustee with copies of any such supplement, and confirm to the Agents that
such supplement has been filed with the Commission pursuant to the applicable
paragraph of Rule 424(b).
Procedure for When the Company has determined to change the
Rate Changes: interest rates of Certificated Notes being
offered, it will promptly advise the Agents and the Agents will forthwith
suspend solicitation of orders. The Agents will telephone the Company with
recommendations as to the changed interest rates. At such time as the Company
has advised the Agents of the new interest rates, the Agents may resume
solicitation of orders. Until such time only "indications of interest" may be
recorded.
35
Delivery of A copy of the Prospectus and a Pricing
Prospectus: Supplement relating to a Certificated Note
must accompany or precede the earliest of any written offer of such Certificated
Note, confirmation of the purchase of such Certificated Note and payment for
such Certificated Note by its purchaser. If notice of a change in the terms of
the Certificated Notes is received by the Agents between the time an order for a
Certificated Note is placed and the time written confirmation thereof is sent by
the Presenting Agent to a customer or his agent, such confirmation shall be
accompanied by a Prospectus and Pricing Supplement setting forth the terms in
effect when the order was placed. Subject to "Suspension of Solicitation;
Amendment or Supplement" above, the Presenting Agent will deliver a Prospectus
and Pricing Supplement as herein described with respect to each Certificated
Note sold by it. The Company will make such delivery if such Certificated Note
is sold directly by the Company to a purchaser (other than any Agent).
Confirmation: For each order to purchase a Certificated
Note solicited by any Agent and accepted by or on behalf of the Company, the
Presenting Agent will issue a confirmation to the purchaser, with a copy to the
Company, setting forth the details set forth above and delivery and payment
instructions.
Settlement: The receipt by the Company of immediately
available funds in exchange for an authenticated Certificated Note delivered to
the Presenting Agent and the Presenting Agent's delivery of such Certificated
Note against receipt of immediately available funds shall, with respect to such
Certificated Note, constitute "settlement". All orders accepted by the Company
will be settled on the third Business Day following the date of sale pursuant to
the timetable for settlement set forth below, unless the Company and the
purchaser agree to settlement on another day which shall be no earlier than the
next Business Day following the date of sale.
Settlement Settlement Procedures with regard to each
Procedures: Certificated Note sold by the Company through
any Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the
Company by telephone of the following settlement information:
1. Name in which such Certificated Note
is to be registered ("Registered Owner").
2. Address of the Registered Owner and
address for payment of principal and interest.
3. Taxpayer identification number of
the Registered Owner (if available).
4. Rank (senior or subordinated).
36
5. Principal amount.
6. Maturity Date.
7. In the case of a Fixed Rate
Certificated Note, the interest rate or, in the case of a Floating Rate
Certificated Note, the initial interest rate (if known at such time), Base Rate,
Index Maturity, Interest Reset Period, Interest Reset Dates, Interest
Determination Dates, Spread and/or Spread Multiplier (if any), minimum interest
rate (if any) and maximum interest rate (if any).
8. Interest Payment Dates and the
Interest Payment Period.
9. Specified Currency and whether the
option to elect payment in a Specified Currency applies and if the Specified
Currency is not U.S. dollars, the authorized denominations.
10. Redemption or repayment provisions,
if any.
11. Settlement date.
12. Price (including currency).
13. Presenting Agent's commission,
determined as provided in Section 2 of the Agency Agreement.
14. Whether such Certificated Note is
issued at an original issue discount, and, if so, the total amount of OID, the
yield to maturity and the initial accrual period OID.
B. The Company will advise the Trustee by
telephone (confirmed in writing at any time on the sale date) or electronic
transmission of the information set forth in Settlement Procedure "A" above and
the name of the Presenting Agent.
C. The Company will deliver to the Trustee an
original Certificated Note with customer confirmation in triplicate in forms
that have been approved by Company, the Agents and the Trustee.
D. The Trustee will complete such
Certificated Note and will authenticate such Certificated Note and deliver it
(with the confirmation) and two copies thereof (clearly marked as such) to the
Presenting Agent, and the Presenting Agent will acknowledge receipt of the Note
by stamping or otherwise marking the first copy and returning it to the
37
Trustee. Such delivery will be made only against such acknowledgment of receipt.
In the event that the instructions given by the Presenting Agent for payment to
the account of the Company are revoked, the Company will as promptly as possible
wire transfer to the account of the Presenting Agent an amount of immediately
available funds equal to the amount of such payment made.
E. The Presenting Agent will deliver such
Certificated Note (with the confirmation) to the customer against payment in
immediately payable funds. The Presenting Agent will obtain the acknowledgment
of receipt of such Certificated Note by retaining the second copy thereof.
F. The Trustee will send a third copy of the
Certificated Note (clearly marked as such) to the Company by first-class mail.
Settlement For orders of Certificated Notes solicited by
Procedures any Agent, as agent, and accepted by the
Timetable: Company, Settlement Procedures "A" through
"F" set forth above shall be completed on or before the respective times (New
York City time) set forth below:
Settlement
Procedure Time
--------- ----
A 2:00 P.M. on the day before
settlement
B-C 3:00 P.M. on the day before
settlement
D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
Failure to If a purchaser fails to accept delivery of
Settle: and make payment for any Certificated Note,
the Presenting Agent will notify the Company and the Trustee by telephone and
return such Certificated Note to the Trustee. Upon receipt of such notice, the
Company will immediately wire transfer to the account of the Presenting Agent an
amount equal to the amount previously credited to the account of Company in
respect of such Certificated Note. Such wire transfer will be made on the
settlement date, if possible, and in any event not later than the Business Day
following the settlement date. If the failure shall have occurred for any reason
other than a default by the Presenting Agent in the performance of its
obligations hereunder and under the Agency Agreement, then the Company will
reimburse the Presenting Agent on an equitable basis for its loss of the use of
the funds during the period when they were credited
38
to the account of the Company. Immediately upon receipt of the Certificated Note
in respect of which such failure occurred, the Trustee will cancel such
Certificated Note in accordance with the applicable Indenture and so advise the
Company and will make appropriate entries in its records.
Trustee Not to Risk Nothing herein shall be deemed to require the
Funds: Trustee or First Chicago to risk or expend
its own funds in connection with any payment to the Company, the Agents or the
purchaser, it being understood by all parties that payments made by the Trustee
to the Company, the Agents or the purchaser shall be made only to the extent
that funds are provided to the Trustee for such purpose.
Authenticity of The Company will cause the Trustee to furnish
Signatures: the Agents from time to time with the
specimen signatures of each of the Trustee's officers, employees or agents who
has been authorized by the Trustee to authenticate Certificated Notes, but no
Agent will have any obligation or liability to the Company or the Trustee in
respect of the authenticity of the signature of any officer, employee or agent
of the Company or the Trustee on any Certificated Note.
Payment of Each Agent shall forward to the Company, on a
Expenses: monthly basis, a statement of the
out-of-pocket expenses incurred by such Agent during that month that are
reimbursable to it pursuant to the terms of the Agency Agreement. The Company
will remit payment to the Agents currently on a monthly basis.
Advertising Costs: The Company will determine with the Agents
the amount of advertising that may be appropriate in soliciting orders to
purchase the Certificated Notes. Advertising expenses will be paid by the
Company.
Periodic Statements Periodically, upon written request, the
from the Trustee: Trustee will send to the Company a statement
setting forth the principal amount of Certificated Notes Outstanding as of that
date and setting forth a brief description of any sales of Certificated Notes of
which the Company has advised the Trustee but which have not yet been settled.
39