-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CVBvGL++i1I5qpkzExvociWvHhwxRP/Qa2mkhWhJUPMPO8IYWl28wzkPrq/nKkUl M6DJd5rCJggXVYbG/34kwQ== 0000025191-01-000017.txt : 20010223 0000025191-01-000017.hdr.sgml : 20010223 ACCESSION NUMBER: 0000025191-01-000017 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20010214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COUNTRYWIDE CREDIT INDUSTRIES INC CENTRAL INDEX KEY: 0000025191 STANDARD INDUSTRIAL CLASSIFICATION: MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162] IRS NUMBER: 132641992 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-55536 FILM NUMBER: 1538913 BUSINESS ADDRESS: STREET 1: 4500 PARK GRANADA BLVD CITY: CALABASAS STATE: CA ZIP: 91302 BUSINESS PHONE: 8182253000 MAIL ADDRESS: STREET 1: 4500 PARK GRANADA BLVD CITY: CALABASAS STATE: CA ZIP: 91302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COUNTRYWIDE HOME LOANS INC CENTRAL INDEX KEY: 0000814509 STANDARD INDUSTRIAL CLASSIFICATION: MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162] IRS NUMBER: 132631719 STATE OF INCORPORATION: NY FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-55536-01 FILM NUMBER: 1538914 BUSINESS ADDRESS: STREET 1: 4500 PARK GRANADA BLVD CITY: CALABASAS STATE: CA ZIP: 91302 BUSINESS PHONE: 8182253000 MAIL ADDRESS: STREET 1: 4500 PARK GRANADA CITY: CALABASAS STATE: CA ZIP: 91302 FORMER COMPANY: FORMER CONFORMED NAME: COUNTRYWIDE FUNDING CORP DATE OF NAME CHANGE: 19931018 S-3 1 0001.txt FORM S-3 As filed with the Securities and Exchange Commission on February 13, 2001 Registration Nos. 333- and 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------------- FORM S-3 Registration Statement Under The Securities Act of 1933 ----------------------------------- Countrywide Credit Industries, Inc. Countrywide Home Loans, Inc. (Exact name of registrants as specified in their charters) ----------------------------------- Delaware New York (State or other jurisdiction of (State or other jurisdiction incorporation or organization) of incorporation or organization) 13-2641992 13-2631719 (I.R.S. Employer (I.R.S. Employer Identification No.) Identification No.) 4500 Park Granada Calabasas, CA 91302 (818) 225-3000 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices) Sandor E. Samuels General Counsel Countrywide Credit Industries, Inc. and Countrywide Home Loans, Inc. 4500 Park Granada Calabasas, CA 91302 (818) 225-3000 (Name, address, including zip code, and telephone number, including area code, of agent for service) ----------------------------------- Copies to: Michael J. O'Sullivan Edward J. Fine Munger, Tolles & Olson LLP Brown & Wood LLP 355 South Grand Avenue, 35th Floor One World Trade Center Los Angeles, California 90071 New York, New York 10048 (213) 683-9100 (212) 839-5300 ----------------------------------- Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement, as determined by market conditions. ----------------------------------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. || If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| (Continued on next page) ----------------------------------- The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Continued from previous page) If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. | | If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. | | If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. | | CALCULATION OF REGISTRATION FEE ================================================ =============== ============== ================== =============== Proposed Proposed Maximum Maximum Maximum Aggregate Amount of Title of each Class of Securities Amount to be Offering Offering Price Registration to be Registered(1) Registered(2)(3) Price per (4) Fee Unit --------------- ------------------ --------------- - ------------------------------------------------ --------------- -------------- ------------------ --------------- Common Stock, par value $.05 per share(5) Preferred Stock, par value $.05 per share Stock Purchase Contracts Debt Securities............................ $5,500,000,000 (6) $5,500,000,000(7) $1,375,000 - ------------------------------------------------ --------------- -------------- ------------------ --------------- - ------------------------------------------------ --------------- -------------- ------------------ --------------- Guarantees of Debt Securities.............. $5,500,000,000 (8) (9) None - ------------------------------------------------ --------------- -------------- ------------------ --------------- - ------------------------------------------------ --------------- -------------- ------------------ --------------- Debt Securities and Guarantees to be sold in market-making transactions(9).............. -- -- -- -- ================================================ =============== ============== ================== ===============
(1) Also includes (i) such indeterminate number of shares of Common Stock and Preferred Stock as may be issued upon (a) conversion of or exchange for other shares of Preferred Stock or Debt Securities to the extent such other shares of Preferred Stock or Debt Securities provide for conversion into or exchange for shares of Common Stock or Preferred Stock, or (b) exercise of any Stock Purchase Contracts, (ii) such indeterminate principal amount of Debt Securities and related Guarantees of such Debt Securities as may be issued upon conversion of or exchange for shares of Preferred Stock or other Debt Securities and related Guarantees of such Debt Securities to the extent such shares of Preferred Stock and other Debt Securities and related Guarantees of such Debt Securities provide for conversion into or exchange for Debt Securities and related Guarantees of such Debt Securities and (iii) Stock Purchase Contracts that may be offered as part of Units of Stock Purchase Contracts and other Securities registered hereby. (2) Or, if any Debt Securities are issued at an Original Issue Discount, such greater amount as shall result in an aggregate public offering price not in excess of $5,500,000,000. (3) In U.S. dollars or the equivalent thereof in one or more foreign currencies or currency units or composite currencies. (4) $500,000,000 aggregate principal amount of securities registered under Registration No. 333-58125 and 333-58125-01 referred to below and not previously sold is carried forward in this Registration Statement pursuant to Rule 429. A registration fee of $125,000 in connection with such unsold amount of securities was paid previously under the foregoing Registration Statement. (5) This Registration Statement also applies to associated Preferred Stock purchase rights under the stockholders' rights agreement of Countrywide Credit Industries, Inc., which, prior to the occurrence of certain events, are attached to and tradable only with the shares of Common Stock registered hereby. No registration fee is required for such Preferred Stock purchase rights, as they will be issued for no additional consideration. (6) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). (7) Not specified as to each class of Securities to be registered pursuant to General Instruction II-D of Form S-3. (8) No separate consideration will be received for the Guarantees of Debt Securities. (9) This Registration Statement registers an indeterminate principal amount of Debt Securities and related Guarantees of such Debt Securities to be sold by Countrywide Securities Corporation in market-making transactions where required. ----------------------------------- PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS AND FORM OF PROSPECTUS SUPPLEMENT INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS AND RELATES ALSO TO $500,000,000 OF SECURITIES REGISTERED AND REMAINING UNISSUED UNDER REGISTRATION NO. 333-58125 AND 333-58125-01, AS PREVIOUSLY FILED BY THE REGISTRANTS AND DECLARED EFFECTIVE BY THE COMMISSION ON JULY 16, 1998. EXPLANATORY NOTE Inclusion of Base Prospectus and Prospectus Supplement This Registration Statement contains a base prospectus to be used in connection with offerings by Countrywide Credit Industries, Inc. of its common stock, preferred stock and stock purchase contracts and by Countrywide Home Loans, Inc. of its debt securities guaranteed by Countrywide Credit Industries, Inc. This Registration Statement also contains a form of prospectus supplement to such base prospectus to be used in connection with offerings by Countrywide Home Loans, Inc. of its Medium-Term Notes, Series J, guaranteed by Countrywide Credit Industries, Inc. 48 The information in this prospectus supplement and the accompanying prospectus is not complete and may be changed. This prospectus supplement and accompanying prospectus supplement are not an offer to sell these securities and are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS SUPPLEMENT (To Prospectus Dated , 2001) $6,000,000,000 COUNTRYWIDE HOME LOANS, INC. Medium-Term Notes, Series J Unconditionally Guaranteed by [COUNTRYWIDE CREDIT INDUSTRIES, INC. LOGO] - -------------------------------------------------------------------------------- This is a public offering to be conducted on a continuous basis by Countrywide Home Loans, Inc. of Medium-Term Notes, Series J. Countrywide Home Loans, Inc. plans to issue Notes with the general terms described below. The final terms for each Note will be described in a pricing supplement prepared at the time the Notes are offered for sale. o The Notes will mature 9 months or more from their date of issue. o The Notes may be subject to redemption or repayment at the option of Countrywide Home Loans, Inc. or the holder. o The Notes will bear interest at either a fixed or floating rate. Interest will be paid on the Notes on the dates specified in the pricing supplement. o The Notes will be denominated in U.S. dollars or such foreign currencies as Countrywide Home Loans, Inc. may designate in the pricing supplement. o The Notes will be unsecured and unsubordinated indebtedness of Countrywide Home Loans, Inc. and will rank equally with its other unsecured and unsubordinated indebtedness. o Countrywide Credit Industries, Inc., the parent company of Countrywide Home Loans, Inc., will guarantee the payment of principal, premium, if any, and interest on the Notes. The guarantee will be an unsecured and unsubordinated obligation of Countrywide Credit Industries, Inc. Investing in the Notes involves certain risks. See "Risk Factors" beginning on page S-3. Unless stated differently in the pricing supplement, the pricing terms of the Notes will be: Per Note Total Public Offering Price.................................................... 100.000% $6,000,000,000 Commission or Discount................................................... .125%-.75% $7,500,000-$45,000,000 Proceeds to Countrywide Home Loans, Inc.................................. 99.875%-99.25% $5,992,500,000-$5,955,000,000
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense. If Countrywide Home Loans, Inc. or Countrywide Credit Industries, Inc. sell other securities referred to in the accompanying prospectus, the amount of Notes that Countrywide Home Loans, Inc. may offer and sell under this prospectus supplement will be reduced. Countrywide Home Loans, Inc. may sell the Notes to the agents referred to below as principals for resale at varying or fixed offering prices or through such agents as agents using their reasonable best efforts to sell the Notes on behalf of Countrywide Home Loans, Inc. Countrywide Home Loans, Inc. also may sell the Notes directly to investors. Countrywide Home Loans, Inc. will deliver the Notes in either certificated form or through the book-entry facilities of The Depository Trust Company, as described in the pricing supplement. - -------------------------------------------------------------------------------- LEHMAN BROTHERS BANC OF AMERICA SECURITIES LLC DEUTSCHE BANC ALEX. BROWN GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. JP MORGAN MORGAN STANLEY DEAN WITTER SALOMON SMITH BARNEY COUNTRYWIDE SECURITIES CORPORATION , 2001 S-32 TABLE OF CONTENTS PROSPECTUS SUPPLEMENT Page Risk Factors............................................... ......... S-3 Description of Notes................................................. S-5 Certain Federal Income Tax Consequences.............................. S-26 Plan of Distribution of Notes........................................ S-30 Validity of Notes................................................... S-32 PROSPECTUS Page Additional Information................................................ 2 Countrywide Credit Industries and Countrywide Home Loans.............. 3 Use of Proceeds....................................................... 5 Selected Consolidated Financial Data.................................. 6 Description of Capital Stock.......................................... 8 Description of Stock Purchase Contracts and Stock Purchase Units....... 10 Description of Debt Securities of Countrywide Home Loans and Related Guarantees of Countrywide Credit Industries...................................... 10 Plan of Distribution.................................................. 25 Validity of Securities................................................ 26 Experts............................................................... 27 ---------------- You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. Countrywide Home Loans, Inc. and Countrywide Credit Industries, Inc. have not, and the agents have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Countrywide Home Loans, Inc. and Countrywide Credit Industries, Inc. are not, and the agents are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement and the accompanying prospectus is accurate as of the date on the front cover of this prospectus supplement only. The business, financial condition, results of operations and prospects of Countrywide Home Loans, Inc. and Countrywide Credit Industries, Inc. may have changed since that date. References in this prospectus supplement to "Countrywide Credit Industries" are to Countrywide Credit Industries, Inc. and its consolidated subsidiaries. References in this prospectus supplement to "Countrywide Home Loans" are to Countrywide Home Loans, Inc. and its consolidated subsidiaries. RISK FACTORS Your investment in the Notes will include certain risks. In consultation with your own financial and legal advisers, you should carefully consider, among other matters, the following discussion of risks before deciding whether an investment in the Notes is suitable for you. Structure Risks General If you invest in Notes indexed to one or more interest rate, currency or other indices or formulas, there will be significant risks not associated with a conventional fixed rate or floating rate debt security. These risks include fluctuation of the indices or formulas and the possibility that you will receive a lower (or no) amount of principal, premium or interest and at different times than you expected. Countrywide Home Loans has no control over a number of matters, including economic, financial and political events, that are important in determining the existence, magnitude and longevity of such risks and their results. In addition, if an index or formula used to determine any amounts payable in respect of the Notes contains a multiplier or leverage factor, the effect of any change in such index or formula will be magnified. In recent years, values of certain indices and formulas have been volatile and volatility in those and other indices and formulas may be expected in the future. However, past experience is not necessarily indicative of what may occur in the future. Redemption If your Notes are redeemable at the option of Countrywide Home Loans or are otherwise subject to mandatory redemption, Countrywide Home Loans may choose to redeem (in the case of optional redemption) or must redeem (in the case of mandatory redemption) your Notes at times when prevailing interest rates may be relatively low. At those times, you generally will not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as that of the Notes. Uncertain Trading Markets Countrywide Home Loans cannot assure you that a trading market for your Notes will ever develop or be maintained. Many factors independent of the creditworthiness of Countrywide Home Loans affect the trading market. These factors include: o complexity and volatility of any index or formula applicable to the Notes, o method of calculating the principal, premium and interest in respect of the Notes, o time remaining to the maturity of the Notes, o outstanding amount of the Notes, o redemption features of the Notes, o amount of other debt securities linked to any index or formula applicable to the Notes, and o level, direction and volatility of market interest rates generally. In addition, certain Notes may have a more limited trading market and experience more price volatility because they were designed for specific investment objectives or strategies. There may be a limited number of buyers when you decide to sell those Notes. This may affect your ability to sell those Notes at all or the price you receive for those Notes if you choose to sell them prior to maturity. You should not purchase Notes unless you understand and know you can bear the foregoing investment risks. Exchange Rates and Exchange Controls If you invest in Notes that are denominated and/or payable in a currency other than U.S. dollars ("Foreign Currency Notes"), there will be significant risks not associated with an investment in a debt security denominated and payable in U.S. dollars, including the possibility of material changes in the exchange rate between U.S. dollars and your payment currency and the imposition or modification of exchange controls by the applicable governments. Countrywide Home Loans has no control over the factors that generally affect these risks, such as economic, financial and political events and the supply and demand for the applicable currencies. Moreover, if payments on your Foreign Currency Notes are determined by reference to a formula containing a multiplier or leverage factor, the effect of any change in the exchange rates between the applicable currencies will be magnified. In recent years, exchange rates between certain currencies have been highly volatile and volatility between such currencies or with other currencies may be expected in the future. Fluctuations between currencies in the past are not necessarily indicative, however, of fluctuations that may occur in the future. Depreciation of your payment currency would result in a decrease in the U.S. dollar equivalent yield of your Foreign Currency Notes, in the U.S. dollar equivalent value of the principal and any premium payable at maturity or earlier redemption of your Foreign Currency Notes and, generally, in the U.S. dollar equivalent market value of your Foreign Currency Notes. Governmental exchange controls could affect exchange rates and the availability of your payment currency on a required payment date. Even if there are no exchange controls, it is possible that your payment currency will not be available on a required payment date because of circumstances beyond the control of Countrywide Home Loans. In such cases, Countrywide Home Loans will be allowed to satisfy its obligations in respect of your Foreign Currency Notes in U.S. dollars. You should consult your financial and legal advisors about the risks associated with Foreign Currency Notes. You should not purchase such Notes if you are unsophisticated with regard to foreign currency transactions. Credit Ratings The credit ratings of this medium-term note program may not reflect the potential impact of all risks related to structure and other factors on the value of your Notes. In addition, actual or anticipated changes in the credit ratings of Countrywide Home Loans will generally affect the market value of your Notes. DESCRIPTION OF NOTES The following description of the particular terms of the Notes offered hereby supplements and, to the extent inconsistent with, replaces the description of the general terms and provisions of the Countrywide Home Loans debt securities and Countrywide Credit Industries guarantees under the caption "Description of Debt Securities of Countrywide Home Loans and Related Guarantees of Countrywide Credit Industries" in the accompanying Prospectus, to which description reference is hereby made. Unless otherwise specified in a Pricing Supplement, the terms of the Notes will be as set forth below. General The Notes will be issued as a series of debt securities of Countrywide Home Loans limited to U.S. $6,000,000,000, or its equivalent in one or more foreign currencies or currency units, aggregate initial offering price under an Indenture dated as of January 1, 1992, as amended, supplemented or modified from time to time, including Supplemental Indenture No. 1 thereto dated as of June 15, 1995 (collectively, the "Indenture"), among Countrywide Home Loans, Countrywide Credit Industries, as guarantor, and The Bank of New York, as trustee (the "Trustee"), which is described more fully under "Description of Debt Securities of Countrywide Home Loans and Related Guarantees of Countrywide Credit Industries" in the accompanying Prospectus. The statements herein concerning the Notes and the Indenture do not purport to be complete and are qualified in their entirety by reference to the provisions of the Indenture, including the definitions of certain terms used herein without definition. The Notes will be offered on a continuous basis and will mature on any day nine months or more from their dates of issue, as specified in the applicable Pricing Supplement. Unless otherwise specified in the applicable Pricing Supplement, interest-bearing Notes will either bear interest at a fixed rate ("Fixed Rate Notes") or bear interest at a floating rate ("Floating Rate Notes"), as specified in the applicable Pricing Supplement. Notes also may be issued that do not bear any interest currently or that bear interest at a below market rate. Each Note will be represented by either a global security registered in the name of a nominee of The Depository Trust Company, New York, New York ("DTC"), as depositary (a "Book-Entry Note"), or a certificate issued in definitive form (a "Certificated Note"), as set forth in the applicable Pricing Supplement. Beneficial interests in Book-Entry Notes will be shown on, and transfers thereof will be effected only through, records maintained by DTC (with respect to interests of its Participants (as defined below)) and by its Participants (with respect to interests of beneficial owners (as defined below)). Book-Entry Notes will not be issuable as Certificated Notes, except under the limited circumstances described herein. Unless otherwise specified in the applicable Pricing Supplement, the minimum denomination of Notes will be $1,000 or the equivalent thereof in any foreign currency or currency unit (if other than U.S. dollars) (a "Specified Currency") as may be designated by Countrywide Home Loans, and integral multiples of $1,000 in excess thereof or the equivalent thereof in such Specified Currency. Interest rates offered by Countrywide Home Loans with respect to the Notes may differ depending upon, among other things, the aggregate principal amount purchased in any single transaction. Notes with similar terms but different interest rates may be offered concurrently to different investors. Notes with different variable terms also may be offered concurrently to different investors. Unless otherwise specified herein or in the applicable Pricing Supplement, "Exchange Rate" means, with respect to a Specified Currency, the noon dollar buying rate for such Specified Currency for cable transfers quoted by the Exchange Rate Agent (as specified in the applicable Pricing Supplement) in The City of New York on the Record Date or Special Record Date (each as defined below) or the fifteenth day immediately preceding the Maturity Date or on such other date provided in the applicable Note or in the Indenture, as the case may be, as certified for customs purposes by the Federal Reserve Bank of New York. Certificated Notes may be presented for registration of transfer or exchange at the Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of New York. Registration of transfers or exchanges of Book-Entry Notes may be effected only through a participating member of the Depositary (as defined below). The Notes will constitute unsecured and unsubordinated indebtedness of Countrywide Home Loans and will rank equally with the other unsecured and unsubordinated indebtedness of Countrywide Home Loans. As of November 30, 2000, Countrywide Credit Industries had no secured indebtedness outstanding, and Countrywide Home Loans had $19,647,000 aggregate principal amount of secured indebtedness outstanding, all of which was short-term indebtedness. As of that date, Countrywide Home Loans had $9,968,722,000 aggregate principal amount of unsecured and unsubordinated indebtedness outstanding, which indebtedness ranked equally with the other unsecured and unsubordinated indebtedness of Countrywide Home Loans and will rank equally with the Notes. See "Description of Debt Securities of Countrywide Home Loans and Related Guarantees of Countrywide Credit Industries -- Senior Indenture -- General" and "-- Senior Indenture -- Guarantees" in the accompanying Prospectus. A substantial portion of the assets of Countrywide Home Loans may be pledged under various credit agreements among Countrywide Home Loans and various lending institutions. See Note F to the consolidated financial statements of Countrywide Credit Industries incorporated by reference into the accompanying Prospectus. The Indenture does not contain any provisions that would limit the ability of Countrywide Home Loans, Countrywide Credit Industries or any of their respective affiliates to incur indebtedness (secured or unsecured) or that would afford holders of the Notes protection in the event of a highly leveraged transaction, restructuring, change in control, merger or similar transaction involving Countrywide Home Loans or Countrywide Credit Industries that may adversely affect holders of the Notes. If so specified in the applicable Pricing Supplement, the Notes will be redeemable at the option of Countrywide Home Loans or repayable at the option of the holder prior to maturity. See "-- Redemption and Repayment" below. The Notes will not be subject to any sinking fund. "Business Day" means (A) any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in New York, New York or Los Angeles, California; provided, however, if the Specified Currency specified in the applicable Pricing Supplement is other than U.S. dollars, such day is also not a day on which banking institutions are authorized or required by law, regulation or executive order to close in the relevant Principal Financial Center (as defined below) (or if the Specified Currency is Euro, such day is also not a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is closed), and (B) with respect to Floating Rate Notes as to which LIBOR (as defined below) is an applicable Base Rate, the day must also be a London Banking Day (as defined below). "Principal Financial Center" means the capital city of the country issuing the Specified Currency, except that with respect to United States dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, Portuguese escudos, South African rand and Swiss francs, the "Principal Financial Center" shall be The City of New York, Sydney and (solely in the case of the Specified Currency) Melbourne, Toronto, Frankfurt, Amsterdam, Milan, London (solely in the case of the LIBOR Currency (as defined below)), Johannesburg and Zurich, respectively. "London Banking Day" means any day on which banking institutions are open for business (including dealings in the LIBOR Currency) in London. The "Maturity Date" means the earlier of the date on which the principal of a Note is redeemed (the "Redemption Date") or repaid (the "Repayment Date") or the date on which the Note will mature (the "Stated Maturity Date"). Unless otherwise specified in the applicable Pricing Supplement, all percentages resulting from any calculation of the rate of interest on Floating Rate Notes will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all amounts used in or resulting from such calculation on Floating Rate Notes will be rounded, in the case of U.S. dollars, to the nearest cent (with one-half cent being rounded upward) or, in the case of a Specified Currency other than U.S. dollars, to the nearest unit (with one-half unit being rounded upward). The Pricing Supplement relating to each Note will describe the following terms: (1) the Specified Currency; (2) whether such Note is a Fixed Rate Note, a Floating Rate Note or such other Note as is specified in such Pricing Supplement; (3) if other than 100%, the price (expressed as a percentage of the aggregate principal amount thereof) at which such Note will be issued to the public (the "Issue Price"); (4) the trade date; (5) the date on which such Note will be issued (the "Issue Date"); (6) the Stated Maturity Date and whether the Stated Maturity Date may be extended by Countrywide Home Loans, and if so, the Extension Periods and Final Maturity Date (each as defined below); (7) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any, and the Interest Payment Dates (as defined below) and whether such rate may be reset by Countrywide Home Loans prior to the Stated Maturity Date and, if so, the date(s) and basis or formula therefor; (8) if such Note is a Floating Rate Note, whether it is a "Floating Rate/Fixed Rate Note" and, if so, the Fixed Rate Commencement Date and Fixed Interest Rate (each as defined below), as well as the Base Rate, the Initial Interest Rate, the Interest Determination Dates, the Interest Reset Dates, the Interest Payment Dates, the Index Maturity, the Maximum Interest Rate and/or the Minimum Interest Rate, if any, and the Spread and/or Spread Multiplier, if any (each as defined below), and any other terms relating to the particular method of calculating the interest rate for such Note, and whether the Spread and/or Spread Multiplier may be reset by Countrywide Home Loans prior to the Stated Maturity Date and, if so, the date(s) and basis or formula therefor; (9) whether such Note will have the Estate Option (as defined below); (10) whether such Note may be redeemed at the option of Countrywide Home Loans, or repaid at the option of the holder, prior to maturity, and if so, the earliest date of redemption (the "Initial Redemption Date") and optional date(s) of repayment (each, an "Optional Repayment Date") and the other provisions relating to such redemption or repayment; (11) whether such Note will be issued initially as a Book-Entry Note or a Certificated Note; and (12) any other terms of such Note not inconsistent with the provisions of the Indenture. Payment of Principal, Premium, if any, and Interest Principal, premium, if any, and interest will be paid by Countrywide Home Loans in the Specified Currency. If and as specified in the applicable Pricing Supplement, at the request of a holder of a Note payable in a Specified Currency other than U.S. dollars, payments of principal, premium, if any, and interest in respect of such Note will be paid in U.S. dollars. Under such circumstances, Countrywide Home Loans will be required to tender payment in U.S. dollars at the Exchange Rate, and any costs associated with such conversion would be borne by such holder through deduction from such payments. Such holder may elect to receive payments in U.S. dollars by delivering a written request to the Trustee not later than the close of business on the Record Date immediately preceding the Interest Payment Date or the fifteenth day immediately preceding the Maturity Date, as the case may be. Such election will remain in effect until revoked by written notice from such holder to the Trustee, but written notice of any such revocation must be received by the Trustee not later than the close of business on the Record Date immediately preceding the Interest Payment Date or the fifteenth day immediately preceding the Maturity Date, as the case may be. Upon request, the Trustee will mail a copy of a form of request to any holder. Unless otherwise specified in the applicable Pricing Supplement, interest on the certificated Notes due on any Interest Payment Date other than the Maturity Date will be paid, except as provided below, by mailing a check in the Specified Currency (from an account at a bank located outside of the United States if such check is payable in a Specified Currency other than U.S. dollars) to the holder at the address of such holder appearing on the Security Register on the applicable Record Date. Unless otherwise specified in the applicable Pricing Supplement, the first payment of interest on any Note originally issued between a Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next Record Date to the holder on such next Record Date. Notwithstanding the foregoing, on any Interest Payment Date other than the Maturity Date, a holder of U.S. $10,000,000 (or the equivalent thereof in a Specified Currency other than U.S. dollars) or more in aggregate principal amount of Notes (whether or not having identical terms and provisions) shall be entitled: (1) if the Specified Currency is U.S. dollars, to receive such payment by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the United States, but only if appropriate wire transfer instructions have been received in writing by the Trustee not later than the Record Date immediately preceding such Interest Payment Date, and (2) if the Specified Currency is other than U.S. dollars, to receive such payment by wire transfer of immediately available funds to an account maintained by the payee with a bank located in a jurisdiction in which payment in such Specified Currency is then lawful. Countrywide Home Loans will pay any administrative costs imposed by banks in connection with making payments by wire transfer, but any tax, assessment or other governmental charge imposed upon payments will be borne by the holders of the Notes in respect of which payments are made. Interest payable on the Maturity Date will be payable to the person to whom principal is payable. Beneficial owners of Global Notes (as defined below) will be paid in accordance with the procedures of the Depositary and its Participants in effect from time to time as described under "-- Book-Entry Notes" below. Unless otherwise specified in the applicable Pricing Supplement, payments of principal, premium, if any, and interest on the Maturity Date will be made in immediately available funds in the Specified Currency upon presentation and surrender of Notes at the Corporate Trust Office of the Trustee. In the case of such payments in a Specified Currency other than U.S. dollars, Notes shall be presented and surrendered to the Trustee in time for the Trustee to make such payments in accordance with its normal procedures. If any Interest Payment Date other than the Maturity Date for any Floating Rate Note would otherwise fall on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next Business Day, except that if interest thereon is determined by reference to LIBOR and such next Business Day falls in the next calendar month, such Interest Payment Date shall be the immediately preceding Business Day. If the Maturity Date for any Fixed Rate Note or Floating Rate Note or the Interest Payment Date for any Fixed Rate Note falls on a day that is not a Business Day, payment of principal, premium, if any, and interest with respect to such Note will be made on the next Business Day with the same force and effect as if made on such date, and no interest on such payment will accrue to such next Business Day. Any interest not punctually paid or duly provided for with respect to a Note ("Defaulted Interest") will forthwith cease to be payable to the holder thereof on the applicable Record Date and may either be paid to the person in whose name such Note is registered at the close of business on a special record date (the "Special Record Date") for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to the holder of such Note not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner, all as more completely provided in the Indenture. Unless otherwise specified in the applicable Pricing Supplement, the "Record Date" with respect to any Interest Payment Date for Floating Rate Notes shall be the fifteenth day immediately preceding such Interest Payment Date, and for Fixed Rate Notes shall be the December 31 or June 30 immediately preceding such Interest Payment Date, in each case whether or not such date shall be a Business Day. Payment Currency If any payment of principal, premium, if any, or interest in respect of any Note is to be made in a Specified Currency other than U.S. dollars and such Specified Currency is not available to Countrywide Home Loans for making such payment due to the imposition of exchange controls or other circumstances beyond the control of Countrywide Home Loans, Countrywide Home Loans will be entitled to satisfy its obligations to the holder of such Note by making such payment in U.S. dollars on the basis of the Exchange Rate (as defined below) two Business Days prior to the Interest Payment Date or the Maturity Date, as the case may be (or, if no rate is quoted for such Specified Currency on such date, the last date such Exchange Rate is quoted). Any payment made under such circumstances in U.S. dollars where the required payment is in a Specified Currency other than U.S. dollars will not constitute an Event of Default under the Indenture. For purposes of this section, the "Exchange Rate" for a foreign currency will be the noon Dollar selling rate for such foreign currency for cable transfers quoted by the Exchange Rate Agent in The City of New York, as certified for customs purposes by the Federal Reserve Bank of New York. All determinations referred to above made by an Exchange Rate Agent shall be at its sole discretion (except to the extent expressly provided that any determination is subject to approval) and, in the absence of manifest error, shall be conclusive for all purposes and binding on the holder of such Note and such Exchange Rate Agent shall have no liability therefor. Fixed Rate Notes Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum stated on the face thereof until the principal amount thereof is paid or made available for payment. Unless otherwise specified in the applicable Pricing Supplement, interest on each Fixed Rate Note will be payable semi- annually in arrears on each January 15 and July 15 (each, an "Interest Payment Date") and on the Maturity Date. Each payment of interest shall include interest accrued from and including the Issue Date or the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, to, but excluding, the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an "Interest Period"). Unless otherwise specified in the applicable Pricing Supplement, interest on the Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months. Floating Rate Notes Each Floating Rate Note will bear interest at a rate determined by reference to an interest rate basis (each, a "Base Rate"), which may be adjusted by a Spread and/or Spread Multiplier. The applicable Pricing Supplement will designate one or more of the following Base Rates as applicable to each Floating Rate Note: (a) the CD Rate (as defined below), (b) the CMT Rate (as defined below), (c) the Commercial Paper Rate (as defined below), (d) the Eleventh District Cost of Funds Rate (as defined below), (e) the Federal Funds Rate (as defined below), (f) LIBOR, (g) the Prime Rate (as defined below), (h) the Treasury Rate (as defined below) or (i) such other interest rate basis or formula as is set forth in such Pricing Supplement and in such Floating Rate Note. The "Index Maturity" for any Floating Rate Note is the period of maturity of the instrument or obligation from which the Base Rate is calculated. Unless otherwise specified in the applicable Pricing Supplement, the interest rate on each Floating Rate Note will be calculated by reference to the specified Base Rate, or the lowest, highest or average of two or more specified Base Rates, (a) plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any. The "Spread" is the number of basis points (one basis point equals one-hundredth of a percentage point) specified in the applicable Pricing Supplement to be added or subtracted from the related Base Rate applicable to such Floating Rate Note, and the "Spread Multiplier" is the percentage specified in the applicable Pricing Supplement as being applicable to such Floating Rate Note by which such Base Rate will be multiplied to determine the applicable interest rate on such Floating Rate Note. If a Floating Rate Note is designated as a "Floating Rate/Fixed Rate Note," unless otherwise specified in the applicable Pricing Supplement, the interest rate will be calculated in the same manner as any other Floating Rate Note until a designated date when the interest rate will become fixed (the "Fixed Rate Commencement Date"). The interest rate in effect for the period commencing on the Fixed Rate Commencement Date and continuing until the Maturity Date will be the rate per annum specified in the applicable Pricing Supplement as the "Fixed Interest Rate" or, if no Fixed Interest Rate is specified, the interest rate in effect on the day immediately preceding the Fixed Rate Commencement Date. Unless otherwise specified herein or in the applicable Pricing Supplement, the Fixed Rate Commencement Date shall also constitute an Interest Payment Date for purposes of calculating and paying interest. Unless otherwise specified herein or in the applicable Pricing Supplement, the Floating Rate/Fixed Rate Note shall be treated as a Floating Rate Note until the Fixed Rate Commencement Date and as a Fixed Rate Note from the Fixed Rate Commencement Date and thereafter. Material United States federal income tax considerations associated with an investment in a Floating Rate/Fixed Rate Note will be specified in the applicable Pricing Supplement. As specified in the applicable Pricing Supplement, a Floating Rate Note may also have either or both of the following: (1) a maximum numerical limitation, or ceiling, on the rate of interest that may accrue during any Interest Period ("Maximum Interest Rate"); and (2) a minimum numerical limitation, or floor, on the rate of interest that may accrue during any Interest Period ("Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be applicable to any Floating Rate Note pursuant to the above provisions, the interest rate on a Floating Rate Note will in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. As specified in the applicable Pricing Supplement, the rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly, semi-annually or annually (each, an "Interest Reset Date") and the period between Interest Reset Dates will be the "Interest Reset Period." Unless otherwise specified in the applicable Pricing Supplement, the Interest Reset Date will be, in the case of Floating Rate Notes that reset (a) daily, each Business Day; (b) weekly, the Wednesday of each week (with the exception of weekly reset Floating Rate Notes as to which the Treasury Rate is an applicable Base Rate, which will reset the Tuesday of each week, except as specified below); (c) monthly, the third Wednesday of each month (with the exception of monthly reset Floating Rate Notes as to which the Eleventh District Cost of Funds Rate is an applicable Base Rate, which will reset on the first calendar day of each month); (d) quarterly, the third Wednesday of March, June, September and December; (e) semi-annually, the third Wednesday of the two months specified in the applicable Pricing Supplement; and (f) annually, the third Wednesday of the month specified in the applicable Pricing Supplement. If an Interest Reset Date for any Floating Rate Note would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next Business Day, except that if interest thereon is determined by reference to LIBOR and such next Business Day falls in the next calendar month, such Interest Reset Date shall be the immediately preceding Business Day. The interest rate applicable to an Interest Reset Period commencing on the related Interest Reset Date will be determined by reference to the applicable Base Rate as of the particular "Interest Determination Date", which will be (a) with respect to the Federal Funds Rate and the Prime Rate, the Business Day immediately preceding the related Interest Reset Date; (b) with respect to the CD Rate, the CMT Rate and the Commercial Paper Rate, the second Business Day preceding the related Interest Reset Date; (c) with respect to the Eleventh District Cost of Funds Rate, the last working day of the month immediately preceding the related Interest Reset Date on which the Federal Home Loan Bank of San Francisco publishes the Index (as defined below); (d) with respect to LIBOR, the second London Banking Day preceding the related Interest Reset Date; and (e) with respect to the Treasury Rate, the day in the week in which the related Interest Reset Date falls on which day Treasury Bills (as defined below) are normally auctioned (i.e. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday); provided however, that if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday. If interest on a Floating Rate Note is determined by reference to two or more Base Rates, the "Interest Determination Date" means the most recent Business Day that is at least two Business Days prior to the applicable Interest Reset Date on which each Base Rate shall be determinable. Each Base Rate shall be determined and compared as of such date, and the applicable interest rate shall take effect on the related Interest Reset Date. Interest on Floating Rate Notes will be payable on the Interest Payment Dates specified in the applicable Pricing Supplement (each, an "Interest Payment Date") and on the Maturity Date. Unless otherwise specified in the applicable Pricing Supplement, interest payments shall be the amount of interest accrued from and including the most recent Interest Payment Date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, from and including the Issue Date to but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an "Interest Period"). With respect to a Floating Rate Note, accrued interest shall be calculated by multiplying the principal amount of such Floating Rate Note by an accrued interest factor. Such accrued interest factor will be computed by adding the interest factor calculated for each day in the Interest Period for which accrued interest is being calculated. The interest factor for each such day is computed by dividing the interest rate applicable to such day by 360, if an applicable Base Rate is the CD Rate, Commercial Paper Rate, Eleventh District Cost of Funds Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days in the year, if an applicable Base Rate is the CMT Rate or Treasury Rate. If more than one Base Rate is applicable to a Floating Rate Note, the interest factor will be calculated in the same manner as if only the Base Rate specified for such purpose in the applicable Pricing Supplement applied. Unless otherwise specified in the applicable Pricing Supplement, The Bank of New York will be the calculation agent (the "Calculation Agent") with respect to the Floating Rate Notes. Upon the request of the holder of any Floating Rate Note, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date with respect to such Floating Rate Note. The "Calculation Date," if applicable, pertaining to a Floating Rate Note will be the earlier of (1) the 10th day after the Interest Determination Date pertaining to a Base Rate or, if such day is not a Business Day, the next Business Day or (2) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be. The interest rate in effect with respect to a Floating Rate Note from the Issue Date to the first Interest Reset Date (the "Initial Interest Rate") will be specified in the applicable Pricing Supplement. The interest rate for each subsequent Interest Reset Date, except in the case of a Floating Rate/Fixed Rate Note for the period subsequent to the Fixed Rate Commencement Date, will be determined by the Calculation Agent as follows. CD Rate "CD Rate" means: (1) the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit having the Index Maturity specified in the applicable Pricing Supplement as published in H.15(519) (as defined below) under the caption "CDs (secondary market)," or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit of the particular Index Maturity as published in H.15 Daily Update (as defined below), or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "CDs (secondary market)," or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time, on that Interest Determination Date, of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States certificates of deposit with a remaining maturity closest to the particular Index Maturity in an amount that is representative for a single transaction in that market at that time, or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the CD Rate in effect on the particular Interest Determination Date. "H.15(519)" means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of H.15(519), available through the world-wide-web site of the Board of Governors of the Federal Reserve System at http:/www.bog.frb.fed.us/releases/h15/update, or any successor site or publication. CMT Rate "CMT Rate" means: (1) if CMT Telerate Page 7051 is specified in the applicable Pricing Supplement: (a) the percentage equal to the yield for United States Treasury securities at "constant maturity" having the Index Maturity specified in the applicable Pricing Supplement as published in H.15(519) under the caption "Treasury Constant Maturities", as the yield is displayed on Bridge Telerate, Inc. (or any successor service) on page 7051 (or any other page as may replace the specified page on that service) ("Telerate Page 7051"), for the particular Interest Determination Date, or (b) if the rate referred to in clause (a) does not so appear on Telerate Page 7051, the percentage equal to the yield for United States Treasury securities at "constant maturity" having the particular Index Maturity and for the particular Interest Determination Date as published in H.15(519) under the caption "Treasury Constant Maturities", or (c) if the rate referred to in clause (b) does not so appear in H.15(519), the rate on the particular Interest Determination Date for the period of the particular Index Maturity as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate which would otherwise have been published in H.15(519), or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices at approximately 3:30 P.M., New York City time, on that Interest Determination Date of three leading primary United States government securities dealers in The City of New York (which may include the agents or their affiliates) (each, a "Reference Dealer"), selected by the Calculation Agent from five Reference Dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity equal to the particular Index Maturity, a remaining term to maturity no more than 1 year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time, or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated, or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent from five Reference Dealers selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time, or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated, or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on the particular Interest Determination Date. (2) if CMT Telerate Page 7052 is specified in the applicable Pricing Supplement: (a) the percentage equal to the one-week or one-month, as specified in the applicable Pricing Supplement, average yield for United States Treasury securities at "constant maturity" having the Index Maturity specified in the applicable Pricing Supplement as published in H.15(519) opposite the caption "Treasury Constant Maturities", as the yield is displayed on Bridge Telerate, Inc. (or any successor service) (on page 7052 or any other page as may replace the specified page on that service) ("Telerate Page 7052"), for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls, or (b) if the rate referred to in clause (a) does not so appear on Telerate Page 7052, the percentage equal to the one-week or one-month, as specified in the applicable Pricing Supplement, average yield for United States Treasury securities at "constant maturity" having the particular Index Maturity and for the week or month, as applicable, preceding the particular Interest Determination Date as published in H.15(519) opposite the caption "Treasury Constant Maturities," or (c) if the rate referred to in clause (b) does not so appear in H.15(519), the one-week or one-month, as specified in the applicable Pricing Supplement, average yield for United States Treasury securities at "constant maturity" having the particular Index Maturity as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls, or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices at approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent from five Reference Dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity equal to the particular Index Maturity, a remaining term to maturity no more than 1 year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time, or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated, or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent from five Reference Dealers selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at the time, or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest or the lowest of the quotations will be eliminated, or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on that Interest Determination Date. If two United States Treasury securities with an original maturity greater than the Index Maturity specified in the applicable Pricing Supplement have remaining terms to maturity equally close to the particular Index Maturity, the quotes for the United States Treasury security with the shorter original remaining term to maturity will be used. Commercial Paper Rate "Commercial Paper Rate" means: (1) the Money Market Yield (as defined below) on the particular Interest Determination Date of the rate for commercial paper having the Index Maturity specified in the applicable Pricing Supplement as published in H.15(519) under the caption "Commercial Paper -- Nonfinancial", or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Money Market Yield of the rate on the particular Interest Determination Date for commercial paper having the particular Index Maturity as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "Commercial Paper -- Nonfinancial", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent for commercial paper having the particular Index Maturity placed for industrial issuers whose bond rating is "Aa", or the equivalent, from a nationally recognized statistical rating organization, or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the Commercial Paper Rate in effect on the particular Interest Determination Date. "Money Market Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula: Money Market Yield = D x 360 x 100 ---------------- 360-- (D x M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the applicable Interest Reset Period. Eleventh District Cost of Funds Rate "Eleventh District Cost of Funds Rate" means: (1) the rate equal to the monthly weighted average cost of funds for the calendar month immediately preceding the month in which the particular Interest Determination Date falls as set forth under the caption "11th District" on the display on Bridge Telerate, Inc. (or any successor service) on page 7058 (or any other page as may replace the specified page on that service) ("Telerate Page 7058") as of 11:00 A.M., San Francisco time, on that Interest Determination Date, or (2) if the rate referred to in clause (1) does not so appear on Telerate Page 7058, the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Index") by the Federal Home Loan Bank of San Francisco as the cost of funds for the calendar month immediately preceding that Interest Determination Date, or (3) if the Federal Home Loan Bank of San Francisco fails to announce the Index on or prior to the particular Interest Determination Date for the calendar month immediately preceding that Interest Determination Date, the Eleventh District Cost of Funds Rate in effect on the particular Interest Determination Date. Federal Funds Rate "Federal Funds Rate" means: (1) the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15(519) under the caption "Federal Funds (Effective)" and displayed on Bridge Telerate, Inc. (or any successor service) on page 120 (or any other page as may replace the specified page on that service) ("Telerate Page 120"), or (2) if the rate referred to in clause (1) does not so appear on Telerate Page 120 or is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "Federal Funds (Effective)", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the rates for the last transaction in overnight United States dollar federal funds arranged by three leading brokers of United States dollar federal funds transactions in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent prior to 9:00 A.M., New York City time, on that Interest Determination Date, or (4) if the brokers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the Federal Funds Rate in effect on the particular Interest Determination Date. LIBOR "LIBOR" means: (1) if "LIBOR Telerate" is specified in the applicable Pricing Supplement or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable Pricing Supplement as the method for calculating LIBOR, the rate for deposits in the LIBOR Currency having the Index Maturity specified in the applicable Pricing Supplement, commencing on the related Interest Reset Date, that appears on the LIBOR Page as of 11:00 A.M., London time, on the particular Interest Determination Date, or (2) if "LIBOR Reuters" is specified in the applicable Pricing Supplement, the arithmetic mean of the offered rates, calculated by the Calculation Agent, or the offered rate, if the LIBOR Page by its terms provides only for a single rate, for deposits in the LIBOR Currency having the particular Index Maturity, commencing on the related Interest Reset Date, that appear or appears, as the case may be, on the LIBOR Page as of 11:00 A.M., London time, on the particular Interest Determination Date, or (3) if fewer than two offered rates appear, or no rate appears, as the case may be, on the particular Interest Determination Date on the LIBOR Page as specified in clause (1) or (2), as applicable, the rate calculated by the Calculation Agent of at least two offered quotations obtained by the Calculation Agent after requesting the principal London offices of each of four major reference banks (which may include affiliates of the Agents) in the London interbank market to provide the Calculation Agent with its offered quotation for deposits in the LIBOR Currency for the period of the particular Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that Interest Determination Date and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (4) if fewer than two offered quotations referred to in clause (3) are provided as requested, the rate calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on the particular Interest Determination Date by three major banks (which may include affiliates of the Agents) in that Principal Financial Center selected by the Calculation Agent for loans in the LIBOR Currency to leading European banks having the particular Index Maturity and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (4), LIBOR in effect on the particular Interest Determination Date. "LIBOR Currency" means the currency specified in the applicable Pricing Supplement as to which LIBOR shall be calculated or, if no currency is specified in the applicable Pricing Supplement, United States dollars. "LIBOR Page" means either: o if "LIBOR Reuters" is specified in the applicable Pricing Supplement, the display on the Reuter Monitor Money Rates Service (or any successor service) on the page specified in the applicable Pricing Supplement (or any other page as may replace that page on that service) for the purpose of displaying the London interbank rates of major banks for the LIBOR Currency; or o if "LIBOR Telerate" is specified in the applicable Pricing Supplement or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable Pricing Supplement as the method for calculating LIBOR, the display on Bridge Telerate, Inc. (or any successor service) on the page specified in the applicable Pricing Supplement (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks for the LIBOR Currency. Prime Rate "Prime Rate" means: (1) the rate on the particular Interest Determination Date as published in H.15(519) under the caption "Bank Prime Loan", or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "Bank Prime Loan", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the applicable bank's prime rate or base lending rate as of 11:00 A.M., New York City time, on that Interest Determination Date, or (4) if fewer than four rates referred to in clause (3) are so published by 3:00 p.m., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on that Interest Determination Date by three major banks (which may include affiliates of the Agents) in The City of New York selected by the Calculation Agent, or (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (4), the Prime Rate in effect on the particular Interest Determination Date. "Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor Money Rates Service (or any successor service) on the "US PRIME 1" page (or any other page as may replace that page on that service) for the purpose of displaying prime rates or base lending rates of major United States banks. Treasury Rate "Treasury Rate" means: (1) the rate from the auction held on the Treasury Rate Interest Determination Date (the "Auction") of direct obligations of the United States ("Treasury Bills") having the Index Maturity specified in the applicable Pricing Supplement under the caption "INVESTMENT RATE" on the display on Bridge Telerate, Inc. (or any successor service) on page 56 (or any other page as may replace that page on that service) ("Telerate Page 56") or page 57 (or any other page as may replace that page on that service) ("Telerate Page 57"), or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption "U.S. Government Securities/Treasury Bills/Auction High", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or (4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary Market", or (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption "U.S. Government Securities/Treasury Bills/Secondary Market", or (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on that Interest Determination Date, of three primary United States government securities dealers (which may include the Agents or their affiliates) selected by the Calculation Agent for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the applicable Pricing Supplement, or (7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date. "Bond Equivalent Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula: Bond Equivalent Yield = D x N x 100 ---------------- 360-- (D x M) where "D" refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable Interest Reset Period. Indexed Notes Countrywide Home Loans may from time to time offer Notes ("Indexed Notes") with the amount of principal, premium and/or interest payable in respect thereof to be determined with reference to the price or prices of specified commodities or stocks, to the exchange rate of one or more designated currencies (including a composite currency such as the ECU) relative to an indexed currency or to other items, in each case as specified in the applicable Pricing Supplement. In certain cases, holders of Indexed Notes may receive a principal payment on the Maturity Date that is greater than or less than the principal amount of such Indexed Notes depending upon the relative value on the Maturity Date of the specified indexed item. Information as to the method for determining the amount of principal, premium, if any, and/or interest payable in respect of Indexed Notes, certain historical information with respect to the specified indexed item and any material tax considerations associated with an investment in Indexed Notes will be specified in the applicable Pricing Supplement. See also "Risk Factors -- Structure Risks -- General." Reset Notes The Pricing Supplement relating to each Note will indicate whether Countrywide Home Loans has the option with respect to such Note to reset the interest rate, in the case of a Fixed Rate Note, or to reset the Spread and/or Spread Multiplier, in the case of a Floating Rate Note (in each case, a "Reset Note"), and, if so, (1) the date or dates on which such interest rate or such Spread and/or Spread Multiplier, as the case may be, may be reset (each an "Optional Interest Reset Date") and (2) the basis or formula, if any, for such resetting. Material United States federal income tax considerations associated with an investment in a Reset Note will be specified in the applicable Pricing Supplement. Countrywide Home Loans may exercise such option with respect to a Note by notifying the Trustee of such exercise at least 45 but not more than 60 calendar days prior to an Optional Interest Reset Date for such Note. If the Company so notifies the Trustee of such exercise, not later than 40 calendar days prior to such Optional Interest Reset Date the Trustee will send by telegram, telex, facsimile transmission or letter (first class, postage prepaid) to the holder of such Note a notice (the "Reset Notice") indicating (1) that Countrywide Home Loans has elected to reset the interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier, in the case of a Floating Rate Note, (2) such new interest rate or such new Spread and/or Spread Multiplier, as the case may be, and (3) the provisions, if any, for redemption by Countrywide Home Loans during the period from such Optional Interest Reset Date to the next Optional Interest Reset Date or, if there is no such next Optional Interest Reset Date, to the Stated Maturity Date of such Note (each such period, a "Subsequent Interest Period"), including the date or dates on which, or the period or periods during which, and the price or prices at which such redemption may occur during such Subsequent Interest Period. Notwithstanding the foregoing, not later than 20 calendar days prior to an Optional Interest Reset Date for a Note, Countrywide Home Loans may, at its option, revoke the interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier, in the case of a Floating Rate Note, provided for in the Reset Notice and establish a higher interest rate, in the case of a Fixed Rate Note, or a higher Spread and/or Spread Multiplier, in the case of a Floating Rate Note, for the Subsequent Interest Period commencing on such Optional Interest Reset Date by causing the Trustee to send by telegram, telex, facsimile transmission or letter (first class, postage prepaid) notice of such higher interest rate or higher Spread and/or Spread Multiplier, as the case may be, to the holder of such Note. Such notice shall be irrevocable. All Notes with respect to which the interest rate or Spread and/or Spread Multiplier is reset on an Optional Interest Reset Date, and with respect to which holders of such Notes have not surrendered such Notes for repayment (or have validly revoked any such surrender) pursuant to the next paragraph, will bear such higher interest rate, in the case of a Fixed Rate Note, or higher Spread and/or Spread Multiplier, in the case of a Floating Rate Note. If Countrywide Home Loans elects prior to an Optional Interest Reset Date to reset the interest rate or the Spread and/or Spread Multiplier of a Note, the holder of such Note will have the option to elect repayment of such Note by Countrywide Home Loans on such Optional Interest Reset Date at a price equal to the principal amount thereof plus any accrued interest to such Optional Interest Reset Date. In order to obtain repayment of such Note to be so repaid on such Optional Interest Reset Date, the holder thereof must follow the procedures set forth below under "Redemption and Repayment" for optional repayment, except that the period for delivery of such Note or notification to the Trustee shall be at least 25 but not more than 35 calendar days prior to such Optional Interest Reset Date. A holder who has tendered a Note for repayment following receipt of a Reset Notice may revoke such tender for repayment by written notice to the Trustee received prior to 5:00 P.M., New York City time, on the 10th calendar day prior to such Optional Interest Reset Date. Extension of Maturity The Pricing Supplement relating to each Note will indicate whether Countrywide Home Loans has the option to extend the Stated Maturity Date of such Note for one or more periods of one to five whole years (each such period, an "Extension Period") up to but not beyond the date (the "Final Stated Maturity Date") set forth in such Pricing Supplement. Countrywide Home Loans may exercise such option with respect to a Note by notifying the Trustee of such exercise at least 45 but not more than 60 calendar days prior to the Stated Maturity Date of such Note in effect prior to the exercise of such option (the "Current Stated Maturity Date"). If Countrywide Home Loans so notifies the Trustee of such exercise, not later than 40 calendar days prior to the Current Stated Maturity Date the Trustee will send by telegram, telex, facsimile transmission or letter (first class, postage prepaid) to the holder of such Note a notice (the "Extension Notice") relating to such Extension Period, indicating (1) that Countrywide Home Loans has elected to extend the Current Stated Maturity Date of such Note, (2) the new Stated Maturity Date and the Final Stated Maturity Date, (3) in the case of a Fixed Rate Note, the interest rate applicable to the Extension Period or, in the case of a Floating Rate Note, the Spread and/or Spread Multiplier applicable to the Extension Period, and (4) the provisions, if any, for redemption by Countrywide Home Loans during the Extension Period, including the date or dates on which, or the period or periods during which, and the price or prices at which such redemption may occur during the Extension Period. Upon the sending by the Trustee of an Extension Notice to the holder of a Note, the Current Stated Maturity Date of such Note shall be extended automatically, and, except as modified by the Extension Notice and as described in the next two paragraphs, such Note will have the same terms as prior to the sending of such Extension Notice. Notwithstanding the foregoing, not later than 20 calendar days prior to the Current Stated Maturity Date of a Note, Countrywide Home Loans may, at its option, revoke the interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread Multiplier, in the case of a Floating Rate Note, provided for in the Extension Notice and establish a higher interest rate, in the case of a Fixed Rate Note, or a higher Spread and/or Spread Multiplier, in the case of a Floating Rate Note, for the Extension Period by causing the Trustee to send by telegram, telex, facsimile transmission or letter (first class, postage prepaid) notice of such higher interest rate or higher Spread and/or Spread Multiplier, as the case may be, to the holder of such Note. Such notice shall be irrevocable. All Notes with respect to which the Current Stated Maturity Date is extended, and with respect to which the holders of such Notes have not surrendered such Notes for repayment (or have validly revoked any such surrender) pursuant to the next paragraph, will bear such higher interest rate, in the case of a Fixed Rate Note, or higher Spread and/or Spread Multiplier, in the case of a Floating Rate Note, for the Extension Period. If Countrywide Home Loans elects to extend the Current Stated Maturity Date of a Note, the holder of such Note will have the option to elect repayment of such Note by Countrywide Home Loans on the Current Stated Maturity Date at a price equal to the principal amount thereof plus any accrued interest to the Current Stated Maturity Date. In order for a Note to be so repaid on the Current Stated Maturity Date, the holder thereof must follow the procedures set forth below under "-- Redemption and Repayment" for optional repayment, except that the period for delivery of such Note or notification to the Trustee shall be at least 25 but not more than 35 calendar days prior to the Current Stated Maturity Date. A holder who has tendered a Note for repayment following receipt of an Extension Notice may revoke such tender for repayment by written notice to the Trustee received prior to 5:00 P.M., New York City time on the 10th calendar day prior to the Current Stated Maturity Date. Renewable Notes If so indicated in the applicable Pricing Supplement, the term of all or any portion of a Note may be renewed beyond the Stated Maturity Date by the holder in accordance with the procedures described in such Pricing Supplement. Combination of Provisions If so specified in the applicable Pricing Supplement, any Note may be subject to all of the provisions, or any combination of the provisions, described above under "-- Reset Notes," "-- Extension of Maturity" and "-- Renewable Notes." Book-Entry Notes Countrywide Home Loans has established a depositary arrangement with DTC with respect to the Book-Entry Notes, the terms of which are summarized below. Any additional or differing terms of such depositary arrangement will be described in the applicable Pricing Supplement. Upon issuance, all Book-Entry Notes having the same Specified Currency, Issue Date, Stated Maturity Date, redemption and/or repayment provisions, if any, reset and/or extension provisions, if any, Interest Payment Dates, if any, and, in the case of Fixed Rate Notes, interest rate or, in the case of Floating Rate Notes, Base Rate or Rates, Initial Interest Rate, Index Maturity, Interest Reset Dates, Spread and/or Spread Multiplier, if any, Minimum Interest Rate, if any, and/or Maximum Interest Rate, if any, will be represented by one or more global securities (each, a "Global Note"). Each Global Note representing Book-Entry Notes will be deposited with, or on behalf of, DTC, or such other depositary as is specified in the Pricing Supplement (the "Depositary"), and registered in the name of a nominee of such Depositary. Global Notes may not be transferred except as a whole by the applicable Depositary to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any nominee to a successor of such Depositary or a nominee of such successor. Book-Entry Notes will not be exchangeable for Certificated Notes and, except under the limited circumstances described below, will not otherwise be issuable in definitive form. DTC has advised Countrywide Home Loans and the Agents as follows: DTC will initially act as securities depositary for the Global Notes. The Global Notes will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Global Note will be issued with respect to each $400,000,000 of principal amount of Notes. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds securities that its participants ("Participants") deposit with it. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to DTC's system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of securities under DTC's system must be made by or through Direct Participants, which will receive a credit for the securities on DTC's records. The ownership interest of each actual purchaser of each security (a "beneficial owner") is in turn recorded on the Direct Participant's and Indirect Participant's records. Beneficial owners will not receive written confirmation from DTC of their purchase, but such beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct Participant or Indirect Participant through which the beneficial owner entered into the transaction. Transfers of ownership interests in the securities are to be accomplished by entries made on the books of Participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in securities, except in the event that use of the book-entry system for the securities is discontinued. To facilitate subsequent transfers, all securities deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of securities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such securities are credited, which may or may not be the beneficial owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to beneficial owners is governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to securities. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, premium, if any, and interest payments on the securities will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the applicable Paying Agent, or Countrywide Home Loans, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of Countrywide Home Loans or the applicable Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the beneficial owners shall be the responsibility of Direct Participants and Indirect Participants. DTC may discontinue providing its services as securities depositary with respect to the Global Notes at any time by giving reasonable notice to Countrywide Home Loans, the Trustee or the applicable Paying Agent. Under such circumstances, in the event that a successor securities depositary is not obtained, the Global Notes are required to be printed and delivered. Countrywide Home Loans may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depositary). In that event, the Global Notes will be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that Countrywide Home Loans believes to be reliable, but Countrywide Home Loans takes no responsibility for the accuracy thereof. So long as the Depositary for a Global Note, or its nominee, is the registered owner of such Global Note, such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Book-Entry Notes represented by such Global Note for all purposes under the Indenture governing such Book-Entry Notes. Except as set forth below, owners of beneficial interests in such Global Notes will not be entitled to have Notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of Certificated Notes and will not be considered the owners or holders thereof under the Indenture. Accordingly, each person owning a beneficial interest in a Global Note must rely on the procedures of the Depositary and, if such person is not a Participant, those of the Participant through which such person owns its interests, in order to exercise any rights of a holder under the Indenture or such Note. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a Global Note. Principal, premium, if any, and interest payments on Notes registered in the name of or held by the Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner or the holder of the Global Note representing such Book-Entry Notes. None of Countrywide Home Loans, Countrywide Credit Industries, the Trustee, the Calculation Agent, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Note for such Book-Entry Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. If the Depositary is at any time unwilling, unable or ineligible to continue as Depositary and a successor Depositary is not appointed by Countrywide Home Loans within 60 days or if an Event of Default under the Indenture has occurred and is continuing, Countrywide Home Loans will issue Certificated Notes in exchange for the Global Note or Notes representing such Book-Entry Notes. In addition, Countrywide Home Loans may at any time and in its sole discretion determine not to have any Notes in registered form represented by one or more Global Notes and, in such event, will issue Certificated Notes in exchange for all Global Notes representing such Notes. In any such instance, an owner of a beneficial interest in a Global Note will be entitled to physical delivery of Certificated Notes represented by such Global Note equal in principal amount to such beneficial interest and to have such Notes registered in its name. Redemption and Repayment If so specified in the applicable Pricing Supplement, Countrywide Home Loans may at its option on and after the Initial Redemption Date, if any, set forth in a Note redeem such Note in whole or, from time to time, in part in increments of $1,000 (provided that any remaining principal amount thereof shall not be less than $100,000 (or such other amount in a foreign currency or currency unit as is specified in the applicable Pricing Supplement), or, if another minimum denomination is set forth in the applicable Pricing Supplement, then such minimum denomination) at the sum of (1) 100% of the unpaid principal amount thereof or the portion thereof redeemed (or, if such Note is an Original Issue Discount Security (as defined below), 100% of the Amortized Face Amount (as defined below), or portion thereof redeemed, determined as of the Redemption Date as provided below), plus (2) the Initial Redemption Percentage specified in the applicable Pricing Supplement (as adjusted by the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount or the portion thereof redeemed (or, if such Note is an Original Issue Discount Security, the Issue Price thereof, net of any portion of such Issue Price that has been deemed paid prior to redemption (by reason of any payments, other than a payment of qualified stated interest, in excess of the original issue discount accrued to the date of such payment), or the portion of such Issue Price (or such net amount) proportionate to the portion of the unpaid principal amount of the Note redeemed), plus (3) accrued but unpaid interest to the Redemption Date (or, if such Note is an Original Issue Discount Security, any accrued but unpaid interest to the Redemption Date but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Internal Revenue Code of 1986, as amended (the "Code"), as in effect on the date hereof). Such Initial Redemption Percentage shall decline at each anniversary of the Initial Redemption Date by an amount equal to the Annual Redemption Percentage Reduction, if any, specified in the applicable Pricing Supplement, until the Initial Redemption Percentage equals zero percent. Countrywide Home Loans may exercise such option by causing the Trustee to mail a notice of such redemption to the holder of such Note not less than 30 but not more than 60 days prior to the Redemption Date. In the event of redemption of such Note in part only, a new Note or Notes for the unredeemed portion thereof shall be issued in the name of the holder thereof upon the cancellation thereof. If less than all of the Notes with like tenor and terms to such Note are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate. An "Original Issue Discount Security" means any Note that has been issued at an Issue Price lower, by an amount that equals or exceeds a de minimis amount (as determined under United States federal income tax rules applicable to original issue discount instruments), than the principal amount thereof. The "Amortized Face Amount" of such Note shall be the amount equal to the sum of (a) the Issue Price plus (b) the aggregate of the portions of the original issue discount (the excess of the amounts considered as part of the "stated redemption price at maturity" of such Note within the meaning of Section 1273(a)(2) of the Code, whether denominated as principal or interest, over the Issue Price of such Note) that shall theretofore have accrued pursuant to Section 1272 of the Code (without regard to Section 1272(a)(7) of the Code) from the Issue Date of such Note to the date of determination, minus (c) any amount considered as part of the "stated redemption price at maturity" of such Note that has been paid on such Note from the Issue Date to the date of determination. If a Note is an Original Issue Discount Security, the amount payable in the event of acceleration of the maturity thereof shall be the Amortized Face Amount, plus accrued but unpaid qualified stated interest as defined in clause (3) of the first sentence of the preceding paragraph. If so specified in the applicable Pricing Supplement, the Notes will be repayable by Countrywide Home Loans in whole or in part at the option of holders thereof on their respective Optional Repayment Dates specified in such Pricing Supplement. If no Optional Repayment Date is specified with respect to a Note, such Note will not be repayable at the option of the holder thereof prior to the Stated Maturity Date. Any repayment in part will be in increments of $1,000 (provided that any remaining principal amount thereof shall be at least the minimum denomination). Unless otherwise specified in the applicable Pricing Supplement, the repayment price for any Note to be repaid means an amount equal to the sum of (1) 100% of the unpaid principal amount thereof or the portion to be repaid thereof (or if this Note is an Original Issue Discount Security, 100% of the Amortized Face Amount, or portion thereof to be repaid, determined as of the Repayment Date) plus (2) accrued but unpaid interest to the Repayment Date (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest to the Repayment Date but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c)). For any Note to be repaid, such Note must be received, together with the form thereon entitled "Option to Elect Repayment" duly completed, by the Trustee at its Corporate Trust Office (or such other address of which Countrywide Home Loans shall from time to time notify the holders) not more than 60 nor less than 30 days prior to the Repayment Date. Exercise of such repayment option by the holder will be irrevocable, except as otherwise provided above under "-- Reset Notes" and "-- Extension of Maturity." While the Book-Entry Notes are represented by the Global Notes held by or on behalf of the Depositary, and registered in the name of the Depositary or the Depositary's nominee, the option for repayment may be exercised by the Depositary, acting on behalf of each applicable Participant who is, in turn, acting on behalf of the beneficial owners of the Global Note or Notes representing such Book-Entry Notes, by delivering a written notice substantially similar to the above mentioned form to the Trustee at its Corporate Trust Office (or such other address of which Countrywide Home Loans shall from time to time notify the holders), not more than 60 nor less than 30 days prior to the Repayment Date. Notices of elections from the Depositary must be received by the Trustee by 5:00 P.M., New York City time, on the last day for giving such notice. In order to ensure that a notice is received by the Trustee on a particular day, the beneficial owner of the Global Note or Notes representing such Book-Entry Notes must so direct the applicable Participant before such Participant's deadline for accepting instructions for that day. Different firms may have different deadlines for accepting instructions from their customers. Accordingly, beneficial owners of the Global Note or Notes representing Book-Entry Notes should consult the Participants through which they own their interest therein for the respective deadlines for such Participants. All instructions given to Participants from beneficial owners of Global Notes relating to the option to elect repayment shall be irrevocable, except as otherwise provided above under "-- Reset Notes" and "-- Extension of Maturity." In addition, at the time such instructions are given, such beneficial owners shall cause the applicable Participant to transfer such beneficial owner's interest in the Global Note or Notes representing the related Book-Entry Notes, on the Depositary's records, to the Trustee. See "-- Book-Entry Notes" above. Countrywide Home Loans or Countrywide Credit Industries may purchase Notes in the open market by tender or contract. Notes so purchased may be held, resold or surrendered to the Trustee for cancellation. If applicable, Countrywide Home Loans will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended, and any other securities laws or regulations in connection with any such repayment. Estate Option The Pricing Supplement relating to any Note will indicate whether the holder of the Note will have the right to require Countrywide Home Loans to repay such Note prior to its maturity date upon the death of the owner of such Note (the "Estate Option"). Pursuant to the exercise of the Estate Option, if applicable, Countrywide Home Loans will, at its option and subject to certain limitations, either repay or purchase any Note, or portion thereof, properly tendered for repayment by or on behalf of the person (the "Representative") that has authority to act on behalf of the deceased owner of the beneficial interest in such Note under the laws of the appropriate jurisdiction (including, without limitation, the personal representative, executor, surviving joint tenant or surviving tenant by the entirety of such deceased beneficial owner) at a price equal to 100% of the principal amount of the beneficial interest of the deceased owner in such Note (or if such Note is an Original Issue Discount Security, 100% of the Amortized Face Amount, determined as of the Repayment Date) plus accrued and unpaid interest to the Repayment Date. Countrywide Home Loans may, in its sole discretion, limit the aggregate principal amount of Notes as to which exercises of the Estate Option will be accepted in any calendar year (the "Annual Put Limitation") to one percent (1%) of the outstanding aggregate principal amount of the Notes as of the end of the most recent fiscal year, but not less than $1,000,000 in any such calendar year, or such greater amount as Countrywide Home Loans, in its sole discretion, may determine for any such calendar year. Countrywide Home Loans also may, in its sole discretion, limit to $25,000, or such greater amount as Countrywide Home Loans, in its sole discretion, may determine for any calendar year, the aggregate principal amount of Notes, or portions thereof, as to which exercise of the Estate Option will be accepted in such calendar year with respect to any individual deceased owner of beneficial interests in such Notes (the "Individual Put Limitation"). Countrywide Home Loans will not make principal repayments or purchases pursuant to exercise of the Estate Option in amounts that are less than $1,000, and if the foregoing limitations would result in the partial repayment or purchase of any Note, the principal amount of such Note remaining outstanding after repayment must be at least $1,000. In order for an Estate Option to be validly exercised with respect to any Note, or portion thereof, the Trustee must receive from the Representative of the deceased owner: (1) a written request for repayment signed by the Representative and such signature must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD") or a commercial bank or trust company having an office or correspondent in the United States, (2) tender of the Note, or portion thereof, to be repaid, (3) appropriate evidence satisfactory to the Trustee that (a) the Representative has authority to act on behalf of the deceased beneficial owner, (b) the death of such beneficial owner has occurred and (c) the deceased was the owner of a beneficial interest in such Note at the time of death, (4) a properly executed assignment or endorsement, if applicable, and (5) if the beneficial interest in such Note is held by a nominee of the deceased beneficial owner, a certificate satisfactory to the Trustee from such nominee attesting to the deceased's ownership of a beneficial interest in such Note. In the case of repayment pursuant to the exercise of the Estate Option for Notes represented by a Global Note, the Depository or its nominee will be the holder of such Note and therefore will be the only entity that can exercise the Estate Option for such Note. To obtain repayment pursuant to exercise of the Estate Option with respect to such Note, the Representative must provide to the broker or other entity through which the beneficial interest in such Note is held by the deceased owner the documents described in clauses (1) and (3) of the preceding paragraph and instructions to such broker or other entity to notify the Depository of such Representative's desire to obtain repayment pursuant to exercise of the Estate Option. Such broker or other entity will provide to the Trustee the documents received from the Representative pursuant to the preceding sentence and a certificate from such broker or other entity satisfactory to the Trustee stating that such broker or other entity represents the deceased beneficial owner. Such broker or other entity will be responsible for disbursing any payments it receives pursuant to exercise of the Estate Option to the appropriate Representative. Subject to any Annual Put Limitation and Individual Put Limitation imposed by Countrywide Home Loans, all questions as to the eligibility or validity of any exercise of the Estate Option will be determined by the Trustee, in its sole discretion, which determination will be final and binding on all parties. Any Note, or portion thereof, tendered pursuant to exercise of the Estate Option may not be withdraw, except as specifically set forth below. Each Note, or portion thereof, that is tendered pursuant to valid exercise of the Estate Option will be accepted promptly in the order all such Notes are tendered, except for any Note, or portion thereof, the acceptance of which would contravene (1) the Annual Put Limitation, if applied, or (2) the Individual Put Limitation, if applied, with respect to the relevant individual deceased owner of beneficial interests therein. Any Note, or portion thereof, accepted for repayment pursuant to exercise of the Estate Option will be repaid no later than the first Interest Payment Date that occurs 20 or more calendar days after the date of such acceptance. If a Note, or any portion thereof, tendered for repayment pursuant to a valid exercise of the Estate Option is not accepted, the Trustee will deliver a notice by first-class mail to the registered holder thereof at its last known address as indicated in the Note Register, that states the reason such Note, or portion thereof, has not been accepted for payment. If, as of the end of any calendar year, the aggregate principal amount of Notes, or portions thereof, that have been accepted pursuant to exercise of the Estate Option during such year has not exceeded the Annual Put Limitation, if applied, for such year, any exercise of the Estate Option with respect to Notes, or portions thereof, not accepted during such calendar year because such acceptance would have contravened the Individual Put Limitation, if applied, with respect to an individual deceased owner of beneficial interests therein will be accepted in the order all such Notes, or portions thereof, were tendered, to the extent that any such exercise would not trigger the Annual Put Limitation for such calendar year. Each Note, or portion thereof, tendered for repayment that is not accepted in the calendar year in which it is tendered due to the application of the Annual Put Limitation will be deemed to be tendered in the following calendar year in the order in which all such Notes, or portions thereof, were originally tendered, unless any such Note, or portion thereof, is withdrawn by the Representative for the deceased owner. The death of a person owning a Note in joint tenancy or tenancy by the entirety with another or others will be deemed the death of the holder of the Note, and the entire principal amount of the Note so held will be subject to repayment, together with interest accrued thereon to the repayment date. The death of a person owning a Note by tenancy in common will be deemed the death of a holder of a Note only with respect to the deceased holder's interest in the Note so held by tenancy in common; except that if a Note is held by husband and wife as tenants in common, the death of either will be deemed the death of the holder of the Note and the entire principal amount of the Note so held will be subject to repayment. The death of a person who, during his or her lifetime, was entitled to substantially all of the beneficial interest of ownership of a Note, will be deemed the death of the holder thereof for purposes of this provision, regardless of the registered holder, if such beneficial interest can be established to the satisfaction of the Trustee. Such beneficial interest will be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Gifts to Minors Act, community property or other joint ownership arrangements between a husband and wife and trust arrangements where one person has substantially all of the beneficial ownership interest in the Note during his or her lifetime. A Representative may obtain the forms used to exercise the Estate Option from the Trustee. Guarantees The Notes will be unconditionally guaranteed by Countrywide Credit Industries as to payment of principal, premium, if any, and interest, when and as the same shall become due and payable, whether at maturity or upon redemption or repayment or otherwise. See "Description of Debt Securities of Countrywide Home Loans and Related Guarantees of Countrywide Credit Industries" in the accompanying Prospectus. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a general summary of certain of the material United States federal income tax consequences of the purchase, ownership and disposition of Notes by United States Holders (as defined below). This discussion represents the opinion of Munger, Tolles & Olson LLP insofar as it relates to matters of United States federal income tax laws and legal conclusions with respect thereto. The summary is for general information only and is based on the Code, the Treasury Regulations promulgated or proposed thereunder, and judicial and administrative interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect, or to different interpretations. The tax treatment of a holder of the Notes may vary depending upon the particular situation of the holder. The summary is limited to investors who will hold the Notes as "capital assets" within the meaning of Section 1221 of the Code and does not deal with holders in special tax situations (including, but not limited to, insurance companies, tax-exempt organizations, financial institutions, dealers in securities or currencies, traders in securities, holders whose functional currency is not the U.S. dollar, or holders who will hold Notes as a hedge against currency risks or as a position in a "straddle" for tax purposes), who may be subject to special rules not discussed below. The summary does not apply to holders that are not United States Holders. The summary is applicable only to purchasers of Notes on original issue at the issue price (as defined below) and does not address other purchasers. The discussion below also does not address the effect of any state, local or foreign tax law on a holder of Notes. As used herein, the term "United States Holder" means an individual who is a citizen or resident of the United States, a partnership or corporation organized in or under the laws of the United States or any state thereof, an estate the income of which is subject to United States federal income taxation regardless of its source, or a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (within the meaning of Section 7701(a)(30) of the Code) have authority to control all substantial decisions of the trust. In addition, some trusts treated as United States persons before August 20, 1996, may elect to continue to be so treated to the extent provided in Treasury Regulations. The summary does not constitute, and should not be considered as, legal or tax advice to prospective holders of Notes. Each prospective holder of Notes should consult a tax advisor as to the particular tax consequences of holding Notes to such holder, including the applicability and effect of any state, local or foreign tax laws. Payments of Interest Interest on a Note, other than interest on a Discount Note (defined below under "Original Issue Discount") that is not a "qualified stated interest" payment (also as defined under "Original Issue Discount"), will be taxable to a holder as ordinary interest income at the time it is accrued or is received in accordance with the holder's regular method of accounting for tax purposes. If interest is paid in a Specified Currency other than U.S. dollars, the amount of interest income realized by a holder will be the U.S. dollar value of (a) in the case of a cash basis holder, the foreign currency received (based on the spot rate in effect on the date of receipt), or (b) in the case of an accrual basis holder, the foreign currency accrued during an interest accrual period, or partial interest accrual period (based on (1) the average exchange rate in effect during the accrual period, or (2) the spot rate on the last day of the accrual period (or on the payment date, if such date is within five business days of the last day of the accrual period); provided that any such spot election will apply to all debt instruments held at the beginning of the first taxable year to which it applies or subsequently acquired, which election may not be revoked without the consent of the Internal Revenue Service), in each case, regardless of whether the payment is in fact converted into U.S. dollars. In the case of an accrual basis holder, at the time the interest accrued is received, the holder will realize exchange gain or loss, taxable as ordinary income or loss, equal to the difference, if any, between the amount of foreign currency received with respect to such accrual period (translated into U.S. dollars at the spot rate in effect on the date the interest is received) and the amount of interest on the Note included in income. The federal income tax consequences of the disposition of foreign currency received as interest are described below under "-- Exchange of Amounts in Foreign Currency." Original Issue Discount General. A Note will be treated as issued at an original issue discount, and be referred to as a "Discount Note," if the excess of the "stated redemption price at maturity" of the Note over its issue price (defined as the first price at which a substantial amount of Notes of the same issue is sold to the public) equals or exceeds a de minimis amount (generally 1/4 of 1 percent of the Note's stated redemption price at maturity multiplied by the number of complete years from the issue date to maturity). "Stated redemption price at maturity" is the total of all payments provided by the Note that are not payments of "qualified stated interest." A "qualified stated interest" payment is a payment of stated interest that is unconditionally payable in cash or property (other than debt instruments of Countrywide Home Loans) at least annually during the entire term of the Note, including short periods, with respect to a Floating Rate Note, at certain specified types of variable rates (as discussed below) or, with respect to a Fixed Rate Note, at a single fixed rate. Interest is payable at a single fixed rate only if the rate appropriately takes into account the length of the intervals between payments. Stated interest that exceeds qualified stated interest is included in the Note's stated redemption price at maturity. Holders of Discount Notes having a maturity of more than one year from their date of issue will be required to include original issue discount in income as it accrues, which can result in recognition of income before the receipt of cash attributable to such income. The amount of original issue discount includable in income by the holder of such a Discount Note is the sum of the daily portions of original issue discount with respect to the Discount Note for each day during the taxable year or portion of the taxable year in which it holds such Discount Note ("accrued original issue discount"). The daily portion is determined by allocating to each day in any "accrual period" a pro rata portion of the original issue discount that accrued in such period (the excess of (a) the product of the Discount Note's adjusted issue price at the beginning of the accrual period and its yield to maturity, appropriately adjusted for the length of the period, over (b) the sum of the qualified stated interest payments, if any, payable during the accrual period). The "accrual period" for a Discount Note may be of any length and may vary in length over the term of a Note, provided that each accrual period is no longer than one year and each scheduled payment of principal or interest occurs either on the first day or the last day of an accrual period. The "adjusted issue price" of a Discount Note at the start of any accrual period is the sum of the issue price of the Note plus the accrued original issue discount for each prior accrual period minus any prior payments on the Note that were not qualified stated interest payments. Holders of Notes with a de minimis amount of original issue discount generally must include a proportionate amount of each payment of stated principal received in respect of the Notes in income as capital gain. Floating Rate Notes. If a Floating Rate Note that otherwise qualifies as a "variable rate debt instrument" under the applicable Treasury Regulations provides for stated interest at a single "qualified floating rate" or a single "objective rate" (each as defined in the Treasury Regulations) that is unconditionally payable in cash or property (other than debt instruments of Countrywide Home Loans), or that will be constructively received, at least annually, then all payments of stated interest with respect to such Note will be "qualified stated interest." The amount of original issue discount (if any) with which such a Note is issued will be determined under the rules discussed above by assuming that the Floating Rate Note pays stated interest at the appropriate fixed rate substitute (generally, the value, as of the Issue Date, of the floating rate, or in the case of certain Floating Rate Notes, a fixed rate that reflects the yield that is reasonably expected for such Notes). The Treasury Regulations provide additional rules for a Floating Rate Note that qualifies as a variable rate debt instrument and that provides for stated interest at more than one floating rate or at a fixed rate for a portion of its term. In certain cases, such a Floating Rate Note that is not issued at a discount may be deemed to bear original issue discount for federal income tax purposes, with the result that inclusion of original issue discount in gross income for federal income tax purposes may vary from the cash payments of interest received on such Note, generally accelerating income for cash method taxpayers. For example, under the Treasury Regulations, a Floating Rate Note may be a Discount Note where (a) it bears interest at a floating rate followed by another floating rate and, as of the Issue Date, the values of the two floating rates differ, or (b) it bears interest at a fixed rate followed by a floating rate (or vice versa) and, as of the Issue Date, the value of the floating rate differs from the fixed rate. The tax treatment of a United States Holder of a Floating Rate Note ultimately will depend upon the precise terms of the Notes offered; consequently, the proper tax treatment of such Notes will be more fully described in the applicable Pricing Supplement. A Floating Rate Note that does not qualify as a variable rate debt instrument may be subject to Treasury Regulations concerning the treatment of "contingent payment debt instruments" (the "contingent payment debt regulations"). If a Floating Rate Note is subject to the contingent payment debt regulations, then, inter alia, all gain and (subject to certain limitations) loss recognized by a United States Holder with respect to the Note would be ordinary, rather than capital, in nature and all United States Holders would be required to accrue interest income on the Note as original issue discount over the term of the Note based upon a projected payment schedule (subject to later adjustments) provided by Countrywide Home Loans. The tax treatment of a Floating Rate Note that is treated as a contingent payment debt instrument will be more fully described in the applicable Pricing Supplement. Any determination of the type described above made by Countrywide Home Loans when a Note is issued may be subject to subsequent changes and clarifications of applicable law or to challenge by the Internal Revenue Service. Optional Redemption. For purposes of calculating the yield and maturity of a Note, an unconditional option of Countrywide Home Loans or a holder to redeem a Note prior to the Maturity Date will be presumed to be exercised if, by utilizing any date on which the Note may be redeemed as its maturity date and the amount payable on that date in accordance with the terms of the Note (the "redemption price") as its stated redemption price at maturity, the yield on the Note is lower than its yield to maturity in the case of an option exercisable by Countrywide Home Loans (or, in the case of an option exercisable by a holder, is greater than its yield to maturity). If such an option is not in fact exercised when presumed to be, solely for purposes of accruing original issue discount, the Note will be treated as if it were redeemed, and a new Note issued, on the presumed exercise date for an amount equal to its adjusted issue price on that date. Short-Term Notes. A Note that matures one year or less from the date of its issuance (a "Short-Term Note") will be treated as having been issued at an original issue discount equal to the excess of the total principal and interest payments on the Note over its issue price. In general, an individual or other cash basis holder of a Short-Term Note is not required to currently include in income accrued original issue discount for United States federal income tax purposes unless it elects to do so. Accrual basis holders and certain other holders are required to include in income accrued original issue discount on Short-Term Notes on a straight-line basis unless an irrevocable election is made to include in income accrued original issue discount under the constant yield method (based on daily compounding). In the case of a holder not required and not electing to include accrued original issue discount in income currently, any gain realized on the sale or retirement of the Short-Term Note will be ordinary income to the extent of the original issue discount accrued on a straight-line basis (or, at the holder's irrevocable election, under a constant yield method, based on daily compounding) through the date of sale or retirement. A holder who is not required and does not elect to include in income accrued original issue discount on a Short-Term Note will be required to defer deduction of a portion of the holder's interest expense with respect to any indebtedness incurred or maintained to purchase or carry the Note. Foreign Currency Denominated Discount Notes. In the case of a Discount Note denominated in a foreign currency, for purposes of calculating original issue discount, a holder should: (1) calculate the amount and accrual of original issue discount in respect of the Note in the foreign currency; (2) determine the U.S. dollar amount of original issue discount includable in income for each accrual period by translating the foreign currency amounts into U.S. dollars based on the average exchange rate in effect during that accrual period or based on the spot rate (A) on the last day of the relevant accrual period (or partial accrual period) or (B) on the payment date, if such date is within five business days of the last day of the accrual period; and (3) recognize any foreign currency gain or loss when the original issue discount is received to the extent of the difference between the amount determined pursuant to clause (2) above and the U.S. dollar value of such payment determined by translating the foreign currency at the spot rate in effect on the date of payment. The federal income tax consequences of the disposition of any foreign currency received are described below under "-- Exchange of Amounts in Foreign Currency." Notes Purchased at a Premium A holder that purchases a Note for an amount in excess of the sum of all amounts payable on the Note after the purchase date other than payments of qualified stated interest may elect to treat that excess as "amortizable bond premium," in which case the amount required to be included in the holder's income each year with respect to interest on the Note will generally be reduced by the amount of amortizable bond premium allocable (based on the Note's yield to maturity) to that year. Any such election would apply to all bonds (other than bonds the interest on which is excludable from gross income) held by the holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the holder, and is irrevocable without the consent of the Internal Revenue Service. Amortizable bond premium on a Note denominated in a foreign currency will, if a holder so elects, reduce the amount of foreign currency interest income on the Note. An electing holder will recognize exchange gain or loss at the time it offsets the portion of the premium amortized with respect to any period against the interest income for such period. Election to Treat All Interest as Original Issue Discount A holder may elect to treat all interest on any Note as original issue discount and calculate the amount includable in gross income under the constant yield method described above. For purposes of this election, interest includes stated interest, acquisition discount, original issue discount, de minimis original issue discount, market discount, de minimis market discount and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. The election is made for the year in which the holder acquired the Note, and may not be revoked without the consent of the Internal Revenue Service. Purchase, Sale and Retirement of the Notes A holder's tax basis in a Note generally will be its cost, increased by the amount of any original issue discount included in the holder's income with respect to the Note and reduced by the amount of any cash payments on the Note that are not qualified stated interest payments and by the amount of any amortizable bond premium applied to reduce interest on the Note. In the case of a Note denominated, and purchased, in a foreign currency, the holder's initial tax basis will be the U.S. dollar value of the foreign currency on the date of purchase of the Note (or, in certain circumstances, on the settlement date of the transaction). A holder will recognize gain or loss on the sale or retirement of a Note equal to the difference between the amount realized on the sale or retirement and the holder's tax basis in the Note. The amount realized on a sale or retirement for an amount in a foreign currency will be the U.S. dollar value of that currency on the date of such sale or retirement (or, in certain circumstances, on the settlement date of the transaction). As a general rule (with the exception, among other things, of amounts attributable to accrued but unpaid interest, amounts attributable to changes in exchange rates, and amounts received with respect to certain Short-Term Notes), gain or loss recognized on the sale or retirement of a Note will be capital gain or loss and will be long-term capital gain or loss if the Note was held for more than one year. In the case of non-corporate holders, such long-term capital gain generally will be subject to a maximum tax rate of 20% if the Note was held for more than one year. Gain or loss recognized by a holder on the sale or retirement of a Note denominated in a foreign currency will be treated as ordinary income or loss to the extent such gain or loss is attributable to changes in exchange rates. However, exchange gain or loss is taken into account only to the extent of total gain or loss realized on the transaction. On January 17, 2000, the Treasury Department finalized proposed regulations regarding debt instruments denominated in a hyperinflationary currency. These regulations require that certain United States Holders apply mark-to-market treatment to a Note denominated in certain hyperinflationary currencies for purposes of determining foreign currency gain or loss. These regulations are effective for transactions entered into on or after February 14, 2000. A foreign currency note will be considered to be a debt instrument denominated in a hyperinflationary currency if it is denominated in a specified currency of a country in which there is a cumulative inflation of at least 100% during the 36 calendar month base period specified in the regulations. Exchange of Amounts in Foreign Currency Foreign currency received on the sale or retirement of a Note will generally have a tax basis equal to the U.S. dollar value of that currency at the time of such sale or retirement. Foreign currency received as interest on a Note will have a tax basis equal to its U.S. dollar value on the date such interest was received. Foreign currency that is purchased generally will have a tax basis equal to the U.S. dollar cost of acquisition. Any gain or loss recognized on a sale or other disposition of foreign currency (including its use to purchase Notes or upon exchange for U.S. dollars) will be ordinary income or loss. Backup Withholding A holder of a Note may be subject to backup withholding at a rate of 31% with respect to payments of principal and any premium or interest (including original issue discount) made on the Note or the proceeds of a sale or exchange of the Note unless such holder (a) is a corporation or comes within certain other exempt categories ("exempt recipients") and, when required, demonstrates this fact, or (b) provides a taxpayer identification number, certifies that the holder is not subject to backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. Generally, individuals are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. A holder of a Note that does not provide Countrywide Home Loans, or its agent, with a correct taxpayer identification number or an adequate basis for exemption may be subject to penalties imposed by the Internal Revenue Service. The backup withholding tax is not an additional tax and will generally be credited against a holder's United States federal income tax liability provided the required information is furnished to the Internal Revenue Service. Payments made in respect of the Notes to a United States Holder must be reported to the IRS, unless the United States Holder is an exempt recipient or establishes an exemption. PLAN OF DISTRIBUTION OF NOTES Under the terms of a Selling Agency Agreement (the "Agency Agreement"), the Notes are offered on a continuous basis by Countrywide Home Loans through Lehman Brothers Inc., Banc of America Securities LLC, Chase Securities Inc., Deutsche Bank Alex. Brown Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc. and Countrywide Securities Corporation (the "Agents"), each of which has agreed to use its reasonable best efforts to solicit purchases of the Notes. Countrywide Home Loans will pay to each Agent a commission, in the form of a discount, ranging from .125% to .750% of the principal amount of any Note (or in the case of any Original Issue Discount Security, the price to the public), depending on its maturity, sold through such Agent, except that the commission payable by Countrywide Home Loans to the Agents with respect to Notes with maturities of greater than 30 years will be negotiated at the time Countrywide Home Loans issues such Notes. Each Agent will have the right, in its discretion reasonably exercised, to reject in whole or in part any offer to purchase Notes received by such Agent. Countrywide Home Loans will have the sole right to accept offers to purchase Notes and may reject any such offer in whole or in part. Countrywide Home Loans also may sell Notes to an Agent, acting as principal, at a discount to be agreed upon at the time of sale, for resale to one or more investors or other purchasers at varying prices related to prevailing market prices at the time of such resale, as determined by such Agent or, if so specified in the applicable Pricing Supplement, for resale at a fixed public offering price. Countrywide Home Loans reserves the right to sell Notes from time to time directly on its own behalf to investors or through other agents, dealers or underwriters; if Countrywide Home Loans grants any discount or pays any commission to such persons, such discount or commission will be disclosed in the applicable Pricing Supplement. In addition, the Agents may offer the Notes they have purchased as principal to other dealers. The Agents may sell Notes to any dealer at a discount and such discount allowed to any dealer may be all or part of the discount to be received by such Agent from Countrywide Home Loans. Unless otherwise indicated in the applicable Pricing Supplement, any Note sold to an Agent as principal will be purchased by such Agent at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to an agency sale of a Note of identical maturity, and may be resold by the Agent to investors and other purchasers from time to time in one or more transactions, including negotiated transactions, at fixed prices or at varying prices as described above. After the initial public offering of Notes to be resold to investors and other purchasers, the public offering price (in the case of Notes to be resold on a fixed price basis), concession and discount may be changed. Payment of the purchase price of the Notes will be required to be made in immediately available funds in The City of New York on the date of settlement. See "Description of Notes -- General." Until the distribution of the Notes is completed, rules of the Securities and Exchange Commission may limit the ability of the Agents and certain selling group members to bid for and purchase the Notes. As an exception to these rules, the Agents are permitted to engage in certain transactions that stabilize the price of the Notes. Such transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the Notes. If the Agents create a short position in the Notes in connection with the offering (i.e., if they sell more Notes than are set forth on the cover page of this Prospectus Supplement or the applicable Pricing Supplement) the Agents may reduce that short position by purchasing Notes in the open market. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases. None of Countrywide Home Loans, Countrywide Credit Industries or any of the Agents makes any representation or prediction as to the direction or magnitude or any effect that the transactions described above may have on the price of the Notes. In addition, none of Countrywide Home Loans, Countrywide Credit Industries or any of the Agents makes any representation that the Agents will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice. The Agents may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). Countrywide Home Loans and Countrywide Credit Industries have agreed to indemnify each Agent against certain liabilities, including liabilities under the Securities Act, or to contribute to payments an Agent may be required to make in respect thereof. Countrywide Home Loans and Countrywide Credit Industries have agreed to reimburse the Agents for certain expenses, including fees and disbursements of counsel to the Agents. Countrywide Home Loans has been advised by the Agents that they may from time to time purchase and sell Notes in the secondary market, but that they are not obligated to do so. No assurance can be given that there will be a secondary market for the Notes or liquidity in the secondary market if one develops. The distribution of the Notes will conform to the requirements set forth in the applicable sections of Rule 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc. Certain of the Agents or their affiliates may engage from time to time in various general financing and banking transactions with Countrywide Home Loans and Countrywide Credit Industries. VALIDITY OF NOTES The validity of the Notes will be passed upon for Countrywide Credit Industries and Countrywide Home Loans by Munger, Tolles & Olson LLP, Los Angeles, California. The statements under "Certain Federal Income Tax Consequences," to the extent they constitute statements of law, are set forth herein in reliance upon the opinion of Munger, Tolles & Olson LLP, Los Angeles, California. Brown & Wood LLP, New York, New York will serve as counsel to the Agents. Brown & Wood LLP also serves as counsel for CWMBS, Inc. and CWABS, Inc., each a wholly owned subsidiary of Countrywide Credit Industries, in connection with offerings of mortgage-backed and asset-backed securities, and from time to time also serves as counsel for Countrywide Credit Industries on other matters. 27 PROSPECTUS Countrywide Credit Industries, Inc. [COUNTRYWIDE CREDIT INDUSTRIES, INC. LOGO] Common Stock, Preferred Stock and Stock Purchase Contracts Countrywide Home Loans, Inc. Debt Securities Payment of Principal, Premium, if any, and Interest Unconditionally Guaranteed by Countrywide Credit Industries, Inc. ---------------- Through this prospectus, we may periodically offer: o shares of our common stock; o shares of our preferred stock; and/or o contracts to purchase shares of our common stock or preferred stock, and our subsidiary, Countrywide Home Loans, may periodically offer its debt securities. The prices and other terms of the securities that we or Countrywide Home Loans will offer will be determined at the time of their offering. We will guarantee all payments of principal of and any premium and interest on any debt securities offered by Countrywide Home Loans. The offering price of all securities issued under this prospectus may not exceed $6,000,000,000. Our common stock trades on the New York Stock Exchange under the symbol "CCR." We will list any shares of our common stock sold under this prospectus on the New York Stock Exchange. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. ---------------- The date of this prospectus is , 2001. You should rely only on the information contained or incorporated by reference in this prospectus and in any prospectus supplement accompanying this prospectus and that we or Countrywide Home Loans have referred you to. Neither we nor Countrywide Home Loans has authorized anyone to provide you with information that is different. You should not assume that the information in this prospectus or in any prospectus supplement is accurate as of any date other than the date on the front of those documents. ---------------- References in this prospectus to "Countrywide Credit Industries," "we," "us" and "our" are to Countrywide Credit Industries, Inc. References in this prospectus to "Countrywide Home Loans" are to Countrywide Home Loans, Inc. ---------------- ADDITIONAL INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public at the SEC's web site at http://www.sec.gov and at the public reference rooms of the New York Stock Exchange, 20 Broad Street, New York, New York and the Pacific Stock Exchange, 115 Sansome Street, San Francisco, California. The SEC allows us to "incorporate by reference" the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, other than those portions of such documents (1) described in paragraphs (i), (k) and (l) of Item 402 of Regulation S-K promulgated by the SEC or (2) furnished under Item 9 of a Current Report on Form 8-K, until all the securities offered under this prospectus are sold. This prospectus is part of the registration statement we filed with the SEC. 1. Annual Report on Form 10-K for the year ended February 29, 2000. 2. Quarterly Reports on Form 10-Q for the quarters ended May 31, 2000, August 30, 2000 and November 30, 2000. 3. Current Reports on Form 8-K, dated May 31, 2000, June 26, 2000, July 19, 2000 and February 6, 2001. You may request a copy of these filings, at no cost, by writing or telephoning us at Countrywide Credit Industries, Inc., 4500 Park Granada, Calabasas, California 91302, telephone (818) 225-3000, Attention: Investor Relations. COUNTRYWIDE CREDIT INDUSTRIES AND COUNTRYWIDE HOME LOANS Countrywide Credit Industries, Inc. We are a holding company that, through our wholly-owned subsidiaries, offers various financial services. Our principal subsidiary, Countrywide Home Loans, originates, purchases, securitizes, sells and services residential mortgage loans, which are principally prime credit quality first-lien mortgage loans secured by single (one- to four-) family residences. Our other subsidiaries offer ancillary financial products and services that complement our mortgage banking business. We have six major segments that are grouped into consumer and institutional businesses. Consumer businesses include Mortgage Originations, Mortgage-Related Investments and Business to Consumer Insurance. Our institutional businesses include Processing and Technology, Capital Markets and Business to Business Insurance. Our Mortgage Originations segment originates mortgage loans through our retail branch network. This network includes the consumer markets division of Countrywide Home Loans as well as Full Spectrum Lending, Inc. The consumer markets division originates prime credit quality first- and second-lien mortgages and home equity lines of credit that are secured by single (one- to four-) family residences. Full Spectrum Lending, Inc. originates these same products for sub-prime credit borrowers. This segment also includes the wholesale division of Countrywide Home Loans. Through this division, we originate prime credit quality first-lien mortgages, home equity lines of credit and sub-prime loans via mortgage loan brokers and other financial intermediaries. Further, through Landsafe, Inc. and its subsidiaries, this segment provides other services that complement the origination process, including title insurance, escrow services, appraisals, credit reporting, flood zone determinations and real property profiles. Our Mortgage-Related Investments segment invests in assets retained in the mortgage securitization process, including mortgage servicing rights and residual interests in asset-backed securities. In addition, through this segment, we provide certain loan servicing functions that are commonly out-sourced by other loan servicers, such as tax bill monitoring, trustee services, real estate owned management and real property field inspection services. Our Business to Consumer Insurance segment operates Countrywide Insurance Services, Inc., a full service insurance agency offering homeowners, fire, flood, earthquake, life, disability and other insurance products from the carriers it represents. Our Processing and Technology segment sub-services our own loan servicing portfolio and provides sub-servicing and/or processing services to other domestic and foreign financial institutions. Included in this segment are the operations of Global Home Loans Limited, a joint venture between us and Woolwich plc that provides loan processing services for loans originated in the United Kingdom. Our Capital Markets segment operates Countrywide Capital Markets, Inc. and its two subsidiaries -- Countrywide Securities Corporation and Countrywide Servicing Exchange. Countrywide Securities Corporation is a registered broker-dealer specializing in mortgage-backed securities and other mortgage-related securities. Countrywide Servicing Exchange is a national servicing brokerage and consulting firm that facilitates transactions between buyers and sellers of bulk servicing contracts and other mortgage-related assets. Also included in this segment is the correspondent lending division of Countrywide Home Loans, through which we purchase closed loans from mortgage bankers, commercial banks and other financial institutions. Our Business to Business Insurance segment operates Balboa Life Insurance Company and Balboa Insurance Company, insurance carriers that sell life insurance and property and casualty insurance policies. This segment also includes Second Charter Reinsurance Company, a mortgage reinsurance company that partially reinsures some of the mortgage loans originated by Countrywide Home Loans and insured by mortgage insurance companies. We are a Delaware corporation, originally incorporated in New York under the name of OLM Credit Industries, Inc. Our principal executive offices are located at 4500 Park Granada, Calabasas, California 91302, and our telephone number is (818) 225-3000. Countrywide Home Loans, Inc. As described above in "-- Countrywide Credit Industries, Inc.," Countrywide Home Loans and its subsidiaries originate, purchase, securitize, sell and service mortgage loans that are principally prime credit quality mortgage loans. Countrywide Home Loans also offers home equity loans and sub-prime credit quality loans. Countrywide Home Loans produces mortgage loans through three separate divisions. The consumer markets division originates prime credit quality mortgage loans and home equity loans by means of referrals from real estate agents and direct contact with consumers through its nationwide network of retail branch offices, its telemarketing systems and its site on the World Wide Web. The wholesale division produces prime credit quality mortgage loans and home equity loans through mortgage brokers and other financial intermediaries. Through the correspondent lending division, Countrywide Home Loans purchases loans from other mortgage bankers, commercial banks, savings and loan associations, credit unions and other financial intermediaries. Countrywide Home Loans customarily sells substantially all loans that it originates or purchases. To guarantee timely and full payment of principal and interest on Fannie Mae securities, Freddie Mac securities and Ginnie Mae securities and to transfer credit risk of the loans, Countrywide Home Loans pays guarantee fees to these agencies. Countrywide Home Loans and its subsidiary, Countrywide Home Loans Servicing LP, service on a non-recourse basis substantially all of the mortgage loans that Countrywide Home Loans originates or purchases under servicing agreements with Fannie Mae, Freddie Mac, Ginnie Mae and various investors. In addition, Countrywide Home Loans purchases bulk servicing contracts, also on a non-recourse basis, to service single-family residential mortgage loans originated by other lenders. Servicing mortgage loans includes collecting and remitting loan payments, answering questions from customers, making advances when required, accounting for principal and interest, holding custodial (impound) funds for payment of property taxes and hazard insurance, making any physical inspections of the property, counseling delinquent mortgagors, supervising foreclosures and property dispositions in the event of unremedied defaults and generally administering the loans. Countrywide Home Loans receives a fee for servicing mortgage loans ranging generally from 1/4% to 1/2% annually on the declining principal balances of the loans. Countrywide Home Loans has sold, and may sell in the future, a portion of its portfolio of loan servicing rights to other mortgage servicers. The principal sources of Countrywide Home Loans' revenue are: (1) loan origination fees; (2) any gains from the sale of loans; (3) interest earned on mortgage loans during the period that they are held by Countrywide Home Loans pending sale, net of interest paid on funds borrowed to finance those mortgage loans; (4) loan servicing fees; and (5) interest benefit derived from the custodial balances associated with Countrywide Home Loans' servicing portfolio. Countrywide Home Loans' principal financing needs are the financing of its mortgage loan inventory and the investment in mortgage servicing rights. To meet these needs, Countrywide Home Loans currently utilizes commercial paper supported by its revolving credit facility, medium-term notes, mortgage repurchase agreements, pre-sale funding facilities, an optional cash purchase feature in the dividend reinvestment plan, redeemable capital trust pass-through securities and cash flows from operations. In the past, Countrywide Home Loans has utilized whole loan repurchase agreements, servicing-secured bank facilities, private placements of unsecured notes and other financings, direct borrowings from its revolving credit facility and public offerings of preferred and common stock. Countrywide Home Loans is a New York corporation, originally incorporated in 1969. Its principal executive offices are located at 4500 Park Granada, Calabasas, California 91302, and its telephone number is (818) 225-3000. USE OF PROCEEDS Except as we may otherwise state in any prospectus supplement, we and/or Countrywide Home Loans intend to use the net proceeds from the sale of the securities described in this prospectus for general corporate purposes, including the retirement of debt and the investment in servicing rights through the current production of loans and the bulk acquisition of contracts to service loans, and for acquisitions. SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth our selected consolidated financial data. The information for the nine months ended November 30, 2000 and 1999, was derived from the unaudited Consolidated Financial Statements included in our Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2000, filed on January 16, 2001. In the opinion of management, this information includes all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of such data. Our results for the nine months ended November 30, 2000, are not necessarily indicative of the results to be expected for the fiscal year ending on February 28, 2001. The information for the fiscal years ended February 29 (28), 2000, 1999, 1998, 1997 and 1996, was derived from the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the respective years. Nine Months Ended Years Ended February 29 (28), -------------------- --------------------------------------------------- November 30, 2000 1999 2000 1999 1998 1997 1996 -------------- ----------- -------- ---------- -------- -------------- --------- (amounts in thousands, except Per Share and Operating Data) Selected Statement of Earnings Data(1): Revenues: Loan origination fees.............. $273,869 $344,036 $406,458 $623,531 $301,389 $193,079 $199,724 Gain on sale of loans ............. 433,267 444,618 557,743 699,433 417,427 247,450 92,341 -------- --------- --------- --------- --------- --------- --------- Loan production revenue............ 707,136 788,654 964,201 1,322,964 718,816 440,529 292,065 Interest earned.................... 964,732 772,724 998,646 1,029,066 584,076 457,005 364,531 Interest charges................... (967,566) (695,932) (922,225) (977,326) (564,640) (418,682) (333,140) --------- --------- --------- --------- --------- --------- --------- Net interest (charges) income...... (2,834) 76,792 76,421 51,740 19,436 38,323 31,391 Loan servicing income.............. 870,461 737,795 996,861 842,583 734,982 614,355 499,638 Amortization and impairment/recovery of mortgage servicing rights, net of servicing hedge............ (413,850) (352,264) (445,138) (600,766) (328,845) (226,686) (142,676) --------- --------- --------- --------- --------- --------- --------- Net loan administration income.... 456,611 385,531 551,723 241,817 406,137 387,669 356,962 Net premiums earned 199,567 17,457 75,785 12,504 5,643 1,995 -- Commissions, fees and other income. 147,007 154,144 158,262 175,363 132,574 89,351 63,642 Gain on sale of subsidiary........ -- 4,424 4,424 -- 57,381 -- -- --------- --------- --------- --------- --------- --------- --------- Total revenues............... 1,507,487 1,427,002 1,830,816 1,804,388 1,339,987 957,867 744,060 --------- --------- --------- --------- --------- --------- --------- Expenses: Salaries and related expenses..... 557,365 528,830 689,768 669,686 424,321 286,884 229,668 Occupancy and other office expenses. 203,984 206,893 270,014 264,574 179,308 126,261 102,527 Marketing expenses................ 57,310 56,454 72,930 64,510 42,320 34,255 27,115 Insurance net losses.............. 78,261 -- -- -- -- -- -- Other operating expenses.......... 187,800 126,016 166,906 173,813 128,492 88,569 58,550 --------- --------- --------- --------- --------- --------- --------- Total expenses............... 1,084,720 918,193 1,199,618 1,172,583 774,441 535,969 417,860 --------- --------- --------- --------- --------- --------- --------- Earnings before income taxes...... 422,767 508,809 631,198 631,805 565,546 421,898 326,200 Provision for income taxes........ 152,860 198,363 220,955 246,404 220,563 164,540 130,480 --------- --------- --------- --------- --------- --------- --------- Net earnings................. $ 269,907 $ 310,446 $ 410,243 $ 385,401 $ 344,983 $ 257,358 $ 195,720 ======== ======== ======== ======== ======== ======== ======== Per Share Data(2): Basic(3).......................... $ 2.36 $ 2.75 $ 3.63 $ 3.46 $ 3.21 $ 2.50 $ 1.99 Diluted(3)........................ 2.29 2.65 3.52 3.29 3.09 2.44 1.95 Cash dividends per share.......... 0.30 0.30 0.40 0.32 0.32 0.32 0.32 Weighted Average Shares Outstanding: Basic...........................114,359,000 112,992,000 113,083,000 111,414,000 107,491,000 103,112,000 98,352,000 Diluted.........................117,994,000 117,045,000 116,688,000 117,045,000 111,526,000 105,677,000 100,270,000 Selected Balance Sheet Data at End of Period(1): Mortgage loans and mortgage- backed securities shipped and held for sale..................... $2,286,408 $3,556,272 $2,653,183 $6,231,220 $5,292,191 $2,579,972 $4,470,087 Total assets...................... 20,799,467 15,570,455 15,822,328 15,648,256 12,183,211 7,689,090 8,321,652 Short-term debt................... 6,740,648 2,352,621 2,529,302 3,982,435 3,279,489 2,345,663 4,185,718 Long-term debt.................... 7,149,274 7,218,323 7,253,323 5,953,324 4,195,732 2,367,661 1,911,800 Common shareholders' equity....... $3,208,802 $2,782,968 $2,887,879 $2,518,885 $2,087,943 $1,611,531 $1,319,755 Operating Data (dollar amounts in millions): Loan servicing portfolio(4)....... $ 281,522 $ 244,024 $ 250,192 $ 215,489 $ 182,889 $ 158,585 $ 136,835 Volume of loans originated........ $ 48,452 $ 55,533 $ 66,740 $ 92,881 $ 48,772 $ 37,811 $ 34,584 Ratio of earnings to fixed charges(5)........................ 1.43 1.72 1.67 1.64 1.98 1.99 1.96
- ---------- (1) Certain amounts in the consolidated financial statements of Countrywide Credit Industries have been reclassified to conform to the fiscal year February 29, 2000 presentation. (2) Adjusted to reflect the subsequent stock dividends and splits. (3) Earnings per share for the fiscal year ended February 28, 1998 include a $57.4 million gain on sale of subsidiary. Excluding the non-recurring gain on sale of subsidiary, basic and diluted earnings per share would have been $2.88 and $2.78, respectively. (4) Includes warehoused loans and loans under subservicing agreements. (5) For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income before U.S. federal income taxes, plus fixed charges. Fixed charges include interest expense on debt and the portion of rental expenses that is considered to be representative of the interest factor (one-third of operating leases). DESCRIPTION OF CAPITAL STOCK The following description of our capital stock is not complete and is qualified in its entirety by reference to our restated certificate of incorporation and to any certificate of designations that we will file with the SEC if we offer preferred stock under this prospectus. We have filed a copy of our restated certificate of incorporation as an exhibit to the registration statement of which this prospectus is part. Common Stock We have authorized under our restated certificate of incorporation 240,000,000 shares of common stock, par value $.05 per share. As of February 1, 2001, 116,880,209 shares of our common stock were issued and outstanding and were held by 1,989 record holders. Each record holder of our common stock is entitled to cast one vote per share on all matters submitted to a vote of our stockholders. We may pay dividends to the record holders of our common stock only when, as and if declared by our board of directors, out of funds legally available for those dividends. Each share of our common stock shares equally in those dividends and in other distributions to holders of our common stock, including distributions made if we liquidate, dissolve or wind up our affairs. Our common stock carries no preemptive, conversion, subscription, redemption, sinking fund or cumulative voting rights. Preferred Stock Purchase Rights In February 1988, our board of directors declared a dividend of one preferred stock purchase right for each outstanding share of our common stock. As the result of stock splits and stock dividends, 0.399 of a stock purchase right is presently associated with each outstanding share of our common stock, and 0.399 of a stock purchase right will be associated with each share of our common stock that is issued prior to the Distribution Date (as defined below). Each stock purchase right, when exercisable, allows its holder to purchase from us one one-hundredth of a share of our Series A Participating Preferred Stock, par value $0.05 per share, at a price of $145, subject to adjustments in some instances to prevent dilution. These stock purchase rights are evidenced by our common stock certificates and may not be exercised or transferred apart from our common stock until of the earlier of the date (the "Distribution Date") of a public announcement that a person or group without our prior consent has acquired 20% or more of our common stock (an "Acquiring Person") or the date that is ten days (subject to extension by our board of directors) after a tender offer for our common stock is commenced without our prior consent. If any person becomes an Acquiring Person, each stock purchase right (except those owned by the Acquiring Person) will allow its holder to purchase, at the then current exercise price of the stock purchase right, the number of shares of our common stock, or their equivalent, that, at the time of the transaction, would have a market value of two times the exercise price of the stock purchase right. Our board of directors may delay the ability to exercise the stock purchase rights during the period in which they are exercisable only for our Series A Participating Preferred Stock (and not our common stock). If after a person has become an Acquiring Person we are acquired in a merger or other business combination, each stock purchase right (except those held by the Acquiring Person) will entitle its holder to purchase, at the then current exercise price of the stock purchase right, the number of shares of our common stock, or their equivalent, of the other party (or its publicly traded parent company) to the merger or business combination that at the time of the transaction would have a market value of two times the exercise price of the stock purchase right. The stock purchase rights expire on the earliest of February 28, 2002, the date certain merger transactions close or the date we elect to redeem the stock purchase rights before any person becomes an Acquiring Person. Preferred Stock We have authorized under our restated certificate of incorporation 1,500,000 shares of preferred stock, par value $.05 per share. We will describe the specific terms of any series of preferred stock we offer under this prospectus in a prospectus supplement relating to that series of preferred stock. Our board of directors is authorized to provide for the issuance of preferred stock in one or more series with the distinctive designations as may be stated in the resolution or resolutions providing for the issuance of that preferred stock. At the time that it authorizes any series of preferred stock, our board of directors will determine the number of shares constituting that series and its designation and fix the dividend rights, any conversion rights, any voting rights, redemption provisions, liquidation preferences and any other rights, preferences, privileges and restrictions of that series. At this time, our board of directors has authorized only two series of preferred stock for issuance. One of these series has been designated as Series A Participating Preferred Stock, which is issuable upon the exercise of our stock purchase rights. See "-- Preferred Stock Purchase Rights" above. The other series has been designated as Series B Cumulative Preferred Stock. Our board of directors could, without stockholder approval, cause us to issue preferred stock that has voting, conversion and other rights that could adversely affect the holders of our common stock or make it more difficult to cause a change in control of our company. The preferred stock could be used to dilute the stock ownership of persons seeking to obtain control of our company and thereby hinder a possible takeover attempt that, if stockholders were offered a premium over the market value of their shares, might be viewed as being beneficial to our stockholders. In addition, the preferred stock could be issued with voting, conversion and other rights and preferences that would adversely affect the voting power and other rights of holders of our common stock. Other Provisions of Our Restated Certificate of Incorporation and Our Bylaws In addition to the stock purchase rights described above under "-- Preferred Stock Purchase Rights" and the terms of any preferred stock that we may determine to issue as described above under "-- Preferred Stock," other provisions of our restated certificate of incorporation and our bylaws may make it more difficult for a third party to acquire, or may discourage a third party from attempting to acquire, control of our company. Our restated certificate of incorporation includes the following provisions: (1) It provides for a three-year staggered board of directors, vacancies on which may be filled by the board of directors and whose members may be removed only for cause and only by the vote of the holders of two-thirds of the outstanding shares of our common stock. (2) It limits our power to purchase shares of our voting stock from a five percent holder at a price exceeding its fair market value, unless the purchase is approved by holders of a majority of those voting shares (unless applicable law requires a greater vote), without the vote of that five percent holder. Voting stock is defined as capital stock that has the right to vote generally on matters relating to our company and any security that is convertible into that stock. (3) It prohibits action by written consent of our stockholders. (4) It provides that our bylaws may be amended by our board of directors or, with some exceptions, by a vote of two-thirds of our voting shares and further provides that a two-thirds vote of all of our voting shares is required to amend the provisions of our restated certificate of incorporation that are described in this section, unless the amendment has been approved by two-thirds of our board of directors and a majority of our continuing directors. Continuing directors are directors who became members of our board of directors before any stockholder who beneficially owns ten percent of the outstanding shares first became a ten percent stockholder. Our bylaws provide that special meetings of the stockholders may be called only by our directors and limits the business that may be transacted at those meetings to those matters set forth in the request of the proposed meeting. Transfer Agent and Registrar The transfer agent and registrar for our common stock is The Bank of New York. DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS Unless we otherwise indicate in the applicable prospectus supplement, we may issue stock purchase contracts, including contracts that would require holders to purchase from us and for us to sell to them, a specified number of shares of our common stock or preferred stock at a future date or dates. We may fix what the consideration per share of common stock or preferred stock will be when we issue the stock purchase contracts, and this consideration may be determined by a formula that is described in the stock purchase contracts. We may issue the stock purchase contracts separately or as part of stock purchase units consisting of a stock purchase contract and debt securities, preferred stock or debt obligations of third parties, including U.S. Treasury securities, that secure the holders' obligations to purchase our common stock or preferred stock under the stock purchase contracts. The stock purchase contracts may require us to make periodic payments to the holders of the stock purchase units or vice versa, and those payments may be unsecured or prefunded on some basis. The stock purchase contracts may require holders to secure their obligations under the stock purchase contracts in a specified manner. Pledged Securities and Pledge Agreement The securities subject to the stock purchase contracts (the "Pledged Securities") will be pledged to a collateral agent, for our benefit, under the terms of a pledge agreement. The Pledged Securities will secure the obligations of holders of stock purchase contracts to purchase shares of our common stock or preferred stock under the stock purchase contracts. The rights of holders of stock purchase contracts to the related Pledged Securities will be subject to our security interest therein created by the pledge agreement. No holder of stock purchase contracts may withdraw the underlying Pledged Securities from the pledge arrangement except upon the termination or early settlement of the stock purchase contracts. Subject to that security interest and the terms of a purchase contract agreement and the pledge agreement, each holder of a stock purchase contract will keep full beneficial ownership of the related Pledged Securities. Except as we may describe in the applicable prospectus supplement, the collateral agent will, upon receipt of distributions on the Pledged Securities, distribute those payments to us or to the purchase contract agent, as provided in the pledge agreement. The purchase contract agent will in turn distribute payments it receives as provided in the purchase contract agreement. We will describe the terms of any stock purchase contracts or stock purchase units that we offer under this prospectus in a prospectus supplement. The description in the prospectus supplement will not necessarily be complete and will be qualified in its entirety by reference to the stock purchase contracts and, if applicable, collateral arrangements and depositary arrangements, relating to such stock purchase contracts or stock purchase units. DESCRIPTION OF DEBT SECURITIES OF COUNTRYWIDE HOME LOANS AND RELATED GUARANTEES OF COUNTRYWIDE CREDIT INDUSTRIES The following description summarizes some of the general terms and conditions of the debt securities that Countrywide Home Loans may issue under this prospectus (the "CHL debt securities"). Countrywide Home Loans will describe the particular terms of any CHL debt securities that it offers and the extent to which the general provisions below will apply to those CHL debt securities in a prospectus supplement relating to those CHL debt securities. Countrywide Home Loans will issue CHL debt securities either (1) under an Indenture, dated as of January 1, 1992, as amended by Supplemental Indenture No. 1, dated as of June 15, 1995 (as it may be further amended or supplemented, the "CHL senior indenture"), among Countrywide Home Loans, Countrywide Credit Industries, as guarantor (the "Guarantor"), and The Bank of New York, as trustee (the "CHL senior trustee"), or (2) under a subordinated debt indenture (the "CHL subordinated indenture") to be entered into among Countrywide Home Loans, the Guarantor and The Bank of New York, as trustee (the "CHL subordinated trustee"). Any series of CHL debt securities that Countrywide Home Loans issues under the CHL senior indenture will constitute unsubordinated debt of Countrywide Home Loans ("CHL senior debt securities") and will rank senior to any series of CHL debt securities that Countrywide Home Loans issues under the CHL subordinated indenture ("CHL subordinated debt securities"). Countrywide Home Loans will issue each series of CHL debt securities under the terms of an amendment or supplement to the applicable CHL indenture that takes the form of a supplemental indenture or an officers' certificate delivered under the authority of resolutions adopted by Countrywide Home Loans' board of directors and the terms of that CHL indenture. The terms of any CHL debt securities will include those stated in the applicable CHL indenture and those made part of that CHL indenture by reference to the Trust Indenture Act. The CHL debt securities will be subject to all those terms, and we refer the holders of CHL debt securities to the applicable CHL indenture and the Trust Indenture Act for a statement of those terms. The following summaries of various provisions of the CHL indentures and the CHL debt securities are not complete and are qualified in their entirety by reference to the provisions of the CHL indentures, including the definitions of capitalized terms used in this section without definition. Unless we otherwise indicate, capitalized terms have the meanings given them in the applicable CHL indenture. The applicable prospectus supplement will specify whether the CHL debt securities that Countrywide Home Loans issues will be senior, senior subordinated or subordinated (including, if applicable, junior subordinated) debt. The CHL debt securities may be issued as part of units consisting of CHL debt securities and securities that we may offer under this prospectus. If Countrywide Home Loans issues debt securities as part of units of CHL debt securities and securities that we may issue under this prospectus, we and Countrywide Home Loans will describe any applicable material federal income tax consequences to holders in the applicable prospectus supplement. Senior Indenture General The CHL senior indenture does not limit the aggregate principal amount of CHL senior debt securities that Countrywide Home Loans may issue periodically in series. The CHL senior debt securities will be unsecured and unsubordinated indebtedness of Countrywide Home Loans and will rank equally in right of payment with Countrywide Home Loans' other unsecured and unsubordinated indebtedness. A substantial portion of the assets of Countrywide Home Loans may be pledged under various credit agreements among Countrywide Home Loans and various lending institutions. We refer you to the prospectus supplement and any pricing supplement relating to any particular series of CHL senior debt securities offered by Countrywide Home Loans for a description of the terms of those CHL senior debt securities, including, where applicable: (1) the title of those CHL senior debt securities; (2) any limit on the aggregate principal amount of those CHL senior debt securities; (3) the date or dates (or any method or methods by which that date or those dates will be determined or extended) on which the principal of those CHL senior debt securities is payable; (4) any places other than the Countrywide Home Loans' office or agency in The City of New York where those CHL senior debt securities will be payable or surrendered for registration of transfer or exchange; (5) the denominations in which those CHL senior debt securities will be issuable; (6) the currency in which those CHL senior debt securities may be denominated, which may be U.S. dollars or any foreign currency or currency unit, and, if applicable, other information regarding that foreign currency or currency unit; (7) the designation of the currency or currencies in which payment of the principal of and any premium and interest on those CHL senior debt securities will be made and whether payment of the principal of or any premium or the interest on CHL senior debt securities designated in a foreign currency or currency unit, at the holder's election, may instead be payable in U.S. dollars and the terms and conditions upon which that election may be made; (8) any rate or rates (which may be fixed or floating) at which those CHL senior debt securities will bear interest (or any method or methods by which that rate or those rates are to be determined or reset), any date or dates from which that interest will accrue (or any method or methods by which that date or those dates will be determined or reset), the dates on which that interest will be payable, the record date for the interest payable on any interest payment date, and the basis upon which interest will be calculated if other than that of a 360-day year of twelve 30-day months; (9) any terms and conditions on which those CHL senior debt securities may be redeemed at Countrywide Home Loans' option or repaid at the holders' option; (10) any obligation of Countrywide Home Loans to redeem, repay or purchase those CHL senior debt securities under the terms of any sinking fund or analogous provisions, and the terms and conditions on which those CHL senior debt securities will be redeemed, repaid or purchased, in whole or in part, under the terms of that obligation; (11) if other than the principal amount, the portion of the principal amount of those CHL senior debt securities that will be payable upon declaration of acceleration of the maturity of those CHL senior debt securities; (12) any provisions for the defeasance of those CHL senior debt securities; (13) any ability a holder of a CHL senior debt security may have to renew all or any portion of a CHL senior debt security; (14) any additional Events of Default or restrictive covenants applicable to those CHL senior debt securities; (15) any other terms not inconsistent with the CHL senior indenture, including any terms which may be required by or advisable under United States laws or regulations; (16) if those CHL senior debt securities are denominated or payable in a currency or currency unit other than U.S. dollars, the designation of the initial Exchange Rate Agent and, if other than as set forth in the CHL Indenture, the definition of the "Exchange Rate"; and (17) the form of those CHL senior debt securities and, if in global form, the name of the depositary and the terms upon which and the circumstances under which those CHL senior debt securities may be exchanged. Unless Countrywide Home Loans otherwise indicates in the applicable prospectus supplement, Countrywide Home Loans will issue CHL senior debt securities only in fully registered form without coupons. CHL senior debt securities denominated in U.S. dollars will be issued in denominations of $1,000 or integral multiples of $1,000 unless Countrywide Home Loans otherwise provides in the applicable prospectus supplement. The prospectus supplement relating to a series of CHL senior debt securities denominated in a foreign currency or currency unit will specify the denominations in which those CHL senior debt securities may be issued. The CHL senior indenture does not contain any provisions that would limit the ability of Countrywide Home Loans or any of its affiliates to incur indebtedness (secured or unsecured) or that would afford holders of CHL senior debt securities protection in the event of a highly leveraged transaction, restructuring, change in control, merger or similar transaction involving Countrywide Home Loans that may adversely affect holders of the CHL senior debt securities. Countrywide Home Loans may sell one or more series of CHL senior debt securities at a substantial discount below their stated principal amount, and those CHL senior debt securities may bear no interest or interest at a rate that at the time of issuance is below market rate. One or more series of CHL senior debt securities may be floating rate debt securities and may be exchangeable for fixed rate debt securities. Countrywide Home Loans will describe any federal income tax consequences and special considerations applicable to any particular series in the applicable prospectus supplement. Unless Countrywide Home Loans otherwise indicates in the applicable prospectus supplement, the principal of, and any premium or interest on, any series of CHL senior debt securities will be payable, and those CHL senior debt securities will be exchangeable and transfers of them will be registrable, at the Corporate Trust Office of the CHL senior trustee, initially at 101 Barclay Street, New York, New York 10286. However, Countrywide Home Loans may elect to make interest payments by check mailed to the address of the person entitled to them as that address appears in the security register for those CHL senior debt securities. No CHL senior debt security will be entitled to any benefit under the CHL senior indenture or be valid or obligatory for any purpose unless there appears on that CHL senior debt security a certificate of authentication substantially in the form provided in the CHL senior indenture that is duly executed by the CHL senior trustee, and that certificate will be conclusive evidence and the only evidence that CHL senior debt security has been duly authenticated and delivered under and is entitled to the benefits of the CHL senior indenture. Events of Default The CHL senior indenture provides that the following are "Events of Default" that apply to any series of CHL senior debt securities: (1) default in payment of principal of (or any premium on) any CHL senior debt security of that series at maturity; (2) default for 30 days in payment of interest on any CHL senior debt security of that series when due; (3) default in the deposit of any sinking fund payment on any CHL senior debt security of that series when due; (4) default in the performance or breach of any other covenant or warranty of Countrywide Home Loans or the Guarantor in the CHL senior indenture, the CHL senior debt securities or the related Guarantees, continued for 60 days after written notice of default by the CHL senior trustee or the holders of at least 25% in aggregate principal amount of the then outstanding CHL senior debt securities of that series; (5) default resulting in acceleration of maturity of any other indebtedness for borrowed money of Countrywide Home Loans, the Guarantor or any direct or indirect subsidiary of the Guarantor in an amount exceeding $10,000,000 and that acceleration shall not be rescinded or annulled for a period of 10 days after written notice of the default by the CHL senior trustee or the holders of at least 25% in aggregate principal amount of the then outstanding CHL senior debt securities of that series; (6) certain events of bankruptcy, insolvency or reorganization; and (7) any other Event of Default applicable to that series of CHL senior debt securities. No Event of Default applicable to a particular series of CHL senior debt securities necessarily constitutes an Event of Default applicable to any other series of CHL senior debt securities. The CHL senior indenture provides that if an Event of Default occurs and continues, either the CHL senior trustee or the holders of at least 25% in aggregate principal amount of the CHL senior debt securities of that series then outstanding may declare the principal amount of those CHL senior debt securities (or, if they are Original Issue Discount Securities, the amount as provided in the terms of those Original Issue Discount Securities) to be due and payable immediately upon written notice of acceleration to Countrywide Home Loans. In some cases, the holders of a majority in aggregate principal amount of the outstanding CHL senior debt securities of that series may, on behalf of the holders of all those CHL senior debt securities, rescind and annul that declaration of acceleration. "Original Issue Discount Security" means, except as otherwise defined in a CHL senior debt security, any CHL senior debt security that is issued with original issue discount within the meaning of Section 1273(a) of the Internal Revenue Code of 1986 and related regulations. The agreements governing certain of Countrywide Home Loans' outstanding indebtedness contain provisions that would characterize some Events of Default under the CHL senior indenture as events of default under those agreements that could in turn result in, among other things, an acceleration of the indebtedness under those agreements. The CHL senior indenture contains a provision entitling the CHL senior trustee, subject to its duty to act with the required standard of care during default under any series of CHL senior debt securities, to be indemnified by the holders of the CHL senior debt securities of that series before exercising any right or power under the CHL senior indenture at the request of the holders of CHL senior debt securities of that series. The CHL senior indenture provides that no holders of CHL senior debt securities of any series may institute any proceedings, judicial or otherwise, to enforce the CHL senior indenture except if the CHL senior trustee fails to act for 60 days after it receives a written request to enforce the CHL senior indenture by the holders of at least 25% in aggregate principal amount of the then outstanding CHL senior debt securities of that series and an offer of reasonable indemnity. This provision will not prevent any holder of CHL senior debt securities from enforcing payment of the principal thereof and any premium and interest on those CHL senior debt securities when due. The holders of a majority in aggregate principal amount of the CHL senior debt securities of any series then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the CHL senior trustee or exercising any trust or power conferred on it with respect to those CHL senior debt securities. However, the CHL senior trustee may refuse to follow any direction that it determines would be illegal or would conflict with the CHL senior indenture or involve it in personal liability or that would unjustly prejudice holders of the CHL senior debt securities of that series not joining the proceeding. The CHL senior indenture provides that the CHL senior trustee will, within 90 days after a default occurs that affects the outstanding CHL senior debt securities of any series, give to the holders of those CHL senior debt securities notice of that default, unless that default has been cured or waived. Except in the case of a default in the payment of principal of, or any premium or interest on any CHL senior debt securities or payment of any sinking fund installment, the CHL senior trustee will be protected in the withholding of that notice if it determines in good faith that the withholding of that notice is in the interest of the holders of the CHL senior debt securities of that series. Countrywide Home Loans will be required to file with the CHL senior trustee annually an officers' certificate as to the absence of certain defaults under the terms of the CHL senior indenture. Modification and Waiver Countrywide Home Loans, the Guarantor and the CHL senior trustee may modify or amend the CHL senior indenture with the consent of the holders of a majority in aggregate principal amount of the outstanding CHL senior debt securities of each series affected by that modification or amendment; provided, however, that no modification or amendment may, without the consent of the holder of each outstanding CHL senior debt security affected: (1) except as the CHL Indenture otherwise permits for CHL senior debt securities for which the Stated Maturity is extendible, change the Stated Maturity of the principal of, or any installment of interest on, that CHL senior debt security; (2) reduce the principal amount of, or, except as the CHL Indenture otherwise permits for CHL senior debt securities for which the interest rate may be reset, interest on, or any premium payable upon redemption or repayment of, that CHL senior debt security; (3) reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of its Maturity; (4) adversely affect the right of repayment at the option of a holder of that CHL senior debt security; (5) reduce the amount of, or postpone the date fixed for, any payment under any sinking fund or analogous provisions of that CHL senior debt security; (6) change the place or currency or currency unit of payment of the principal of or any premium or interest on that CHL senior debt security; (7) change or eliminate the rights of a holder to receive payment in a designated currency; (8) impair the right to institute suit for the enforcement of any required payment on or with respect to that CHL senior debt security; (9) reduce the percentage of the aggregate principal amount of the outstanding CHL senior debt securities of any series the consent of whose holders is required to modify or amend the CHL senior indenture, to waive compliance with certain provisions of the CHL senior indenture, or to waive certain defaults; (10) modify any of the provisions of Section 613 (described below) except to increase the percentage or to provide that some other provisions of the CHL Indenture cannot be modified or waived without the consent of the holder of each outstanding CHL senior debt security affected by the modification or waiver; or (11) modify or affect the terms and conditions of the related Guarantees in a manner adverse to the interests of the holders of the CHL senior debt securities. The CHL senior indenture also contains provisions permitting Countrywide Home Loans, the Guarantor and the CHL senior trustee, without the consent of any holders of CHL senior debt securities, to enter into supplemental indentures for any of the following purposes: (1) to evidence the succession of another corporation to Countrywide Home Loans or the Guarantor and the assumption by that successor of the obligations and covenants of Countrywide Home Loans or the Guarantor contained in the CHL senior indenture, the CHL senior debt securities and the related Guarantees; (2) to add to the covenants of Countrywide Home Loans or the Guarantor for the benefit of the holders of all or any series of CHL senior debt securities (and if those covenants are to be for the benefit of less than all series of CHL senior debt securities, stating that those covenants are expressly being included solely for the benefit of that series), or to surrender any right or power in the CHL senior indenture conferred upon Countrywide Home Loans or the Guarantor; (3) to add any additional Events of Default (and if those Events of Default will be applied to less than all series of CHL senior debt securities, stating that those Events of Default are expressly being included solely to be applied to that series); (4) to add or change any of the provisions of the CHL senior indenture to the extent necessary to permit or facilitate the issuance of CHL senior debt securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; (5) to change or eliminate any provisions of the CHL senior indenture, provided that any of those changes or eliminations will become effective only when there is no CHL senior debt security outstanding of any series created before that supplemental indenture is executed which is entitled to the benefit of that provision; (6) to establish the form or terms of CHL senior debt securities of any series as otherwise permitted by the CHL senior indenture; (7) to evidence and provide for the acceptance of appointment under the CHL senior indenture by a successor CHL senior trustee for the CHL senior debt securities of one or more series issued under the CHL Indenture and to add to or change any of the provisions of the CHL senior indenture necessary to provide for or facilitate the administration of the trusts under the CHL senior indenture by more than one CHL senior trustee consistent with the requirements of the CHL senior indenture; (8) to secure the CHL senior debt securities issued under the CHL senior indenture; (9) to cure any ambiguity, to correct or supplement any provision in the CHL senior indenture which may be defective or inconsistent with any other provision of the CHL senior indenture, or to make any other provisions regarding matters or questions arising under the CHL senior indenture which will not be inconsistent with any provision of the CHL senior indenture, provided those other provisions will not adversely affect the interests of the holders of CHL senior debt securities of any series issued under the CHL senior indenture in any material respect; (10) to modify, eliminate or add to the provisions of the CHL senior indenture to the extent necessary to qualify the CHL senior indenture under the Trust Indenture Act or under any similar federal statute subsequently enacted and to add to the CHL senior indenture other provisions as may be expressly required under the Trust Indenture Act; or (11) to enable the Guarantor or one of its subsidiaries to assume the payment obligations under the CHL senior debt securities and the performance of every covenant to be performed or observed by Countrywide Home Loans under the CHL senior indenture. The holders of a majority in aggregate principal amount of the outstanding CHL senior debt securities of each series may, on behalf of all holders of CHL senior debt securities of that series, waive any past default under the CHL senior indenture affecting the CHL senior debt securities of that series except a default in the payment of the principal of (or any premium), or interest on, any CHL senior debt security of that series and a default in the compliance of a covenant or provision if the consent of the holder of each outstanding CHL senior debt security of that series would be required to modify or amend that covenant or provision. Consolidation, Merger and Transfer of Assets Under the CHL senior indenture, neither Countrywide Home Loans nor the Guarantor may consolidate with or merge into any corporation, or transfer its assets substantially as an entirety to any person, unless: (1) the successor corporation or transferee assumes Countrywide Home Loans' or the Guarantor's obligations on the CHL senior debt securities or the related Guarantees, as applicable, and under the CHL senior indenture, and in the case of a consolidation or merger of Countrywide Home Loans, the Guarantor delivers an affirmation of the continuance of its obligations to the CHL senior trustee; (2) after giving effect to the transaction, no Event of Default and no event that, after notice or lapse of time or both, would become an Event of Default will have occurred and be continuing; and (3) some other conditions are met. Satisfaction, Discharge and Defeasance The CHL senior indenture, with respect to any series of CHL senior debt securities (except for some specified surviving obligations, including (1) any rights of registration of transfer and exchange and (2) rights to receive the principal, any premium and interest on the CHL senior debt securities), will be discharged and cancelled upon the satisfaction of certain conditions, including the following: (1) all CHL senior debt securities of that series not previously delivered to the CHL senior trustee for cancellation have become due or payable, will become due and payable at their Stated Maturity within one year, or are to be called for redemption within one year; and (2) the deposit with the CHL senior trustee of an amount in the Specified Currency sufficient to pay the principal, any premium and interest to the Maturity of all CHL senior debt securities of that series. If Countrywide Home Loans so specifies in the prospectus supplement relating to CHL senior debt securities of any series, Countrywide Home Loans at its option: (1) will be discharged from any and all obligations under the CHL senior debt securities of that series (except for obligations to register the transfer or exchange of CHL senior debt securities of that series, replace stolen, lost or mutilated CHL senior debt securities of that series, maintain offices or agencies in each Place of Payment and hold moneys for payment in trust); or (2) will not be subject to provisions of the CHL Indenture described above under "Consolidation, Merger and Transfer of Assets" for the debt securities of that series, if Countrywide Home Loans irrevocably deposits with the CHL senior trustee, in trust, money or U.S. government obligations, which through interest and principal payments will provide a sufficient amount of money (in the opinion of independent public accountants) to pay all the principal (including any mandatory sinking fund payments) of, and any premium and interest on, the CHL senior debt securities of that series on the dates those payments are due consistent with the terms of those CHL senior debt securities. To exercise either option, Countrywide Home Loans must deliver to the CHL senior trustee: (1) an opinion of counsel stating that; (a) the deposit and related defeasance would not cause the holders of the CHL senior debt securities of that series to recognize income, gain or loss for federal income tax purposes; (b) the exercise of that option will not cause any violation of the Investment Company Act of 1940; and (c) if the CHL senior debt securities of that series are then listed on the New York Stock Exchange, those CHL senior debt securities would not be delisted as a result of the exercise of that option; and (2) if CHL senior debt securities of that series are being discharged, a ruling received from or published by the United States Internal Revenue Service to the effect that the deposit and related defeasance would not cause the holders of the CHL senior debt securities of that series to recognize income, gain or loss for federal income tax purposes. Guarantees The Guarantor will unconditionally guarantee (the "Guarantees") the payment of principal of and any premium and interest on the CHL senior debt securities when due and payable, whether at their Stated Maturity or upon redemption, repayment or otherwise. The Guarantees will rank equally in right of payment with all other unsecured and unsubordinated obligations of the Guarantor. The obligations of the Guarantor under the Guarantees will be unconditional regardless of the enforceability of the CHL senior debt securities or the CHL senior indenture and will not be discharged until all obligations under those CHL senior debt securities and the CHL senior indenture are satisfied. Holders of the CHL senior debt securities may proceed directly against the Guarantor if an Event of Default affecting those CHL senior debt securities occurs without first proceeding against Countrywide Home Loans. Because the Guarantor is a holding company, the rights of its creditors (including the holders of the CHL senior debt securities if the Guarantees are enforced) to share in the distribution of the assets of any subsidiary upon that subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors, except to the extent the Guarantor may itself be a creditor with recognized claims against the subsidiary. Global Securities Countrywide Home Loans may issue CHL senior debt securities of any series in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the prospectus supplement relating to that series. Global securities may be issued in either registered or bearer form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for individual certificates evidencing CHL senior debt securities in definitive form, a global security may not be transferred except as a whole by the depositary for that global security to a nominee of that depositary or by a nominee of that depositary to that depositary or another nominee of that depositary or by that depositary or that nominee to a successor of that depositary or a nominee of that successor. Countrywide Home Loans will describe the specific terms of the depositary arrangement for a series of CHL senior debt securities in the prospectus supplement relating to that series. Concerning the Trustee The Bank of New York is the trustee under the CHL senior indenture. Countrywide Home Loans and the Guarantor maintain banking relationships in the ordinary course of business with the CHL senior trustee. Among other things, The Bank of New York is a lending bank under an existing revolving credit facility of Countrywide Home Loans. Governing Law Unless Countrywide Home Loans otherwise specifies in the applicable prospectus supplement, the CHL senior indenture and the CHL senior debt securities will be governed by New York law. Subordinated Indenture General The CHL subordinated indenture will not limit the amount of additional indebtedness that Countrywide Home Loans or any of its subsidiaries may incur, except as Countrywide Home Loans may provide in the applicable prospectus supplement. The CHL debt securities issued under the CHL subordinated indenture will be subordinated obligations as described in the applicable prospectus supplement. Countrywide Home Loans will indicate in the applicable prospectus supplement the following terms of and information concerning any CHL subordinated debt securities that Countrywide Home Loans issues (to the extent those terms apply to those CHL subordinated debt securities and have not been otherwise described): (1) the specific title, aggregate principal amount, denomination and form; (2) the date of maturity (or the method by which that date may be determined or extended); (3) any interest rate or rates, whether fixed or floating (or the method by which that rate or those rates will be determined); (4) the date from which interest will accrue (or the method by which that date may be determined or reset), the dates on which that interest will be payable and the record date for any interest payable on the interest payment date and the basis upon which interest will be calculated if other than that of a 360-day year of twelve 30-day months; (5) the place or places where the principal of and any premium and any interest on the CHL subordinated debt securities will be payable, or where those CHL subordinated debt securities may be surrendered for registration of transfer or exchange, if not the corporate trust office of the CHL subordinated trustee for those CHL subordinated debt securities; (6) the portion of the principal amount of CHL subordinated debt securities of the series payable upon certain declarations of acceleration or the method by which that portion shall be determined; (7) the denominations and the currency, currencies, currency units or composite currencies in which the CHL subordinated debt securities will be issuable; (8) the currency, currencies, currency units or composite currencies in which payments on the CHL subordinated debt securities will be made, if not U.S. dollars; (9) additional or different subordination terms of the CHL subordinated debt securities; (10) any redemption, repayment or sinking fund provisions, including the period or periods within which, the currency, currencies, currency units or composite currencies in which and the other terms and conditions upon which Countrywide Home Loans may redeem the CHL subordinated debt securities; (11) the ability of a holder of a CHL subordinated debt security to renew all or any portion of a CHL subordinated debt security; (12) whether the CHL subordinated debt securities are convertible into or exchangeable for other securities of Countrywide Home Loans and the terms of the security into which they are convertible or exchangeable, the conversion price or exchange ratio, other terms related to conversion and exchange and any anti-dilution protections; (13) whether the CHL subordinated debt securities will be sold as part of units consisting of CHL subordinated debt securities and securities that Countrywide Credit Industries may offer under this prospectus; (14) if the amount of payments of principal of or any premium or interest on any CHL subordinated debt securities of the series may be determined by reference to an index, formula or other method, the index, formula or other method by which those amounts will be determined; (15) whether and by what method the CHL subordinated debt securities of the series (or certain covenants under the related CHL subordinated indenture) may be defeased and discharged by Countrywide Home Loans; (16) whether the CHL subordinated debt securities of the series shall be issued in whole or in part as book-entry securities; (17) any applicable material federal income tax consequences; and (18) any other material specific terms of the CHL subordinated debt securities, including any material additional events of default or covenants provided for and any material terms that may be required by or advisable under applicable laws or regulations. Unless Countrywide Home Loans otherwise indicates in the applicable prospectus supplement, Countrywide Home Loans will issue CHL subordinated debt securities only in fully registered form without coupons. The CHL subordinated debt securities denominated in U.S. dollars will be issued in denominations of $1,000 or integral multiples of $1,000 unless Countrywide Home Loans otherwise provides in the applicable prospectus supplement. The prospectus supplement relating to a series of CHL subordinated debt securities denominated in a foreign currency or currency unit will specify the denominations in which those CHL subordinated debt securities may be issued. The CHL subordinated indenture does not contain any provisions that would limit Countrywide Home Loans' ability or the ability of any of its affiliates to incur indebtedness (secured or unsecured) or that would afford holders of the CHL subordinated debt securities protection in the event of a highly leveraged transaction, restructuring, change in control, merger or similar transaction involving Countrywide Home Loans that may adversely affect holders of the CHL subordinated debt securities. Unless Countrywide Home Loans otherwise indicates in the applicable prospectus supplement, the principal of, and any premium or interest on, any series of CHL subordinated debt securities will be payable, and those CHL subordinated debt securities will be exchangeable and transfers of them will be registerable, at the corporate trust office of the CHL subordinated trustee, initially at 101 Barclay Street, New York, New York 10286. However, Countrywide Home Loans may elect to make interest payments by check mailed to the address of the person entitled to them as that address appears in the security register for those CHL subordinated debt securities. None of the CHL subordinated debt securities will be entitled to any benefit under the CHL subordinated indenture or be valid or obligatory for any purpose unless there appears on the CHL subordinated debt security a certificate of authentication substantially in the form provided in that CHL subordinated indenture that is duly executed by the trustee, and that certificate will be conclusive evidence and the only evidence that the CHL subordinated debt security has been duly authenticated and delivered under and is entitled to the benefits of the CHL subordinated indenture. Subordination of Subordinated Debt Securities Countrywide Home Loans' obligations under the CHL subordinated debt securities will be subordinate in right of payment to all present and future senior indebtedness of Countrywide Home Loans to the extent provided in the CHL subordinated indenture. Upon any payment or distribution of assets to creditors upon any liquidation, dissolution, winding up, reorganization, assignment for the benefit of creditors, marshaling of assets or any bankruptcy, insolvency, debt restructuring or similar proceedings in connection with the insolvency or bankruptcy of Countrywide Home Loans, the holders of senior indebtedness of Countrywide Home Loans will first be entitled to receive payment in full of senior indebtedness before the holders of the CHL subordinated debt securities will be entitled to receive or retain any payment. No payments on account of principal of or any premium or interest on the CHL subordinated debt securities (including payments on exercise of CHL subordinated debt security put options) may be made if a default in any payment on senior indebtedness has occurred and is continuing, or an event of default on any senior indebtedness resulting in the acceleration of its maturity has occurred, or if any judicial proceeding is pending with respect to any such default. In the event the maturity of the CHL subordinated debt securities is accelerated, the holders of all senior indebtedness of Countrywide Home Loans outstanding at the time of the acceleration will first be entitled to receive payment in full of all amounts due in respect of that senior indebtedness before the holders of the CHL subordinated debt securities will be entitled to receive or retain any payment related to the CHL subordinated debt securities. Amounts that would be due and payable by Countrywide Home Loans to holders of units in the absence of the foregoing subordination provisions, however, may be applied by those holders to offset their obligations under their respective purchase contracts. Any subordinated CHL subordinated debt securities will be subordinate and junior in right of payment, to the extent and in the manner described in the CHL subordinated indenture, to all "senior indebtedness" of Countrywide Home Loans. Unless Countrywide Home Loans otherwise indicates in the prospectus supplement, "senior indebtedness" means: (1) the principal, premium, if any, and interest in respect of indebtedness for money borrowed and indebtedness evidenced by securities, debentures, bonds or other similar instruments; (2) all capital lease obligations; (3) all obligations issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations under any title retention agreement, excluding trade accounts payable arising in the ordinary course of business; (4) all obligations for the reimbursement on any letter of credit, any banker's acceptance, any security purchase facility, any repurchase agreement or similar arrangement, any interest rate swap, any other hedging arrangement, any obligation under options or any similar credit or other transaction; (5) all obligations of the type referred to in clauses (1) through (4) above of others, the payment of which Countrywide Home Loans is responsible or liable as obligor, guarantor or otherwise; and (6) all obligations of the type referred to in clauses (1) through (5) above of others secured by any lien on any of the properties or assets of Countrywide Home Loans, whether or not the obligation is assumed by Countrywide Home Loans, except for: (a) any indebtedness that states, or is issued under a deed, indenture or other instrument that states, that it is subordinate to or ranks equally with the CHL subordinated debt securities; (b) any indebtedness between or among Countrywide Home Loans and any of its affiliates; (c) the indebtedness represented by the 8% Junior Subordinated Deferrable Interest Debentures due December 15, 2026 of Countrywide Home Loans; and (d) the indebtedness represented by the 8.05% Junior Subordinated Debentures due June 15, 2027 of Countrywide Home Loans. Redemption If and to the extent Countrywide Home Loans provides in the applicable prospectus supplement, Countrywide Home Loans will have the right to redeem the CHL subordinated debt securities, in whole or from time to time in part, after the date and at the redemption prices set forth in the applicable prospectus supplement. Events of Default The CHL subordinated indenture defines an event of default for the CHL subordinated debt securities of any series as: (1) failure to pay principal (or premium) on any CHL subordinated debt security of that series at maturity; (2) failure to pay interest on any CHL subordinated debt security of that series within 30 days of the date when due; (3) failure to deposit any sinking fund payment when due for that series within 30 days of the date when due; (4) failure to perform for 90 days after notice any of the other covenants in the CHL subordinated indenture; (5) certain events of bankruptcy, insolvency or reorganization; (6) failure to pay the put price when due upon exercise of a CHL subordinated debt security put option; (7) default resulting in the acceleration of maturity of any other indebtedness for money borrowed by Countrywide Home Loans or by any direct or indirect subsidiary of Countrywide Home Loans in an amount exceeding $10,000,000 and that acceleration not being rescinded or annulled for a period of 10 days after written notice of the default by the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding CHL subordinated debt securities of that series; and (8) any other event of default provided for CHL subordinated debt securities of that series. The CHL subordinated indenture provides that if any event of default affecting outstanding CHL subordinated debt securities of any series occurs and is continuing, either the CHL subordinated trustee or the holders of at least 25% in principal amount of the outstanding CHL subordinated debt securities of that series may declare the principal amount (or, if the CHL subordinated debt securities of that series are original issue discount securities or indexed securities, the portion of the principal amount of those CHL subordinated debt securities as specified by their terms) of all CHL subordinated debt securities of that series to be due and payable immediately. However, under certain circumstances the holders of a majority in principal amount of the outstanding CHL subordinated debt securities of that series on behalf of the holders of all CHL subordinated debt securities of that series may annul a declaration and waive past defaults (except, unless previously cured, a default in payment of principal of or any premium or any interest on the CHL subordinated debt securities of that series and other specified defaults). Countrywide Home Loans refers you to the prospectus supplement relating to each series of CHL subordinated debt securities that are original issue discount securities for the particular provisions regarding acceleration of the maturity of a portion of the principal amount of those original issue discount securities if an event of default occurs and continues. The agreements governing the outstanding indebtedness of Countrywide Home Loans contain provisions that would characterize some events of default under the CHL subordinated indenture as "events of default" under those agreements that could in turn result in, among other things, an acceleration of indebtedness under those agreements. The CHL subordinated indenture contains a provision entitling the CHL subordinated trustee, subject to its duty to act with the required standard of care during a default under any series of CHL subordinated debt securities, to be indemnified by the holders of CHL subordinated debt securities of that series before exercising any right or power under the CHL subordinated indenture at the request of the holders of the CHL subordinated debt securities of that series. The CHL subordinated indenture provides that no holder of CHL subordinated debt securities of any series may institute proceedings, judicial or otherwise, to enforce the CHL subordinated indenture except if the CHL subordinated trustee fails to act for 60 days after it receives a written request to enforce the CHL subordinated indenture by the holders of at least 25% in aggregate principal amount of the then outstanding CHL subordinated debt securities of that series and an offer of reasonable indemnity. This provision will not prevent any holder of CHL subordinated debt securities from enforcing payment of the principal of and any premium and interest on those CHL subordinated debt securities when due. The holders of a majority in aggregate principal amount of the CHL subordinated debt securities of any series outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on it with respect to those CHL subordinated debt securities. However, the CHL subordinated trustee may refuse to follow any direction that it determines would be illegal or would conflict with the CHL subordinated indenture or involve it in personal liability or which would unjustly prejudice holders of the CHL subordinated debt securities of that series not joining the proceeding. The CHL subordinated indenture provides that the trustee will, within 90 days after a default occurs that affects the outstanding CHL subordinated debt securities of any series, give to the holders of those CHL subordinated debt securities notice of that default, unless that default has been cured or waived. Except in the case of a default in the payment of principal of, or any premium or interest on, any CHL subordinated debt securities or payment of any sinking fund installment, the CHL subordinated trustee will be protected in withholding of that notice if it determines in good faith that the withholding of that notice is in the interest of the holders of the CHL subordinated debt securities of that series. Countrywide Home Loans will be required to file with the CHL subordinated trustee annually an officers' certificate as to the absence of certain defaults under the terms of the CHL subordinated indenture. Defeasance of Debt Securities or Some Covenants Defeasance and Discharge. Unless Countrywide Home Loans otherwise indicates in the applicable prospectus supplement, the CHL subordinated debt securities of any series will provide that Countrywide Home Loans will be discharged from all obligations under the CHL subordinated debt securities of that series (except for obligations to register the transfer or exchange of CHL subordinated debt securities of that series, to replace stolen, lost or mutilated CHL subordinated debt securities of that series, to maintain paying agencies and to hold moneys for payment in trust) once Countrywide Home Loans deposits with the CHL subordinated trustee, in trust, money and/or U.S. government obligations, which through the payment of interest and principal, will provide a sufficient amount of money to pay and discharge the principal of (and any premium) and any interest on, and any mandatory sinking fund payments that apply to, the CHL subordinated debt securities of that series on the stated maturity of those payments. This discharge may occur only if, among other things, Countrywide Home Loans delivers to the CHL subordinated trustee an opinion of counsel stating that Countrywide Home Loans has received from, or there has been published by, the IRS a ruling, or there has been a change in tax law, that would cause the discharge not to be deemed, or result in, a taxable event for the holders of the CHL subordinated debt securities of that series. Defeasance of Some Covenants. Unless Countrywide Home Loans otherwise provides in the applicable prospectus supplement, the CHL subordinated debt securities of any series will permit Countrywide Home Loans not to comply with some restrictive covenants, including those relating to consolidation and merger in the CHL subordinated indenture, if Countrywide Home Loans satisfies certain conditions. Countrywide Home Loans will be able to defease those covenants if, among other things: (1) Countrywide Home Loans deposits with the CHL subordinated trustee money and/or U.S. government obligations, which, through the payment of interest and principal, will provide a sufficient amount of money to pay the principal of (and any premium) and any interest on, and any mandatory sinking fund payments applicable to, the CHL subordinated debt securities of that series on the stated maturity of those payments; and (2) Countrywide Home Loans delivers to the CHL subordinated trustee an opinion of counsel stating that the deposit and related covenant defeasance will not cause the holders of the CHL subordinated debt securities of that series to recognize income, gain or loss for federal income tax purposes. If Countrywide Home Loans elects to defease the covenants of a series of CHL subordinated debt securities and those CHL subordinated debt securities are declared due and payable because an event of default has occurred, the amount of money and/or U.S. government obligations on deposit with the CHL subordinated trustee will be sufficient to pay amounts due on those CHL subordinated debt securities at their stated maturity but may not be sufficient to pay amounts due on those CHL subordinated debt securities at the time of the acceleration. However, Countrywide Home Loans will remain liable for those payments. Countrywide Home Loans will state in the prospectus supplement for any particular series of CHL subordinated debt securities if any defeasance provisions will apply to those CHL subordinated debt securities. Modification of the Indenture and Waiver of Covenants The CHL subordinated indenture permits Countrywide Home Loans and the CHL subordinated trustee, with the consent of the holders of at least a majority in principal amount of outstanding CHL subordinated debt securities of each series affected, to execute supplemental indentures adding provisions to or changing or eliminating provisions of the CHL subordinated indenture or modifying the rights of the holders of outstanding CHL subordinated debt securities of that series, except that no supplemental CHL subordinated indenture may, without the consent of the holder of each outstanding CHL subordinated debt security affected: (1) change the stated maturity, or reduce the principal amount, any premium on or the rate of payment of any interest on, of any CHL subordinated debt security of any series; (2) reduce the percentage of outstanding CHL subordinated debt securities of any series, the consent of the holders of which is required for any supplemental indenture or for waiver of compliance with certain provisions of the CHL subordinated indenture or certain defaults thereunder; or (3) effect various other changes. The CHL subordinated indenture also allows Countrywide Home Loans not to comply with certain covenants in the CHL subordinated indenture upon waiver by the holders of a majority in principal amount of outstanding CHL subordinated debt securities of the series affected. Consolidation, Merger and Sale of Assets The CHL subordinated indenture allows Countrywide Home Loans, without the consent of the holders of any of the outstanding CHL subordinated debt securities, to consolidate with or merge into any other corporation or transfer or lease Countrywide Home Loans' assets substantially as an entirety to any person if: (1) the successor is a corporation organized under the laws of any domestic jurisdiction; (2) the successor corporation assumes Countrywide Home Loans' obligations on the CHL subordinated debt securities and under the CHL subordinated indenture; (3) after giving effect to the transaction no event of default, and no event that, after notice or lapse of time, would become an event of default, shall have happened and be continuing; and (4) certain other conditions are met. Guarantees The Guarantor will unconditionally guarantee (the "subordinated guarantees") the payment of principal of and any premium and interest on the CHL subordinated debt securities when due and payable, whether at their stated maturity or upon redemption, repayment or otherwise. The subordinated guarantees will be subordinated in right of payment to all present and future senior indebtedness of the Guarantor on terms comparable to the subordination of the CHL subordinated debt securities. The obligations of the Guarantor under the subordinated guarantees will be unconditional regardless of the enforceability of the CHL subordinated debt securities or the CHL subordinated indenture and will not be discharged until all obligations under those CHL subordinated debt securities and the CHL subordinated indenture are satisfied. Holders of the CHL subordinated debt securities may proceed directly against the Guarantor if an event of default affecting those CHL subordinated debt securities occurs without first proceeding against Countrywide Home Loans. Because the Guarantor is a holding company, the rights of its creditors (including the holders of the CHL subordinated debt securities if the subordinated guarantees are enforced) to share in the distribution of the assets of any subsidiary upon that subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors, except to the extent the Guarantor may itself be a creditor with recognized claims against the subsidiary. Global Securities Countrywide Home Loans may issue CHL subordinated debt securities of any series in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the prospectus supplement relating to that series. Global securities may be issued in either registered or bearer form and in either temporary or permanent form. Unless and until it is exchanged in whole or in part for individual certificates evidencing CHL subordinated debt securities in definitive form, a global security may not be transferred except as a whole by the depositary for that global security to a nominee of that depositary or by a nominee of that depositary to that depositary or another nominee of that depositary or by that depositary or that nominee to a successor of that depositary or a nominee of that successor. Countrywide Home Loans will describe the specific terms of the depositary arrangement for a series of CHL subordinated debt securities in the prospectus supplement relating to that series. Concerning the Trustee The Bank of New York is the trustee under each of the CHL senior indenture and the CHL subordinated indenture. Countrywide Home Loans maintains banking relationships in the ordinary course of business with the CHL trustee. Among other things, The Bank of New York is a lending bank under an existing revolving credit facility of Countrywide Home Loans. Governing Law Unless Countrywide Home Loans otherwise specifies in the applicable prospectus supplement, the CHL subordinated indenture and the CHL subordinated debt securities will be governed by New York law. PLAN OF DISTRIBUTION We or Countrywide Home Loans may sell securities issuable under this prospectus to or through one or more underwriters or dealers and also may sell those securities directly to institutional investors or other purchasers, or through agents. We or Countrywide Home Loans may distribute the securities periodically in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to those prevailing market prices or at negotiated prices. In connection with the sale of any securities under this prospectus, underwriters or agents may receive compensation from us or Countrywide Home Loans or from purchasers of securities for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities may be deemed to be underwriters, and any discounts or commissions received by them from us or Countrywide Home Loans and any profit on the resale of those securities by them may be deemed to be underwriting discounts and commissions under the Securities Act. Any of those underwriters or agents will be identified, and any compensation received from us or Countrywide Home Loans will be described, in the related prospectus supplement. Under agreements that we and/or Countrywide Home Loans may enter into, underwriters and agents who participate in the distribution of securities issuable under this prospectus may be entitled to indemnification by us and/or Countrywide Home Loans against certain liabilities, including liabilities under the Securities Act. If we or Countrywide Home Loans so indicate in the related prospectus supplement, we or Countrywide Home Loans will authorize underwriters or other persons acting as our or Countrywide Home Loans' agents to solicit offers by some institutions to purchase securities from us or Countrywide Home Loans under contracts providing for payment and delivery on a future date. Institutions with whom we or Countrywide Home Loans would enter into those contracts include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases those institutions must be approved by us or Countrywide Home Loans. The obligations of any purchaser under a contract will be subject to the condition that the purchase of the securities will not at the time of delivery be prohibited under the laws of the jurisdiction to which that purchaser is subject. The underwriters and those other agents will not have any responsibility as to the validity or performance of those contracts. If underwriters or dealers are used in the sale, until the distribution of the securities is completed, rules of the SEC may limit the ability of underwriters and some selling group members to bid for and purchase the securities. As an exception to these rules, underwriters may engage in some transactions that stabilize the price of the securities. Those transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the securities. If any underwriters create a short position in the securities in connection with any offering, that is, if they sell more securities than are set forth on the cover page of any prospectus supplement accompanying this prospectus, the underwriters may reduce that short position by purchasing securities in the open market. Underwriters may also impose a penalty bid on some selling group members. This means that if the underwriters purchase securities in the open market to reduce the underwriters' short position or to stabilize the price of the securities, they may reclaim the amount of the selling concession from the selling group members that sold those securities as part of that offering. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases. The imposition of a penalty bid may also affect the price of the securities to the extent that it discourages resales of the securities. Some of the underwriters or agents and their associates may engage in transactions with and perform services for us, Countrywide Home Loans or our or Countrywide Home Loans' affiliates in the ordinary course of business. The securities may or may not be listed on a national securities exchange (other than our common stock, which is listed on the New York Stock Exchange and the Pacific Stock Exchange). Any shares of our common stock sold under a prospectus supplement will be listed on the New York Stock Exchange and the Pacific Stock Exchange, subject to official notice of issuance. Neither we nor Countrywide Home Loans can assure you that there will be an active trading market for any of the securities sold under this prospectus. We or Countrywide Home Loans may designate Countrywide Securities Corporation to be an underwriter, agent or dealer of one or more series of the securities issuable under this prospectus. The distribution of securities of any series will conform to the requirements set forth in the applicable sections of Rule 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc. VALIDITY OF SECURITIES The validity of the securities issuable under this prospectus will be passed upon for us and Countrywide Home Loans by Munger, Tolles & Olson LLP, Los Angeles, California. Brown & Wood LLP, New York, New York will serve as counsel for any underwriters and agents. Brown & Wood LLP also serves as counsel for CWMBS, Inc. and CWABS, Inc., each one of our wholly owned subsidiaries, in connection with offerings of mortgage-backed and asset-backed securities, and from time to time also serves as our counsel on other matters. EXPERTS Our consolidated financial statements incorporated by reference in the registration statement, of which this prospectus forms a part, have been audited by Grant Thornton LLP, independent certified public accountants, for the periods and to the extent indicated in their report thereon, and have been so incorporated in reliance upon the authority of said firm as experts in accounting and auditing. II-11 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS Item 14. Other Expenses of Issuance and Distribution* SEC registration fee $ 1,500,000 NASD fee 30,500 Blue sky fees and expenses 15,000 Legal fees and expenses 60,000 Accounting fees and expenses 120,000 Printing and engraving expenses 60,000 Trustees' fees and expenses 20,000 Rating agency fees 1,800,000 Miscellaneous 10,500 ---------------- Total $3,616,000 ================ - -----------------
*Except for the SEC registration fee and the NASD fee, all of the foregoing expenses have been estimated. Item 15. Indemnification of Directors and Officers Section 145 of the Delaware General Corporation Law provides, in substance, that Delaware corporations shall have the power, under specified circumstances, to indemnify their directors, officers, employees and agents in connection with actions, suits or proceedings brought against them by a third party or in the right of the corporation, by reason of the fact that they were or are such directors, officers, employees or agents, against expenses incurred in any such action, suit or proceeding. The Delaware General Corporation Law also provides that Delaware corporations may purchase insurance on behalf of any such director, officer, employee or agent. Sections 722, 723, 725 and 726 of the New York Business Corporation Law are substantively equivalent to Section 145 of the Delaware General Corporation Law. Article SIXTH of the Certificate of Incorporation of Countrywide Credit Industries provides that Countrywide Credit Industries may indemnify its directors and officers to the full extent permitted by the laws of the State of Delaware. Article VIII of Countrywide Credit Industries' Bylaws provides that Countrywide Credit Industries shall indemnify its directors and officers, and persons serving as directors and officers of Countrywide Home Loans at the request of Countrywide Credit Industries, against any threatened, pending or completed action, suit or proceeding or investigation brought against such directors and officers by reason of the fact that such persons were such directors or officers, provided that such persons acted in good faith and in a manner that they reasonably believed to be in or not opposed to the best interests of Countrywide Credit Industries; except that in the case of actions brought by or in the right of Countrywide Credit Industries to procure a judgment in its favor, no indemnification is permitted in respect to any claim, issue or matter as to which any such director or officer shall have been adjudged to be liable to Countrywide Credit Industries unless the court in which the action was brought determines that such person is entitled to indemnification. Countrywide Credit Industries' Bylaws further contemplate that the indemnification provisions permitted thereunder are not exclusive of any other rights to which such directors and officers are otherwise entitled by means of Bylaw provisions, agreements, vote of stockholders or disinterested directors or otherwise. Countrywide Credit Industries has entered into indemnity agreements with certain of its directors and executive officers (including the directors and executive officers of Countrywide Home Loans), whereby such individuals are indemnified by Countrywide Credit Industries up to an aggregate limit of $5,000,000 for any claims made against such individual based on any act, omission or breach of duty committed while acting as a director or officer, except, among other things, cases involving dishonesty or improper personal benefit. Countrywide Credit Industries also maintains an insurance policy pursuant to which its directors and officers (including the directors and executive officers of Countrywide Home Loans) are insured against certain liabilities that might arise out of their relationship with Countrywide Credit Industries as directors and officers. Article SEVENTH of the Certificate of Incorporation provides that a director of Countrywide Credit Industries shall have no personal liability to Countrywide Credit Industries or its stockholders for monetary damages for breach of his fiduciary duty of care as a director to the full extent permitted by the Delaware General Corporation Law, as it may be amended from time to time. Item 16. Exhibits 1.1* Form of Underwriting Agreement (for equity securities of Countrywide Credit Industries) 1.2* Form of Underwriting Agreement (for stock purchase contracts) 1.3 Form of Selling Agency Agreement (for debt securities of Countrywide Home Loans) 4.1 Specimen Certificate of Countrywide Credit Industries' Common Stock (incorporated by reference to Exhibit 4.2 to Countrywide Credit Industries' Current Report on Form 8-K dated February 6, 1987) 4.2 Certificate of Amendment of Restated Certificate of Incorporation of Countrywide Credit Industries (incorporated by reference to Exhibit 4.1 to Countrywide Credit Industries' Quarterly Report on Form 10-Q dated August 31, 1987) 4.3 Restated Certificate of Incorporation of Countrywide Credit Industries (incorporated by reference to Exhibit 4.2 to Countrywide Credit Industries' Quarterly Report on Form 10-Q dated August 31, 1987) 4.4 Bylaws of Countrywide Credit Industries, as amended and restated (incorporated by reference to Countrywide Credit Industries' Current Report on Form 8-K dated February 10, 1988) 4.4.1 Amendment to Bylaws of Countrywide Credit Industries, Inc. dated January 28,1998 (incorporated by reference to Exhibit 3.3.1 to Countrywide Credit Industries'Annual Report on Form 10-K dated February 28, 1998). 4.4.2 Amendment to Bylaws of Countrywide Credit Industries, Inc. dated February 3, 1998 (incorporated by reference to Exhibit 3.3.1 to Countrywide Credit Industries' Annual Report on Form 10-K dated February 28, 1998). 4.4.3 Amendment to Bylaws of Countrywide Credit Industries, Inc. dated March 24, 2000 (incorporated by reference to Exhibit 3.3.3 to Countrywide Credit Industries' Annual Report on Form 10-K dated February 29, 2000). 4.4.4 Amendment to Bylaws of Countrywide Credit Industries, Inc. dated September 28, 2000 (incorporated by reference to Exhibit 3.3.4 to Countrywide Credit Industries'Quarterly Report on Form 10-Q dated August 31, 2000). 4.5 Rights Agreement, dated as of February 10, 1988, between Countrywide Credit Industries and Bank of America NT & SA, as Rights Agent (incorporated by reference to Exhibit 4 to Countrywide Credit Industries' Form 8-A filed on February 12, 1988) 4.6 Amendment No. 1 to Rights Agreement, dated as of March 24, 1992, between countrywide Credit Industries and Bank of America NT & SA, as Rights Agent (incorporated by reference to Exhibit 1 to Countrywide Credit Industries' Form 8 filed on March 27, 1992) 4.7 Indenture, dated as of January 1, 1992, among Countrywide Home Loans, countrywide Credit Industries and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 of Countrywide Home Loans and Countrywide Credit Industries (File Nos. 33-50661 and 33-50661-01)filed on October 19, 1993)) 4.8 Supplemental Indenture No. 1, dated as of June 15, 1995, to the Indenture dated as of January 1, 1992, among Countrywide Home Loans, Countrywide Credit Industries and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.9 to the Registration Statement on Form S-3 of Countrywide Home Loans and Countrywide Credit Industries (File Nos. 33-59559 and 33-59559-01)) 4.9 Form of Indenture among Countrywide Home Loans, Countrywide Credit Industries and The Bank of New York, as trustee, providing for the issuance of subordinated debt securities (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-3 of Countrywide Home Loans, Countrywide Credit Industries, Countrywide Capital I and Countrywide Capital II (File Nos. 333-14111, 333-14111-01, 333-14111-02 and 333-14111-03). 4.11* Form of Master Unit Agreement, between Countrywide Credit Industries and The Bank of New York, as agent. 4.12* Form of Purchase Contract between Countrywide Credit Industries and purchase contract agent 4.13* Form of Pledge Agreement, among Countrywide Credit Industries, collateral agent, and purchase contract agent 4.14 Form of Fixed Rate Medium-Term Note 4.15 Form of Floating Rate Medium-Term Note 5.1 Opinion of Munger, Tolles & Olson LLP, counsel to Countrywide Credit Industries and Countrywide Home Loans, as to the validity of the securities being offered 8.1 Opinion of Munger, Tolles & Olson LLP, counsel to Countrywide Credit Industries and Countrywide Home Loans, as to certain tax matters 12.1 Statement regarding computation of ratio of earnings to fixed charges (incorporated by reference to Exhibit 12.1 to Countrywide Credit Industries' Annual Report on Form 10-K for the year ended February 29, 2000) 23.1 Consent of Grant Thornton LLP 23.2 Consent of Munger, Tolles & Olson LLP (included in Exhibit 5.1) 23.3 Consent of Munger, Tolles & Olson LLP (included in Exhibit 8.1) 24 Powers of Attorney for Countrywide Credit Industries and Countrywide Home Loans relating to subsequent amendments (included on pages II-6, II-7 and II-8) 25.1 Form T-1 Statement of Eligibility Under Trust Indenture Act of 1939 of The Bank of New York relating to senior debt securities of Countrywide Home Loans (separately bound) 25.2 Form T-1 Statement of Eligibility Under Trust Indenture Act of 1939 of The Bank of New York relating to subordinated debt securities of Countrywide Home Loans (included in Exhibit 25.1) - -------------- * To be filed as an exhibit to a Current Report on Form 8-K of Countrywide Credit Industries at such time as an underwritten issuance of such securities is contemplated. Item 17. Undertakings (a) The undersigned Countrywide Credit Industries and Countrywide Home Loans (the "Registrants") hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement. Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the Registration Statement is on Form S-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. (b) Each of the undersigned Registrants hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of Countrywide Credit Industries' annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (d) The undersigned Registrants hereby undertake that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (e) The undersigned Registrants hereby undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Countrywide Credit Industries, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Calabasas, State of California, on the 13th day of February, 2001. COUNTRYWIDE CREDIT INDUSTRIES, INC. By: /S/ ANGELO R. MOZILO --------------------------- Angelo R. Mozilo Chairman of the Board of Directors and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Angelo R. Mozilo, Stanford L. Kurland and Carlos M. Garcia, and each of them, his true and lawful attorneys-in-fact and agents, with full powers of substitution and resubstitution, for and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and any registration statement related to the offering contemplated by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as might or could be done in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date - -------- ----- ---- /S/ ANGELO R. MOZILO Chairman of the Board of February 13, 2001 - ------------------------- Angelo R. Mozilo Directors, Chief Executive Officer and President (Principal Executive Officer); Director /S/ CARLOS M. GARCIA Senior Managing Director and February 13, 2001 - ------------------------- Carlos M. Garcia Chief Financial Officer (Principal Financial and Accounting Officer) /S/ JEFFREY M. CUNNINGHAM Director February 13, 2001 - ------------------------- Jeffrey M. Cunningham /S/ ROBERT J. DONATO Director February 13, 2001 - ------------------------- Robert J. Donato /S/ MICHAEL E. DOUGHERTY Director February 13, 2001 - ------------------------- Michael E. Dougherty /S/ BEN M. ENIS Director February 13, 2001 - ------------------------- Ben M. Enis /S/ EDWIN HELLER Director February 13, 2001 - ------------------------- Edwin Heller /S/ STANFORD L KURLAND Executive Managing Director February 13, 2001 - ------------------------- Stanford L. Kurland and Chief Operating Officer; Director /S/ OSCAR P. ROBERTSON Director February 13, 2001 - ------------------------- Oscar P. Robertson /S/ HARLEY W. SNYDER Director February 13, 2001 - ------------------------- Harley W. Snyder SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Countrywide Home Loans, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Calabasas, State of California, on the 13th day of February, 2001. COUNTRYWIDE HOME LOANS, INC. By: /S/ ANGELO R. MOZILO -------------------------------- Angelo R. Mozilo Chairman of the Board of Directors POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Angelo R. Mozilo, Stanford L. Kurland and Carlos M. Garcia, and each of them, his true and lawful attorneys-in-fact and agents, with full powers of substitution and resubstitution, for and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and any registration statement related to the offering contemplated by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as might or could be done in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date - --------- ----- ---- /S/ ANGELO R. MOZILO Chairman of the Board of February 13, 2001 - ------------------------ Angelo R. Mozilo Directors; Director /S/ STANFORD L. KURLAND Chief Executive Officer and February 13, 2001 - ------------------------ Stanford L. Kurland President (Principal Executive Officer); Director /S/ THOMAS K. MCLAUGHLIN Managing Director and Chief February 13, 2001 - ------------------------ Thomas K. McLaughlin Financial Officer (Principal Financial and Accounting Officer) /S/ CARLOS M. GARCIA Senior Managing Director, February 13, 2001 - ------------------------ Carlos M. Garcia Chief Operating Officer; Director /S/ DAVID SAMBOL Senior Managing Director, Capital February 13, 2001 - ------------------------ David Sambol Markets; Director EXHIBIT INDEX 1.1* Form of Underwriting Agreement (for equity securities of Countrywide Credit Industries) 1.2* Form of Underwriting Agreement (for stock purchase contracts) 1.3 Form of Selling Agency Agreement (for debt securities of Countrywide Home Loans) 4.1 Specimen Certificate of Countrywide Credit Industries' Common Stock (incorporated by reference to Exhibit 4.2 to Countrywide Credit Industries' Current Report on Form 8-K dated February 6, 1987) 4.2 Certificate of Amendment of Restated Certificate of Incorporation of Countrywide Credit Industries (incorporated by reference to Exhibit 4.1 to Countrywide Credit Industries' Quarterly Report on Form 10-Q dated August 31, 1987) 4.3 Restated Certificate of Incorporation of Countrywide Credit Industries (incorporated by reference to Exhibit 4.2 to Countrywide Credit Industries' Quarterly Report on Form 10-Q dated August 31, 1987) 4.4 Bylaws of Countrywide Credit Industries, as amended and restated (incorporated by reference to Countrywide Credit Industries' Current Report on Form 8-K dated February 10, 1988) 4.4.1Amendment to Bylaws of Countrywide Credit Industries, Inc. dated January 28, 1998 (incorporated by reference to Exhibit 3.3.1 to Countrywide Credit Industries' Annual Report on Form 10-K dated February 28, 1998). 4.4.2Amendment to Bylaws of Countrywide Credit Industries, Inc. dated February 3, 1998 (incorporated by reference to Exhibit 3.3.1 to Countrywide Credit Industries'Annual Report on Form 10-K dated February 28, 1998). 4.4.3Amendment to Bylaws of Countrywide Credit Industries, Inc. dated March 24, 2000 (incorporated by reference to Exhibit 3.3.3 to Countrywide Credit Industries' Annual Report on Form 10-K dated February 29, 2000). 4.4.4Amendment to Bylaws of Countrywide Credit Industries, Inc. dated September 28, 2000 (incorporated by reference to Exhibit 3.3.4 to Countrywide Credit Industries' Quarterly Report on Form 10-Q dated August 31, 2000). 4.5 Rights Agreement, dated as of February 10, 1988, between Countrywide Credit Industries and Bank of America NT & SA, as Rights Agent (incorporated by reference to Exhibit 4 to Countrywide Credit Industries' Form 8-A filed on February 12, 1988) 4.6 Amendment No. 1 to Rights Agreement, dated as of March 24, 1992, between Countrywide Credit Industries and Bank of America NT & SA, as Rights Agent (incorporated by reference to Exhibit 1 to Countrywide Credit Industries' Form 8 filed on March 27, 1992) 4.7 Indenture, dated as of January 1, 1992, among Countrywide Home Loans, Countrywide Credit Industries and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 of Countrywide Home Loans and Countrywide Credit Industries (File Nos. 33-50661 and 33-50661-01)filed on October 19, 1993)) 4.8 Supplemental Indenture No. 1, dated as of June 15, 1995, to the Indenture dated as of January 1, 1992, among Countrywide Home Loans, Countrywide Credit Industries and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.9 to the Registration Statement on Form S-3 of Countrywide Home Loans and Countrywide Credit Industries (File Nos. 33-59559 and 33-59559-01)) 4.9 Form of Indenture among Countrywide Home Loans, Countrywide Credit Industries and The Bank of New York, as trustee, providing for the issuance of subordinated debt securities (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-3 of Countrywide Home Loans, Countrywide Credit Industries, Countrywide Capital I and Countrywide Capital II (File Nos. 333-14111, 333-14111-01, 333-14111-02 and 333-14111-03). 4.11*Form of Master Unit Agreement, between Countrywide Credit Industries and The Bank of New York, as agent. 4.12*Form of Purchase Contract between Countrywide Credit Industries and purchase contract agent 4.13*Form of Pledge Agreement, among Countrywide Credit Industries, collateral agent, and purchase contract agent 4.14Form of Fixed Rate Medium-Term Note 4.15 Form of Floating Rate Medium-Term Note 5.1 Opinion of Munger, Tolles & Olson LLP, counsel to Countrywide Credit Industries and Countrywide Home Loans, as to the validity of the securities being offered 8.1 Opinion of Munger, Tolles & Olson LLP, counsel to Countrywide Credit Industries and Countrywide Home Loans, as to certain tax matters 12.1 Statement regarding computation of ratio of earnings to fixed charges (incorporated by reference to Exhibit 12.1 to Countrywide Credit Industries' Annual Report on Form 10-K for the year ended February 29, 2000) 23.1 Consent of Grant Thornton LLP 23.2 Consent of Munger, Tolles & Olson LLP (included in Exhibit 5.1) 23.3 Consent of Munger, Tolles & Olson LLP (included in Exhibit 8.1) 24 Powers of Attorney for Countrywide Credit Industries and Countrywide Home Loans relating to subsequent amendments (included on pages II-6, II-7 and II-8) 25.1 Form T-1 Statement of Eligibility Under Trust Indenture Act of 1939 of The Bank of New York relating to senior debt securities of Countrywide Home Loans (separately bound) 25.2 Form T-1 Statement of Eligibility Under Trust Indenture Act of 1939 of The Bank of New York relating to subordinated debt securities of Countrywide Home Loans (included in Exhibit 25.1) - -------------- * To be filed as an exhibit to a Current Report on Form 8-K of Countrywide Credit Industries at such time as an underwritten issuance of such securities is contemplated. EX-1.3 2 0002.txt FORM OF SELLING AGENCY AGREEMENT 1 EXHIBIT 1.3 FORM OF SELLING AGENCY AGREEMENT Countrywide Home Loans, Inc. U.S. $6,000,000,000 Medium-Term Notes, Series J Due Nine Months or More From Date of Issue Payment of Principal, Premium, if any, and Interest Fully and Unconditionally Guaranteed by Countrywide Credit Industries, Inc. SELLING AGENCY AGREEMENT February [ ], 2001 Lehman Brothers Inc. Merrill Lynch, Pierce, Fenner & Smith 3 World Financial Center Incorporated New York, New York 10285 4 World Financial Center New York, New York 10080 Banc of America Securities LLC Morgan Stanley & Co. Incorporated 100 North Tryon Street 1585 Broadway NC1-007-07-01 New York, New York 10036 Charlotte, North Carolina 28255 Chase Securities Inc. Salomon Smith Barney Inc. 270 Park Avenue Seven World Trade Center New York, New York 10017 New York, New York 10048 Deutsche Bank Alex. Brown Inc. Countrywide Securities Corporation 31 W. 52nd Street 4500 Park Granada New York, New York 10019 Calabasas, California 91302 Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Ladies and Gentlemen: Countrywide Home Loans, Inc., a New York corporation (the "Company"), confirms its agreement with each of you (collectively, the "Agents") with respect to the issue and sale by the Company of up to U.S. $6,000,000,000 aggregate initial offering price of its Medium-Term Notes, Series J, Due Nine Months or More from Date of Issue (the "Notes"). The Notes will be fully and unconditionally guaranteed as to payment of principal, premium, if any, and interest (the "Guarantees") by Countrywide Credit Industries, Inc. (the "Guarantor"). The Notes and the Guarantees will be issued under an indenture, dated as of January 1, 1992, as supplemented by Supplemental Indenture No. 1 thereto, dated as of June 15, 1995 (collectively, the "Indenture"), among the Company, the Guarantor and The Bank of New York, as trustee (the "Trustee"). Unless otherwise specified in the Pricing Supplement referred to below, the Notes will be issued in minimum denominations of U.S. $1,000 and in denominations exceeding such amount by integral multiples of U.S. $1,000, and if denominated in a currency or currency unit other than U.S. dollars, the equivalent in such other currency or currency unit (the "Specified Currency") as determined in accordance with the Indenture, of U.S. $1,000 (rounded down to an integral multiple of 1,000 units of such Specified Currency) and any larger amount that is an integral multiple of 1,000 units of such Specified Currency, will be issued only in fully registered certificated or book-entry form, and will be issued in the currency or currency units and will have the maturities, annual interest rates (whether fixed or floating), redemption provisions and other terms set forth in a pricing supplement (the "Pricing Supplement") to the Prospectus referred to below. The Notes will be issued, and the terms thereof established, in accordance with the Indenture and the Medium-Term Note Administrative Procedures attached hereto as Exhibit A (the "Procedures"). The Procedures may only be amended by written agreement of the Company and each Agent after notice to, and in the case of amendments which affect the rights, duties or obligations of the Trustee, with the approval of, the Trustee. 1. Representations and Warranties. The Company and the Guarantor, jointly and severally, ------------------------------ represent and warrant to, and agree with, each Agent that: (a) The Company and the Guarantor meet the requirements for use of Form S-3 under the Securities Act of 1933, as amended (the "Act") and rules and regulations ("Rules and Regulations") of the Securities and Exchange Commission (the "Commission") promulgated thereunder and have filed with the Commission a registration statement on Form S-3 (File Nos. [X] and [X]) (the "Registration Statement"), and a related preliminary prospectus for the registration under the Act of certain securities, including the Notes and the Guarantees (collectively, the "Securities") and the offering thereof from time to time in accordance with Rule 415 of the Rules and Regulations, which Registration Statement has been declared effective by the Commission and copies of which have heretofore been delivered to you. Such Registration Statement, as it may be amended or supplemented, meets the requirements set forth in Rule 415(a)(1)(x) and (a)(2) of the Rules and Regulations and complies in all other material respects with said Rule. In connection with the sale of Notes, the Company and the Guarantor propose to file with the Commission pursuant to Rule 424 under the Act a supplement to the form of prospectus included in such Registration Statement relating to the Notes and the Guarantees and the plan of distribution thereof and have previously advised the Agents of all further information (financial and other) with respect to the Company and the Guarantor to be set forth therein. Such Registration Statement, in the form in which it was declared effective, as amended through the date hereof, including all documents incorporated or deemed to be incorporated by reference therein, is hereinafter referred to as the "Registration Statement". Such prospectus, as supplemented through the date hereof, is hereinafter called the "Prospectus", except that if any revised prospectus or prospectus supplement shall be provided to the Agents by the Company for use in connection with the offering of the Securities which differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term "Prospectus" shall refer to such revised prospectus or prospectus supplement, as the case may be, from and after the time it is first provided to the Agents for such use. Any reference herein to the Registration Statement 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 Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before the date of this Agreement or the date of the Prospectus, as the case may be; and any reference herein to the terms "amend", "amendment" or "supplement" with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement or the date of the Prospectus, as the case may be, deemed to be incorporated therein by reference. (b) As of the date hereof, when any amendment to the Registration Statement becomes effective (including the filing of any document incorporated by reference in the Registration Statement), when any supplement to the Prospectus is filed with the Commission, as of the date of any Terms Agreement (as defined by Section 2 hereof) and at the date of delivery by the Company of any Notes sold hereunder (a "Settlement Date"), (i) the Registration Statement, as amended as of any such time, and the Prospectus, as supplemented as of any such time, and the Indenture complies, or will comply, as the case may be, in all material respects with the applicable requirements of the Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the Exchange Act and the respective rules and regulations thereunder and (ii) neither the Registration Statement, as amended as of any such time, nor the Prospectus, as supplemented as of any such time, contains, or will contain, as the case may be, 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; provided, however, that the representations or warranties in this subsection shall not apply to (a) that part of the Registration Statement which shall constitute the Statement of Eligibility on Form T-1 under the Trust Indenture Act of the Trustee or (b) the information contained in or omitted from the Registration Statement or the Prospectus or any amendment thereof or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company or the Guarantor by any of you specifically for use in connection with the preparation of the Registration Statement and the Prospectus or any amendment thereof or supplement thereto. (c) Neither the Company nor the Guarantor nor any of their respective subsidiaries is in violation of its corporate charter or bylaws or in default under any agreement, indenture or instrument to which the Company, the Guarantor or any of their respective subsidiaries is a party, the effect of which violation or default would be material to the Company or the Guarantor and its subsidiaries considered as a whole; the execution, delivery and performance of this Agreement and the Indenture and consummation of the transactions contemplated hereunder and thereunder will not conflict with, result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company, the Guarantor or any of their respective subsidiaries pursuant to the terms of, or constitute a default under, any agreement, indenture or instrument, or result in a violation of the charter or by-laws of the Company or the Guarantor or any order, rule or regulation of any court or governmental agency having jurisdiction over the Company, the Guarantor or any of their respective subsidiaries; and except as required by the Act, the Trust Indenture Act, the Exchange Act and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Agreement and the Indenture. (d) Except as described in or contemplated by the Registration Statement and the Prospectus, there has not been any material adverse change in, or any adverse development which materially affects, the business, properties, financial condition or results of operations of the Company or the Guarantor and its subsidiaries considered as a whole since the dates as of which information is given in the Registration Statement and the Prospectus. (e) Grant Thornton LLP, whose reports have been included in the Prospectus and incorporated by reference or included in the Guarantor's most recent Annual Report on Form 10-K, which is incorporated by reference in the Prospectus, are independent public accountants as required by the Act and the Rules and Regulations. (f) (i) The Indenture has been duly authorized, executed and delivered by the Company and the Guarantor and constitutes the legally binding obligation of the Company and the Guarantor, respectively, enforceable in accordance with its terms subject to bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other laws affecting creditors' rights generally and general principles of equity, (ii) on any Settlement Date, the Notes will have been duly authorized and, upon payment therefor as provided in this Agreement, will constitute legally binding obligations of the Company enforceable in accordance with their terms subject to bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other laws affecting creditors' rights generally and general principles of equity and the holders of the Notes will be entitled to the benefits of the Indenture, (iii) on any Settlement Date, the Guarantees will have been duly authorized and, upon delivery of the related Notes, will constitute legally binding obligations of the Guarantor enforceable in accordance with their terms subject to bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other laws affecting creditors' rights generally and general principles of equity and the holders of the Notes upon which the Guarantees are endorsed will be entitled to the benefits of the Indenture, and (iv) the Indenture conforms, and the Notes and related Guarantees will conform, in each case in all material respects, to the descriptions thereof contained in the Prospectus. (g) Each of the Company, the Guarantor and any Significant Subsidiary of the Company or the Guarantor, as defined in Rule 405 of Regulation C of the Rules and Regulations (individually, a "Subsidiary" and collectively, the "Subsidiaries"), has been duly incorporated, is validly existing and in good standing under the laws of the jurisdiction in which it is chartered or organized, is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership of property or the conduct of its business requires such qualification (except where the failure to be so qualified would not have a material adverse effect on the business operations or financial condition of the Company or the Guarantor and its subsidiaries taken as a whole), and has power and authority necessary to own or hold its property and to conduct the business in which it is engaged. (h) All of the outstanding shares of capital stock of each Subsidiary have been duly and validly authorized and issued and are fully paid and nonassessable, and all outstanding shares of capital stock of the Subsidiaries are owned by the Company or the Guarantor, directly or through subsidiaries, free and clear of any perfected security interest, other security interests, claims, liens or encumbrances. (i) Except as described in the Prospectus, there is no material litigation or governmental proceeding pending or, to the knowledge of the Company or the Guarantor, threatened against the Company, the Guarantor or any of their respective subsidiaries which is reasonably likely to result in any material adverse change in the financial condition, results of operations, business or prospects of the Company or the Guarantor and its subsidiaries considered as a whole or which is required to be disclosed in the Registration Statement. (j) The financial statements filed or incorporated as part of the Registration Statement or included or incorporated in the Prospectus present fairly, or (in the case of any amendment or supplement to any such document, or any material incorporated by reference in any such document, filed with the Commission after the date as of which this representation is being made) will present fairly, at all times during the effectiveness of this Agreement, the financial condition and results of operations of the Guarantor, at the dates and for the periods indicated, and have been, and (in the case of any amendment or supplement to any such document, or any material incorporated by reference in any such document, filed with the Commission after the date as of which this representation is being made) will be at all times during the effectiveness of this Agreement, prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as otherwise required pursuant to such generally accepted accounting principles; and the summarized financial information of the Company included or incorporated by reference in the Registration Statement and the Prospectus presents fairly the information required to be stated therein. (k) The documents incorporated by reference into the Prospectus have been, and (in the case of any amendment or supplement to any such document, or any material incorporated by reference in any such document, filed with the Commission after the date as of which this representation is being made) will be at all times during the effectiveness of this Agreement, prepared in all material respects in conformity with the applicable requirements of the Act and the Rules and Regulations and the Exchange Act and the rules and regulations of the Commission thereunder and such documents have been, or (in the case of any amendment or supplement to any such document, or any material incorporated by reference in any such document, filed with the Commission after the date as of which this representation is being made) will be at all times during the effectiveness of this Agreement hereof, timely filed as required thereby. (l) There are no contracts or other documents which are required to be filed as exhibits to the Registration Statement by the Act or by the Rules and Regulations, or which were required to be filed as exhibits to any document incorporated by reference in the Prospectus by the Exchange Act or the rules and regulations of the Commission thereunder, which have not been filed as exhibits to the Registration Statement or to such document or incorporated therein by reference as permitted by the Rules and Regulations or the rules and regulations of the Commission under the Exchange Act as required. (m) The Company, the Guarantor and each subsidiary of the Guarantor have complied, and will comply, with the provisions of Florida H.B. 1771, codified as Section 517.075 of the Florida Statutes, 1987, as amended, and all regulations promulgated thereunder relating to issuers doing business in Cuba. 2. Appointment of Agents; Solicitations by the Agents of Offers to Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and conditions set forth herein, and to the reservation by the Company of the right to sell, solicit, and accept offers to purchase Notes directly on its own behalf, the Company hereby authorizes each Agent to act as its agent to solicit offers for the purchase of all or part of the Notes from the Company. On the basis of the representations and warranties, and subject to the terms and conditions set forth herein, each of the Agents agrees, as agent of the Company, to use its reasonable best efforts to solicit offers to purchase the Notes from the Company upon the terms and conditions set forth herein and in the Prospectus as amended or supplemented and in the Procedures. The Company reserves the right, in its sole discretion, to instruct the Agents or any one or more of the Agents from time to time 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, such Agents 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. Unless otherwise agreed between the Company and such Agent, the Company agrees to pay each Agent a commission in U.S. dollars, at the time of settlement of each sale of Notes by the Company as a result of a solicitation made by such Agent, in an amount equal to that percentage specified in Schedule I hereto (or, with respect to Notes in which the stated maturity is in excess of 30 years, such percentage as shall be agreed upon by the Company and the related Agent at such time) of the aggregate principal amount of the Notes sold by the Company as a result of solicitations by such Agent and 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 each Agent as agent for the Company at such time and in such amounts as such Agent deems advisable; provided, however, that so long as this Agreement shall be in effect, the Company shall not solicit offers to purchase Notes through any agents other than the Agents. Notwithstanding anything to the contrary contained herein, the Company may authorize any other person or entity (an "Additional Agent") to act as its agent to solicit offers for the purchase of all or part of the Notes of the Company and/or accept offers to purchase Notes from any such Additional Agent, provided that any such Additional Agent shall have entered into an agreement with the Company upon the same terms and conditions as set forth in this Agreement. (b) Subject to the terms and conditions stated herein, the Company agrees that, whenever the Company determines to sell Notes directly to any Agent as principal for resale to others, it will enter into a separate agreement relating to such sale in accordance with the provisions of this Section 2(b). For the purposes of this Agreement, the term "Purchaser" shall refer to each of you acting solely as principal hereunder and not as agent. For the purposes of Section 3 and Section 5 of this Agreement, the term "agent" shall refer to each of you acting solely in the capacity as agent for the Company hereunder and not as principal. The term "Agent" or "you" shall refer to each of you acting in both such capacities or in either such capacity. Each sale of Notes to a Purchaser shall be made in accordance with the terms of this Agreement and the Procedures and a supplemental agreement which will provide for the sale of such Notes to, and the purchase and reoffering thereof by, a Purchaser. Each such supplemental agreement (which may be an oral agreement and confirmed in writing between a Purchaser and the Company) is herein referred to as a "Terms Agreement". Each such Terms Agreement, whether oral (and confirmed in writing, which may be by facsimile transmission) or in writing, shall be with respect to such information (as applicable) as is specified in Exhibit B hereto. A Purchaser's commitment to purchase Notes shall be deemed to have been made on the basis of the representations and warranties of the Company and the Guarantor herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall describe the Notes to be purchased by the Purchaser pursuant thereto, specify the principal amount of such Notes, the price to be paid to the Company for such Notes, the currency or currency unit in which such Notes shall be denominated and be payable, whether the Notes will be issued in certificated or book-entry form, whether interest shall be payable at a fixed or floating rate, the date and time of delivery of payment for such Notes (the "Purchase Date"), the place of delivery of the Notes and payment therefor, the method of payment and any requirements for the delivery of the opinions of counsel, the certificates from the Company, the Guarantor or their officers, or the letter from Grant Thornton LLP pursuant to Section 6(b). Such Terms Agreement shall also specify the period of time, if applicable, referred to in Section 4(l). In connection with the resale of any Notes purchased by a Purchaser, such Purchaser may engage the services of any other broker or dealer in connection with such resale and may allow all or any portion of the discount received to such brokers and dealers. Delivery of the certificates for Notes sold to a Purchaser pursuant to any Terms Agreement shall be made as agreed to between the Company and the Purchaser as set forth in the respective Terms Agreement, not later than the Purchase Date set forth in such Terms Agreement, against payment of funds to the Company in the net amount due to the Company for such Notes by the method and in the form set forth in the respective Terms Agreement. (c) So long as Countrywide Securities Corporation is an Agent under the Selling Agency Agreement each Agent agrees that it will comply with the applicable provisions of Conduct Rule 2720(l) of the Conduct Rules of the National Association of Securities Dealers, Inc. 3. Offering Procedure. (a) Unless otherwise agreed between the Company and each agent, each agent shall communicate to the Company, orally or in writing, each offer to purchase Notes received by such agent (unless such offer is rejected by such agent in accordance herewith) on terms previously communicated by the Company to such agent, and unless otherwise agreed between the Company and each agent, the Company shall have the sole right to accept such offers to purchase Notes and may refuse any proposed purchase of Notes in whole or in part for any reason. (b) Unless otherwise agreed between the Company and each agent, each agent shall have the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes, as a whole or in part, and any such rejection shall not be deemed a breach of its agreement contained herein. Each 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 and the Guarantor, jointly and severally, agree with each Agent that: ---------- (a) Prior to the termination of the offering of the Notes, the Company and the Guarantor will not file any amendment of the Registration Statement or supplement to the Prospectus (except for a supplement relating to an offering of securities other than the Notes and related Guarantees) unless the Company or the Guarantor has furnished to such Agent a copy for its review prior to filing and will not file any such proposed amendment or supplement to which such Agent may reasonably object. Subject to the foregoing sentence, the Company and the Guarantor will cause each supplement to the Prospectus to be filed (or mailed for filing) with the Commission as required pursuant to Rule 424. The Company and the Guarantor will promptly advise such Agent (i) when each supplement to the Prospectus shall have been filed (or mailed for filing) with the Commission pursuant to Rule 424, (ii) when any amendment of the Registration Statement shall have become effective, (iii) of any request by the Commission for any amendment of the Registration Statement or amendment of 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 or the Guarantor of any notification with respect to the suspension of the qualification of the Notes and related Guarantees for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company and the Guarantor will use their 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 and related Guarantees is required to be delivered under the Act, any event occurs as a result of which the Registration Statement, as then amended, or 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, any facts or events arise which, individually or in the aggregate, would represent a fundamental change in the information set forth in the Registration Statement or the Prospectus, 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 and regulations thereunder, the Company and the Guarantor promptly will (i) notify such Agent to suspend the solicitation of offers to purchase Notes (and, if so notified, such Agent shall forthwith suspend such solicitation and cease using the Prospectus as then amended or 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 an amendment or supplement which will effect such compliance and (iii) will supply any such amended or supplemented Prospectus to such Agent in such quantities as such Agent may reasonably request. If such amendment or supplement, and any documents, certificates and opinions furnished to such Agent pursuant to paragraph (f) of this Section 4 in connection with the preparation or filing of such amendment or supplement are reasonably satisfactory in all respects to such Agent, such Agent 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 such Agent's obligation to solicit offers to purchase Notes hereunder. (c) As soon as practicable, the Guarantor will make generally available to the security holders of the Guarantor and to such Agent an earnings statement which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (d) The Company and the Guarantor will furnish to such Agent and to its counsel, without charge, copies of the Registration Statement (including exhibits thereto) and each amendment thereto which shall become effective and, so long as delivery of a prospectus may be required by the Act, as many copies of any preliminary prospectus and the Prospectus and any amendments thereof and supplements thereto as such Agent may reasonably request. (e) The Company and the Guarantor will arrange for the qualification of the Notes and related Guarantees for sale under the laws of such jurisdictions as such Agent may designate, will maintain such qualifications in effect so long as required for the distribution of the Notes and related Guarantees, and will arrange for the determination of the legality of the Notes and related Guarantees for purchase by institutional investors. (f) The Company and the Guarantor shall furnish to such Agent and counsel for such Agent, such documents, certificates of officers and opinions of counsel relating to their respective businesses, operations and affairs, the Registration Statement, any preliminary prospectus, the Prospectus, and any amendments or supplements thereto, the Indenture, the Notes, the Guarantees, this Agreement, the Procedures and the performance by the Company and the Guarantor of their respective obligations hereunder and thereunder as such Agent may from time to time and at any time prior to the termination of this Agreement reasonably request. (g) The Company and the Guarantor shall, whether or not any sale of the Notes is consummated, (i) pay all expenses incident to the performance of their obligations under this Agreement, including the fees and disbursements of its accountants and counsel, the cost of printing (or otherwise producing) and delivery of the Registration Statement, the Prospectus, all amendments thereof and supplements thereto, the Indenture, this Agreement and all other documents relating to the offering, the cost of preparing, printing, packaging and delivering the Notes and related Guarantees, the fees and disbursements, including fees of counsel, incurred in connection with the qualification of the Notes and related Guarantees for sale and determination of eligibility for investment of the Notes and related Guarantees under the securities or blue sky laws of each such jurisdiction as such Agent may reasonably designate, the fees and disbursements of the Trustee, the Calculation Agent (as such term is used in the Prospectus, as supplemented, relating to the Notes and related Guarantees) and the fees of any agency that rates the Notes, and (ii) reimburse such Agent on a monthly basis for all out-of-pocket expenses (including without limitation advertising expenses) incurred by such Agent and approved by the Company or the Guarantor in advance, in connection with the offering and the sale of the Notes and related Guarantees, and (iii) be responsible for the reasonable fees and disbursements of such Agent's counsel incurred heretofore or hereafter in connection with the offering and sale of the Notes and related Guarantees. (h) Each acceptance by the Company of an offer to purchase Notes and each delivery of Notes by the Company will be deemed to be a reconfirmation to you, as of the date of such acceptance or delivery, of the representations and warranties of the Company and the Guarantor in Section 1(b). (i) Each time that the Registration Statement or the Prospectus is amended or supplemented (other than by an amendment or supplement (i) relating to an offering of securities other than the Notes and related Guarantees or (ii) providing solely for the specification of the terms of the Notes (excluding (a) any change in the formula by which interest rates on the Notes may be determined and (b) any information relating to Specified Currencies other than U.S. dollars)) or there is filed with the Commission any document incorporated by reference into the Prospectus, the Company and the Guarantor will each deliver or cause to be delivered forthwith to such Agent a certificate of its President, Managing Director or any Vice President and its principal financial or accounting officer or the Treasurer, dated the date of the effectiveness of such amendment or the date of filing of such supplement, in form reasonably satisfactory to such Agent, to the effect that the statements contained in the certificate that was last furnished to such Agent pursuant to either Section 5(e) or this Section 4(i) are true and correct at the time of the effectiveness of such amendment or the filing of such supplement as though made at and as of such time (except that (i) the last day of the fiscal quarter for which financial statements of the Guarantor were last filed with the Commission shall be substituted for the corresponding date in such certificate and (ii) such statements shall 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) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Section 5(e), but modified to relate to the last day of the fiscal quarter for which financial statements of the Guarantor 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. (j) Each time that the Registration Statement or the Prospectus is amended or supplemented (other than by an amendment or supplement (i) relating to an offering of securities other than the Notes and related Guarantees, (ii) providing solely for the specification of the terms of the Notes (excluding (a) any change in the formula by which interest rates on the Notes may be determined and (b) any information relating to Specified Currencies other than U.S. dollars) or (iii) setting forth or incorporating by reference financial statements or other financial information as of and for a fiscal quarter, unless, in the case of clause (iii) above, in such Agent's reasonable judgment, such financial statements or other financial information are of such a nature that an opinion of counsel should be furnished) or there is filed with the Commission any document incorporated by reference into the Prospectus, the Company and the Guarantor shall furnish or cause to be furnished forthwith to such Agent the written opinion of the General Counsel of the Company and the Guarantor, or such other counsel satisfactory to such Agent, dated the date of the effectiveness of such amendment or the date of filing of such supplement, in form satisfactory to such Agent, covering all of the matters referred to in the opinions set forth in Sections 5(b) and 5(c) 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 such Agent may furnish a letter to the effect that such Agent 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); provided, however, that, upon a reasonable request from such Agent, the Company and the Guarantor shall cause to be furnished forthwith to such Agent the written opinion of Munger, Tolles & Olson LLP, counsel to the Company and the Guarantor, dated the date of the effectiveness of such amendment or the date of filing of such supplement, in form satisfactory to such Agent, of the same tenor as the opinions 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. (k) Each time that the Registration Statement or the Prospectus is amended or supplemented to set forth amended or supplemental financial information or such amended or supplemental information is incorporated by reference in the Registration Statement or the Prospectus, the Company and the Guarantor shall cause Grant Thornton LLP, their independent public accountants, forthwith to furnish to such Agent a letter, dated the date of the effectiveness of such amendment or the date of filing of such supplement, in form satisfactory to such Agent, of the same tenor as the letter referred to in Section 5(f) 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 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, Grant Thornton LLP may limit the scope of such letter, which shall be satisfactory in form to such Agent, to the unaudited financial statements included in such amendment or supplement, unless any other information included or incorporated by reference therein of an accounting, financial or statistical nature is of such a nature that, in such Agent's reasonable judgment, such letter should cover such other information. (l) During the period, if any, specified in any Terms Agreement, the Company and the Guarantor shall not, without the prior consent of the Purchaser, issue or announce the proposed issuance of any debt securities of the Company or the Guarantor in a public offering or register any debt securities of the Company or the Guarantor under the Act in connection with any secondary distribution of such debt securities. 5. Conditions to the Obligations of the Agents. The obligations of any 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 and the Guarantor contained herein as of the date hereof, as of the date of the effectiveness of any amendment to the Registration Statement (including the filing of any document incorporated by reference therein), as of the date of any supplement to the Prospectus and as of each Settlement Date, to the accuracy of the statements of the Company and the Guarantor made in any certificates pursuant to the provisions hereof, to the performance by the Company and the Guarantor of their respective obligations hereunder and to the following additional conditions: (a) No stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall have been issued, and no proceedings for that purpose shall have been instituted or threatened. (b) The Company and the Guarantor shall have furnished to the agents the opinion or opinions of Munger, Tolles & Olson LLP, counsel to the Company and the Guarantor, dated the date hereof, substantially as set forth below, with such additional qualifications and exceptions as shall be acceptable to the agents and their counsel: (i) Each of the Company and the Guarantor is a corporation duly incorporated, validly existing and in good standing under the laws of the state of its incorporation and has the corporate power and authority to own its properties and to conduct its business as described in the Prospectus. (ii) The Company and the Guarantor have the corporate power and authority to enter into this Agreement and the Terms Agreement (if applicable), and this Agreement and the Terms Agreement (if applicable) have been duly and validly authorized, executed and delivered by the Company and the Guarantor, respectively. (iii) The form and general terms of the Notes have been duly and validly authorized and established in conformity with the provisions of the Indenture by all necessary corporate action by the Company, and when the particular terms of the Notes have been duly established in accordance with the provisions of the Indenture, the Procedures and the resolutions of the Board of Directors of the Company and such Notes have been duly executed, authenticated and delivered against payment therefor in accordance with the provisions of the Indenture, the Procedures and this Agreement, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms and the terms of the Indenture, and the holders of the Notes will be entitled to the benefits of the Indenture; and the Indenture has been duly authorized, executed and delivered by each of the Company and Guarantor, has been qualified under the Trust Indenture Act, and constitutes a legal, valid and binding obligation enforceable against each of the Company and the Guarantor in accordance with its terms. (iv) The Guarantees, in the forms certified to by an authorized officer of the Guarantor, have been duly and validly authorized by all necessary corporate action by the Guarantor and, upon due issuance, authentication and delivery of the related Notes and due endorsement of the Guarantees, the Guarantees will have been duly executed, issued and delivered and will constitute the legal, valid and binding obligations of the Guarantor enforceable against the Guarantor in accordance with their terms and the terms of the Indenture, and the holders of the Notes upon which the Guarantees are endorsed will be entitled to the benefits of the Indenture. (v) The Registration Statement has become effective under the Act; any required filing of the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued, no proceedings for that purpose have been instituted or threatened and the Registration Statement and the Prospectus (other than (i) the financial statements and other financial and statistical information contained therein and (ii) the Statement of Eligibility on Form T-1 filed as an exhibit thereto, as to which such counsel need express no opinion), as of their respective effective or issue dates, as the case may be, appear on their face to be responsive as to form in all material respects with the applicable requirements of the Act and the Rules and Regulations and the Trust Indenture Act and the rules and regulations of the Commission thereunder. (vi) No consent, approval, authorization or order of any United States federal or New York, California or (with respect to matters arising under the Delaware General Corporation Law) Delaware court or governmental agency or body is required for the consummation of the transactions contemplated by this Agreement or the Indenture, except such as have been obtained under the Act and such as may be required under the securities and blue sky laws, rules or regulations of any jurisdiction in connection with the purchase and distribution of the Notes and related Guarantees by the agents and such other approvals as have been obtained. (vii) Neither the issue and sale of the Notes (in the forms certified to by an authorized officer of the Company), the compliance by the Company and the Guarantor with all the provisions of this Agreement, the Indenture, the Notes or the Guarantees (in the form certified to by an authorized officer of the Guarantor), the consummation of the transactions herein or therein contemplated nor the fulfillment of the terms hereof or thereof will conflict with, result in a breach of, or constitute a default under the charter or bylaws of the Company or the Guarantor or the terms of any indenture or other agreement or instrument filed with the Commission and to which the Company or the Guarantor or any of the Guarantor's subsidiaries is a party or bound, or any order, decree, judgment or regulation (other than any federal or state securities or blue sky laws, rules or regulations) known to such counsel to be applicable to the Company or the Guarantor or any of the Guarantor's subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Company or the Guarantor or any of the Guarantor's subsidiaries. (viii) To the best knowledge of such counsel, no holders of securities of the Company or the Guarantor have rights to the registration of such securities under the Registration Statement. (ix) Such counsel confirms (i) that the statements in the Prospectus under the caption "Federal Income Tax Consequences", insofar as such statements constitute a summary of the legal matters referred to therein, fairly present the information disclosed therein in all material respects, (ii) the conformity in all material respects of the Notes (in the forms certified to by an authorized officer of the Company) to the statements relating thereto in the Prospectus, and (iii) the conformity in all material respects of the Indenture and the Guarantees to the statements relating thereto in the Prospectus under the captions "Description of Notes" and "Description of Debt Securities of Countrywide Home Loans and Related Guarantees of Countrywide Credit Industries." Such counsel shall also state that, in the course of their engagement to represent or advise the Company and the Guarantor professionally, they have not become aware of any pending legal proceeding before any court or administrative agency or authority or any arbitration tribunal, nor have they devoted substantive attention in the form of legal representation as to any current overtly threatened litigation against or directly affecting the Company or its subsidiaries or the Guarantor or its subsidiaries, in each case that is required to be described in the Registration Statement or the Prospectus and is not so described. In making the foregoing statement, they shall endeavor, to the extent they believe necessary, to determine from lawyers currently in their firm who have performed substantive legal services for the Company or the Guarantor, whether such services involved substantive attention in the form of legal representation concerning pending legal proceedings or overtly threatened litigation of the nature referred to above. Beyond that, they need not make any review, search or investigation of public files or records or files or records of the Company or the Guarantor, or of their respective transactions, or any other investigation or inquiry with respect to the foregoing statement. Such counsel shall also state that in the course of the preparation by the Company, the Guarantor and their counsel of the Registration Statement and Prospectus (other than the Incorporated Documents (as defined below)), such counsel attended conferences with certain of the officers of, and the independent public accountants for, the Company and the Guarantor, at which the Registration Statement and Prospectus were discussed. Given the limitations inherent in the independent verification of factual matters and the character of determinations involved in the registration process, such counsel need not pass upon and need not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and Prospectus including the Incorporated Documents, except as specifically described in the opinion set forth in paragraph (ix) above. Subject to the foregoing and on the basis of the information such counsel gained in the performance of the services referred to above, including information obtained from officers and other representatives of the Company and Guarantor, such counsel shall state that no facts have come to such counsel's attention that have caused it to believe that the Registration Statement, at the time it became effective, 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, at its date or at the date hereof, included or includes, as the case may be, any untrue statement of material fact or omitted or omits, as the case may be, to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that such counsel need not express a view or belief with respect to (i) the financial statements, the related notes and schedules thereto or other financial and statistical data included or incorporated by reference in the Registration Statement and Prospectus or (ii) any part of the Registration Statement which shall constitute a Statement of Eligibility on Form T-1 under the Trust Indenture Act. References to the Prospectus in this Section 5(b) include any amendments or supplements thereto at the date hereof. 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 California, the State of Delaware (but only with respect to the Delaware General Corporation Law) or the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for the agents, (B) as the matters involving the application of laws of the State of New York, to the extent specified in such opinion, upon the opinion of Brown & Wood LLP being delivered to the agents as of the date thereof and (C) as to matters of fact, to the extent they deem proper, on certificates and oral or written statements and other information of or from public officials and officers and representatives of the Company, the Guarantor, their respective subsidiaries and others. In rendering the opinions set forth in paragraphs (iii) and (iv), such counsel may state that such opinions are subject to the following: (i) bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other laws now or hereafter in effect affecting creditors' rights generally; and (ii) general principles of equity (including, without limitation, standards of materiality, good faith, fair dealing and reasonableness) whether such principles are considered in a proceeding in equity or at law. In rendering the opinions set forth above, such counsel need not express an opinion as to the legality, validity, binding effect or enforceability of any provision of the Notes, the Indenture or the Guarantees providing for payments thereunder in a currency other than currency of the United States of America to the extent that a court of competent jurisdiction will under applicable law convert any judgment rendered in such other currency into currency of the United States of America or to the extent that payment in a currency other than currency of the United States of America is contrary to applicable law. In rendering the opinions set forth above, such counsel may state that it has assumed, with the permission of the agents, that the amount of Notes to be issued from time to time will not violate any provision in any such agreement referred to in paragraph (vii) which imposes limits on the amount of debt of the Company, the Guarantor or any of the Guarantor's subsidiaries which may be outstanding at any one time (whether directly or indirectly, through satisfaction of financial ratios or otherwise). (c) The Company and the Guarantor shall have furnished to the agents the opinion or opinions of Sandor E. Samuels, General Counsel of the Company and the Guarantor, dated the date hereof, substantially as set forth below, with such additional qualifications and exceptions as shall be acceptable to the agents and their counsel: (i) Each Subsidiary, if any, is a corporation, duly incorporated, validly existing and in good standing under the laws of the state of its incorporation, with the corporate power and authority to own its properties and to conduct its business as described in the Prospectus. (ii) Each of the Company, the Guarantor and the Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification wherein it owns or leases material properties or conducts material business other than jurisdictions in which the failure to so qualify, when considered in the aggregate and not individually, would not have a material adverse effect on the Company or the Guarantor and its Subsidiaries considered as one enterprise. (iii) All the outstanding shares of capital stock of the Company and each Subsidiary have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in the Prospectus, all outstanding shares of capital stock of the Company and the Subsidiaries are owned by the Guarantor 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. (iv) The outstanding shares of common stock of the Guarantor have been duly and validly authorized and issued and are fully paid and nonassessable. (v) Neither the issue and sale of the Notes, the compliance by the Company and the Guarantor with all the provisions of this Agreement, the Indenture, the Notes or the Guarantees, the consummation of any other of the transactions herein or therein contemplated nor the fulfillment of the terms hereof or thereof will conflict with, result in a breach of, or constitute a default under the charter or by-laws of the Company or the Guarantor or, to the knowledge of such counsel, the terms of any indenture or other agreement or instrument to which the Company or the Guarantor or any of the Guarantor's subsidiaries is a party or bound, or any order, decree, law, judgment, rule or regulation known to such counsel to be applicable to the Company or the Guarantor or any of the Guarantor's subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Company or the Guarantor or any of the Guarantor's subsidiaries. (vi) The documents (the "Incorporated Documents") incorporated by reference in the Registration Statement and Prospectus (except for the financial statements and other financial or statistical data, as to which no opinion need be expressed), as of the dates they were filed with the Commission, complied as to form in all material respects to the requirements of the Act and the Rules and Regulations and the Exchange Act and the rules and regulations of the Commission thereunder. (vii) No consent, approval, authorization or order of any court or governmental agency or body is required for the consummation of the transactions contemplated by this Agreement or the Indenture, except such as have been obtained under the Act and such as may be required under the securities and blue sky laws, rules and regulations of any jurisdiction in connection with the purchase and distribution of the Notes and related Guarantees by the agents and such other approvals as have been obtained. In rendering the opinions set forth above, such counsel may state that it has assumed, with the permission of the agents, that the amount of Notes to be issued from time to time will not violate any provision in any such agreement referred to in paragraph (v) which imposes limits on the amount of debt of the Company, the Guarantor or any of the Guarantor's subsidiaries which may be outstanding at any one time (whether directly or indirectly, through satisfaction of financial ratios or otherwise). (d) Such agent shall have received from Brown & Wood LLP, counsel for the agents, such opinion or opinions, dated the date hereof, with respect to the issuance and sale of the Notes and related Guarantees, this Agreement, the Indenture, the Registration Statement, the Prospectus and other related matters as such agent may reasonably require, and the Company and the Guarantor shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (e) The Company and the Guarantor shall have each furnished to such agent a certificate of its President, a Managing Director or a Vice President and its Treasurer or an Assistant Treasurer, dated the date hereof, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Prospectus and this Agreement and that: (i) the representations and warranties of the Company or the Guarantor, as the case may be, 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 or the Guarantor, as the case may be, 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 such agent to solicit offers to purchase the Notes; (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 knowledge of the Company or the Guarantor, as the case may be, threatened; and (iii) since the date of the most recent financial statements included or incorporated in the Prospectus, there has been no material adverse change in the condition (financial or otherwise), earnings, business or properties of the Company or the Guarantor and its subsidiaries considered as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Prospectus. (f) On the date hereof, Grant Thornton LLP shall have furnished to such agent a letter or letters (which may refer to letters previously delivered to such agent), dated as of the date hereof, in form and substance satisfactory to such agent, confirming that they are independent accountants within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder and stating in effect that: (i) in their opinion the audited consolidated financial statements and financial statement schedules included or incorporated in the Registration Statement and the Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations; (ii) on the basis of a reading of the latest unaudited consolidated financial statements made available to them; carrying out certain specified procedures (which shall include, without limitation, the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in SAS No. 71, Interim Financial Information, with respect to such unaudited consolidated financial statements included or incorporated by reference in the Registration Statement or the Prospectus); a reading of the minutes of the meetings of the stockholders, directors and standing committees thereof; and inquiries of certain officials who have responsibility for financial and accounting matters as to transactions and events subsequent to the date of the most recent audited financial statements included or incorporated in the Prospectus, nothing came to their attention which caused them to believe that: (1) any unaudited financial statements included or incorporated in the Registration Statement and the Prospectus do not comply as to form in all material respects with applicable accounting requirements of the Exchange Act as they apply to quarterly reports on Form 10-Q or that any material modifications should be made to said unaudited financial statements for them to be in conformity with generally accepted accounting principles; (2) with respect to the period subsequent to the date of the most recent financial statements (other than any capsule information), audited or unaudited, in or incorporated in the Registration Statement and the Prospectus, there was any change, at a specified date not more than three business days prior to the date of the letter, in the capital stock or long and intermediate term debt of the Company or the Guarantor and its subsidiaries taken as a whole or any decreases in the shareholders' equity or consolidated net assets as compared with the amounts shown on the most recent consolidated balance sheet included or incorporated in the Registration Statement and the Prospectus, or for the period from the date of the most recent financial statements included or incorporated in the Registration Statement and the Prospectus to such specified date there were any decreases, as compared with the corresponding period in the preceding year in consolidated revenues (net of interest charges), earnings before income taxes or net earnings of the Company or the Guarantor and its subsidiaries, except in all instances for changes or decreases set forth in such letter; or (3) the amounts included in any unaudited "capsule" information included or incorporated in the Registration Statement and the Prospectus do not agree with the amounts set forth in the unaudited financial statements for the same periods or were not determined on a basis substantially consistent with that of the corresponding amounts in the audited financial statements included or incorporated in the Registration Statement and the Prospectus; (iii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature set forth in the Registration Statement and the Prospectus and in Exhibit 12 to the Registration Statement, the information included or incorporated in Items 1, 2, 6, 7 and 11 of the Guarantor's Annual Report on Form 10-K (and, if filed, the Company's Annual Report on Form 10-K), incorporated in the Registration Statement and the Prospectus and the information included in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" included or incorporated in the Company's or the Guarantor's Quarterly Reports on Form 10-Q incorporated in the Registration Statement and the Prospectus, agrees with the accounting records of the Company, the Guarantor and their respective subsidiaries, excluding any questions of legal interpretation; and (iv) if pro forma financial statements are included or incorporated in the Registration Statement and the Prospectus, on the basis of a reading of the unaudited pro forma financial statements, carrying out certain specified procedures, inquiries of certain officials of the Company or the Guarantor, as the case may be, who have responsibility for financial and accounting matters, and proving the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts in the pro forma financial statements, nothing came to their attention which caused them to believe that the pro forma financial statements do not comply in form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments have not been properly applied to the historical amounts in the compilation of such statements. References to the Registration Statement and the Prospectus in this paragraph (f) are to such documents as amended and supplemented at the date of the letter. (g) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus (as amended or supplemented, in the case of a Terms Agreement, but exclusive of any amendment or supplement subsequent to the date of execution of such Terms Agreement) there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (f) of this Section 5 or (ii) any change, or any development involving a prospective change, in or affecting the business or properties of the Company, the Guarantor and their respective subsidiaries the effect of which, in any case referred to in clause (i) or (ii) above, is, in the judgment of such Agent, so material and adverse as to make it impractical or inadvisable to proceed with the soliciting of offers to purchase the Notes as contemplated by the Registration Statement and the Prospectus (or, in the case of a Terms Agreement, to proceed with the offering or the delivery of the Notes to be purchased as contemplated by the Terms Agreement). (h) Prior to the date hereof, the Company and the Guarantor shall have furnished to such agent such further information, certificates and documents as such agent may reasonably request. (i) Prior to the date hereof, the Notes shall have been rated, and on the date hereof the Notes shall be rated, at least BBB- by Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P") and Baa3 by Moody's Investors Service, Inc. ("Moody's"). If any of the conditions specified in this Section 5 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to such agent and its counsel, this Agreement and all obligations of such agent hereunder may be canceled at any time by such agent. Notice of such cancellation shall be given to the Company and the Guarantor in writing or by telephone or telegraph confirmed in writing. The documents required to be delivered by this Section 5 shall be delivered to the offices of Brown & Wood LLP, One World Trade Center, New York, New York 10048, or such other location as shall be mutually agreed upon, on the date hereof. 6. Conditions to the Obligations of a Purchaser. The obligations of a Purchaser to purchase Notes pursuant to any Terms Agreement will be subject to the accuracy of the representations and warranties on the part of the Company and the Guarantor herein as of the date of the respective Terms Agreement and as of the Purchase Date thereunder, to the performance and observance by the Company and the Guarantor of all covenants and agreements herein contained on its part to be performed and observed and to the following additional conditions precedent: (a) No stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall have been issued and no proceedings for that purpose shall have been instituted or threatened. (b) Except to the extent modified by the respective Terms Agreement, the Purchaser shall have received, appropriately updated in a manner consistent with Section 5 hereof, (i) certificates of the Company and the Guarantor, dated as of the Purchase Date, to the effect set forth in Section 5(e), (ii) the opinion or opinions of Munger, Tolles & Olson LLP, counsel to the Company and the Guarantor, dated as of the Purchase Date, to the effect set forth in Section 5(b), as modified such that such counsel shall state that no facts have come to such counsel's attention that have caused it to believe that the Registration Statement, at the time it became effective and, if subsequently filed, as of the date of the Guarantor's Annual Report on Form 10-K (and, if filed, the Company's Annual Report on Form 10-K), contained an untrue statement of material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the opinion or opinions of Sandor E. Samuels, General Counsel to the Company and the Guarantor, dated as of the Purchase Date, to the effect set forth in Section 5(c), as modified such that such counsel shall state that no facts have come to such counsel's attention that have caused it to believe that the Registration Statement, at the time it became effective and, if subsequently filed, as of the date of the Guarantor's Annual Report on Form 10-K (and, if filed, the Company's Annual Report on Form 10-K), contained an untrue statement of material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (iv) the opinion or opinions of Brown & Wood llp, counsel for the Purchaser, dated as of the Purchase Date, to the effect set forth in Section 5(d), (v) letter of Grant Thornton LLP, dated as of the Purchase Date, to the effect set forth in Section 5(f), and (vi) bringdown letter of Grant Thornton LLP, dated as of the related Settlement Date. (c) The conditions set forth in Section 5(g) shall have been satisfied. (d) Prior to the Purchase Date, the Company and the Guarantor shall have furnished to the Purchaser such further information, certificates and documents as the Purchaser may reasonably request. (e) Prior to and at the Purchase Date, the Notes shall have been rated at least BBB- by S&P and Baa3 by Moody's. (f) Subsequent to the execution of any Terms Agreement and prior to the Purchase Date pursuant to such Terms Agreement, the rating assigned by S&P or Moody's to any debt securities of the Company or the Guarantor has not been lowered and neither S&P nor Moody's has publicly announced that it has under surveillance or review, with possible negative implications, its rating of any debt securities of the Company or the Guarantor. If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Purchaser and its counsel, this Agreement and all obligations of the Purchaser hereunder may be canceled at, or at any time prior to, the respective Purchase Date by the Purchaser. Notice of such cancellation shall be given to the Company or the Guarantor in writing or by telephone or telegraph confirmed in writing. 7. Reimbursement of the Agent's Expenses. If any condition to the obligations of any Agent set forth in Section 5 hereof is not satisfied, if any condition to the obligations of a Purchaser set forth in Section 6 hereof is not satisfied, if any termination pursuant to Section 9 hereof shall occur or in the case of any refusal, inability or failure on the part of the Company or the Guarantor to perform any agreement herein or comply with any provision hereof other than by reason of a default by an Agent, the Company and the Guarantor will reimburse such Agent upon demand for all expenses that shall have been incurred by such Agent pursuant to Section 4(g) hereof in connection with this Agreement. 8. Indemnification and Contribution. (a) The Company and the Guarantor, jointly and severally, agree to indemnify and hold harmless each Agent and each person who controls such Agent 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 such Agent 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 Notes 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 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 and the Guarantor 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 or the Guarantor by or on behalf of such Agent specifically for use in connection with the preparation thereof, and (ii) such indemnity with respect to any preliminary Prospectus or any Prospectus as supplemented or amended shall not inure to the benefit of any Agent (or any person controlling such Agent) from whom the person asserting any such loss, claim, damage or liability purchased the Notes which are the subject thereof if such Agent (or any person controlling such Agent) received a copy of such Prospectus (or such Prospectus as so amended or supplemented) and such person did not receive a copy of the Prospectus (or the Prospectus as amended or 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 or the alleged untrue statement or omission was corrected in the Prospectus (or the Prospectus as amended or supplemented). This indemnity agreement will be in addition to any liability which the Company or the Guarantor may otherwise have. (b) Each Agent agrees to indemnify and hold harmless the Company and the Guarantor, their respective directors, each of their officers who sign the Registration Statement, and each person who controls the Company or the Guarantor within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company and the Guarantor to such Agent, but only with reference to written information relating to such Agent furnished to the Company or the Guarantor by or on behalf of such Agent 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 such Agent may otherwise have. The Company and the Guarantor acknowledge that the statements set forth in the last sentence of paragraph five and paragraphs six, seven, eight and ten under the heading "Plan of Distribution of Notes," insofar as it relates to such Agent, in the Prospectus constitute the only information furnished in writing by or on behalf of such Agent 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 8 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 8, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve the indemnifying party from any liability which it may have to any indemnified party hereunder, except and to the extent of any prejudice to such indemnifying party arising from such failure to provide notice, and will not, in any event, relieve the indemnifying party from any liability which it may have to any indemnified party other than under this Section 8. 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 8 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 for the expenses of more than one separate counsel, approved by the Agents in the case of paragraph (a) of this Section 8, 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 the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable to such indemnified party as a result of such losses, claims, damages, or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantor on the one hand and each Agent on the other from the offering of the Notes to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Guarantor on the one hand and each Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantor on the one hand and each Agent on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total commissions received by each Agent. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Guarantor on the one hand or any Agent on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Guarantor and each Agent agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Agents were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Agent shall be required to contribute any amount in excess of the amount of commission or discount received by it in connection with the offering of the Notes that were the subject of the claim for indemnification. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Agents in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Notes and not joint. 9. Termination. This Agreement will continue in effect until terminated as provided in this ----------- Section 9. (a) This Agreement may be terminated by either the Company or any Agent giving written notice of such termination to the other party hereto. 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. This Agreement may be terminated as to one or more of the Agents, and to the extent not terminated with respect to any Agent, this Agreement shall remain in full force and effect as between the Company and any such Agent. 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(g), Section 7, Section 8 and Section 10 and except that if terminated between the date of acceptance of an offer and the Settlement Date or Purchase Date, Section 4, Section 5 and Section 6 shall also survive with respect to such sale. (b) Each Terms Agreement shall be subject to termination in the absolute discretion of the Purchaser, by notice given to the Company and the Guarantor prior to delivery of and payment for Notes to be purchased thereunder, if prior to such time (i) trading in securities generally, or in the securities of the Guarantor, on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a banking moratorium shall have been declared by either federal or New York State authorities or, in the case of Notes denominated in other than U.S. dollars, by the authorities of the country of the currency in which such Notes are so denominated or (iii) there shall have occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States or in the country or countries of origin of any foreign currency or currency unit in which the Notes are denominated, indexed or payable is such as to make it, in the judgment of the Purchaser, impracticable to market such Notes. 10. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company, the Guarantor or any of their officers and of each Agent 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 such Agent or the Company, the Guarantor or any of their officers, directors or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Notes. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement. 11. Right of Person Who Agreed to Purchase to Refuse to Purchase. The Company and the Guarantor agree that any person who has agreed to purchase and pay for any Note, including a Purchaser and any person who purchases pursuant to a solicitation by any of the Agents, shall have the right to refuse to purchase such Note if, at the Settlement Date therefor, either (a) any condition set forth in Section 5 or 6, as applicable, shall not be satisfied or (b) subsequent to the agreement to purchase such Note, any change, or any development involving a prospective change, in or affecting the business or properties of the Company or the Guarantor and its subsidiaries shall have occurred the effect of which is, in the reasonable judgment of the Purchaser or the Agent which presented the offer to purchase such Note, as applicable, so material and adverse as to make it impractical or inadvisable to proceed with the delivery of such Note. 12. Notices. All communications hereunder will be in writing and effective only on receipt, and, ------- if sent to an Agent, will be mailed, delivered or telegraphed and confirmed to such Agent, at the address specified in Schedule 1 hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 4500 Park Granada, Calabasas, California 91302, Attention: General Counsel. 13. 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 8 hereof, and no other person will have any right or obligation hereunder. 14. Applicable Law. This Agreement will be governed by and construed in accordance with the laws -------------- of the State of New York applicable to agreements made and to be performed in said State. [Signature Page to Follow] 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 the acceptance by each of you shall represent a binding agreement among the Company, the Guarantor and each of you. Very truly yours, COUNTRYWIDE HOME LOANS, INC. By: __________________________________ Name: Title: COUNTRYWIDE CREDIT INDUSTRIES, INC. By: __________________________________ Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date hereof. LEHMAN BROTHERS INC. By:______________________________ Title: BANC OF AMERICA SECURITIES LLC By:______________________________ Title: CHASE SECURITIES INC. By:______________________________ Title: DEUTSCHE BANK ALEX. BROWN INC. DEUTSCHE BANK ALEX. BROWN INC. By:_____________________________ By:_____________________________ Title: Title: - --------------------------------- Goldman, Sachs & Co. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By:______________________________ Title: MORGAN STANLEY & CO. INCORPORATED By:______________________________ Title: SALOMON SMITH BARNEY INC. By:______________________________ Title: COUNTRYWIDE SECURITIES CORPORATION By:______________________________ Title: 24 SCHEDULE 1 Selling Agency Agreement dated February [ ], 2001 Unless otherwise agreed between the Company and such Agent, the Company agrees to pay any Agent a commission equal to the following percentage of the principal amount of each Note sold by such Agent: Term Commission Rate(a) From 9 months to less than 1 year............................ 0.125% From 1 year to less than 18 months........................... 0.150% From 18 months to less than 2 years.......................... 0.200% From 2 years to less than 3 years............................ 0.250% From 3 years to less than 4 years............................ 0.350% From 4 years to less than 5 years............................ 0.450% From 5 years to less than 6 years............................ 0.500% From 6 years to less than 7 years............................ 0.550% From 7 years to less than 10 years........................... 0.600% From 10 years to less than 15 years.......................... 0.625% From 15 years to less than 20 years.......................... 0.650% From 20 years up to and including 30 years(b) ............... 0.750% - ------------- (a) With respect to each Note that is an Original Issue Discount Note (as defined in the Indenture), the commission payable to each Agent with respect to each such Note sold as a result of a solicitation made by such Agent shall be based on the purchase price of such Note, rather than on the principal amount of such Note. (b) Commissions for Notes with terms in excess of 30 years will be agreed upon by the Company and the related Agent at the time of sale. Addresses for Notices to Agents: Notices to Lehman Brothers Inc. shall be directed to it at 3 World Financial Center, 9th Floor, New York, New York 10285, Attention: Medium-Term Note Desk, Fax: (212) 526-1532. Notices to Banc of America Securities LLC shall be directed to it at 100 North Tryon Street, Charlotte, NC 28255, NC1-007-07-01, Attention: Product Management, Fax: (704) 388-9939. Notices to Chase Securities Inc. shall be directed to it at 270 Park Avenue, 8th Floor, New York, New York 10017, Attention: Medium-Term Note Desk, Fax: (212) 834-6081. Notices to Deutsche Bank Alex. Brown Inc. shall be directed to it at 31 W. 52nd Street, New York, New York 10019, Attention: Erich Mauff, Fax: (212) 469-7875. Notices to Goldman, Sachs & Co. shall be directed to it at 85 Broad Street, New York, New York 10004, Attention: Ben Smilchensky, Fax: (212) 902-0658. Notices to Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be directed to it at 4 World Financial Center, 15th Floor, New York, New York 10080, Attention: MTN Product Management, Fax: (212) 449-2234. Notices to Morgan Stanley & Co. Incorporated shall be directed to it at 1585 Broadway, 2nd Floor, New York, New York 10036, Attention: Manager, Continuously Offered Products, Fax: (212) 761-0780; with a copy to 1585 Broadway, 34th Floor, New York, New York 10036, Attention: Peter Cooper, Investment Banking Information Center, Fax: (212) 761-0260. Notices to Salomon Smith Barney Inc. shall be directed to it at Seven World Trade Center, New York, New York 10048, Attention: Medium-Term Note Department, Fax: (212) 783-2274. Notices to Countrywide Securities Corporation, 4500 Park Granada, CH-143, Calabasas, California 91302, Attention: Tom O'Hallaron, Fax: (818) 225-4014. 36 EXHIBIT A COUNTRYWIDE HOME LOANS, INC. MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES February [ ], 2001 Medium-Term Notes, Series J, Due Nine Months or More From Date of Issue (the "Notes") are to be offered on a continuing basis by Countrywide Home Loans, Inc. (the "Company"). Lehman Brothers Inc., Banc of America Securities LLC, Chase Securities Inc., Deutsche Bank Alex. Brown Inc., Goldman, Sachs & Co., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc. and Countrywide Securities Corporation (each individually, an "Agent", and collectively, the "Agents"), have agreed to solicit purchases of the Notes. The Agents will not be obligated to purchase Notes as principal. The Notes are being sold pursuant to a Selling Agency Agreement among the Company, Countrywide Credit Industries, Inc. (the "Guarantor") and the Agents dated February [ ], 2001 (the "Agency Agreement"). The Notes will be fully and unconditionally guaranteed as to payment of principal, premium, if any, and interest by the Guarantor (the "Guarantees"). The Notes will rank equally with all other unsecured and unsubordinated debt of the Company and have been registered with the Securities and Exchange Commission (the "Commission"). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Indenture referred to below. Each Note and related Guarantee will be issued under an Indenture dated as of January 1, 1992, as supplemented by Supplemental Indenture No. 1 thereto dated as of June 15, 1995 (collectively, the "Indenture"), among the Company, the Guarantor and The Bank of New York, as trustee (the "Trustee"). The Notes will bear interest at either fixed rates ("Fixed Rate Notes") or floating rates ("Floating Rate Notes"). Each Note will be represented by either a certificate delivered to the Holder thereof or a Person designated by such Holder (a "Certificated Note") or 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"). An owner of a Book-Entry Note will not be entitled to receive a certificate representing such Note except in the limited circumstances described in the Prospectus (as defined in the Agency Agreement). The procedures to be followed during, and the specific terms of, the solicitation of offers by the Agents and the sale as a result thereof by the Company are explained below. Certificated Notes will be issued in accordance with the administrative procedures set forth in Part I hereof and Book-Entry Notes will be issued in accordance with the administrative procedures set forth in Part II hereof. The Company will advise each Agent and the Trustee in writing of those persons handling administrative responsibilities with whom the Agents and the Trustee are to communicate regarding offers to purchase Notes and the details of their delivery. Administrative procedures and specific terms of the offering are explained below. To the extent the procedures set forth below conflict with the provisions of the Notes, the Indenture or the Agency Agreement, the relevant provisions of the Notes, the Indenture and the Agency Agreement shall control. PART I: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES Maturities: Each Certificated Note will mature on a date (the "Stated Maturity Date") nine months or more after the date of delivery by the Company of such Certificated Note (the "Settlement Date"), subject to any applicable provisions relating to redemption or repayment or the extension of maturity. Price to Public: Each Certificated Note will be issued at the percentage of principal - --------------- amount specified in the Prospectus. Currencies: The Certificated Notes will be denominated in U.S. dollars or in such other currency or currency unit as is specified in the Prospectus (the "Specified Currency"). Denominations: Except as set forth in the Certificated Note, the denomination of any - ------------- Certificated Note will be a minimum of U.S. $1,000 or any amount in excess thereof which is an integral multiple of U.S. $1,000 or, in a Specified Currency other than U.S. dollars, of the equivalent of U.S. $1,000 and any amount in excess thereof which is an integral multiple of the equivalent of U.S. $1,000, as determined pursuant to the provisions of the Indenture. Registration: Certificated Notes will be issued only in fully registered form. - ------------ Interest Payments: Except as set forth in the Certificated Note, each Certificated Note - ----------------- which is a Fixed Rate Note will bear interest from the Settlement Date of such Certificated Note at the annual rate stated on the face thereof, payable semiannually on January 15 and July 15 of each year (each, an "Interest Payment Date") and on the Stated Maturity Date or date of earlier redemption or repayment (such date is herein referred to as the "Maturity Date" with respect to the principal repayable on such date), and each Certificated Note which is a Floating Rate Note will bear interest as determined in the manner set forth on the face thereof, payable on the dates set forth on the face thereof. Unless otherwise specified on the face thereof, interest (including payments for partial periods) on Fixed Rate Notes will be calculated on the basis of a 360-day year of twelve 30-day months. Interest on Floating Rate Notes will be determined in the manner agreed upon by the Company and the purchaser thereof in accordance with the provisions of the Prospectus. Except as set forth in the Certificated Note, the "Record Date" with respect to any Interest Payment Date for Floating Rate Notes shall be the date 15 calendar days immediately preceding such Interest Payment Date, and for Fixed Rate Notes shall be the December 31 or June 30 next preceding such Interest Payment Date, whether or not such date shall be a Business Day, as defined in the Prospectus. The first payment of interest on any Certificated Note originally issued between a Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next Record Date to the Holder on such next succeeding Record Date. Notwithstanding the record date provisions above, interest payable on the Maturity Date will be payable to the person to whom principal shall be payable. Interest on the Certificated Notes will be paid in the Specified Currency by mailing a check (from an account at a bank located outside of the United States if such check is payable in a Specified Currency other than U.S. dollars) to the Holder at the address of such Holder appearing on the Security Register on the applicable Record Date; provided, however, that a -------- ------- Holder of U.S. $10,000,000 (or the equivalent thereof in a Specified Currency other than U.S. dollars) or more in aggregate principal amount of Notes (whether or not having identical terms and provisions) shall be entitled: (i) if the Specified Currency is U.S. dollars, to receive U.S. dollar payments by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the United States, but only if appropriate wire transfer instructions have been received in writing by the Trustee not later than the Record Date immediately preceding the applicable Interest Payment Date, and (ii) if the Specified Currency is other than U.S. dollars, to receive by wire transfer of immediately available funds to an account maintained by the payee with a bank located in a jurisdiction in which payment in such Specified Currency is then lawful. Within ten days following each Record Date, the Trustee will inform the Company of the total amount of the interest payments to be made by the Company on the next succeeding Interest Payment Date and the currencies or currency units in which such interest payments are to be made. The Trustee will provide monthly to the Company a list of the principal and interest to be paid on Certificated Notes maturing in the next succeeding month. Procedure for Rate Setting and Posting: The Company and the Agents will discuss from time to time the - -------- aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Certificated Notes that may be sold as a result of the solicitation or offers by the Agents. If the Company decides to establish prices of (including the currency of issuance), and rates borne by, any Certificated Notes to be sold (the establishment 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 of Offers: Unless otherwise agreed between the Company and such Agent, any Agent - -------------------- which receives an offer to purchase Certificated Notes will promptly advise the Company of each such offer other than offers rejected by such Agent as provided below. The Company will have the sole right to accept any such offer to purchase Certificated Notes. The Company may reject any such offer in whole or in part. Unless otherwise agreed between the Company and any Agent, each Agent may, in its discretion reasonably exercised, reject any offer to purchase Certificated Notes received by it in whole or in part. Preparation of Pricing Supplement: If any offer to purchase a Certificated Note is accepted by or on - ---------------------------------- behalf of the Company, the Company and the Guarantor, with the approval of the Agents, will prepare a Pricing Supplement reflecting the terms of such Certificated Note and will arrange to have requisite copies of such Pricing Supplement filed with the Commission, in each case no later than the second Business Day after the earlier of the determination of the offering price or the date it is first used and will supply at least ten copies thereof (or additional copies if requested) to the Agents and one copy to the Trustee no later than 11:00 A.M., New York City time, on the Business Day following the date of acceptance at the following applicable address (unless otherwise specified in the applicable trading confirmation): if to Lehman Brothers Inc., to Lehman Brothers Inc., 3 World Financial Center, 9th Floor, New York, New York 10285, attention Medium-Term Note Desk, telephone no. (212) 526-8400, telecopier no. (212) 526-1532; if to Banc of America Securities LLC to The Bank of New York, One Wall Street, 3rd Floor, Dealers Clearance, Window B, A/C Banc of America Securities LLC; if to Chase Securities Inc., to Chase Securities Inc., 270 Park Avenue, 8th Floor, New York, New York 10017, attention Medium-Term Note Desk, telecopier no. (212) 834-6081; if to Deutsche Bank Alex. Brown Inc. to Deutsche Bank Alex. Brown Inc., 31 West 52nd Street, New York, New York 10019, attention of Erich Mauff, telephone no. (212) 469-7859, telecopier no. (212) 469-7875, with a copy to Deutsche Bank Alex. Brown Inc., c/o ADP Prospectus, 536 Broadhollow Road, Melville, NY 11747, attention of Krista Zeoli, telephone no. (516) 254-7107, telecopier no. (516) 254-7134; if to Goldman, Sachs & Co., to Goldman, Sachs & Co., 85 Broad Street, 27th Floor, New York, New York 10004, attention of Ben Smilchensky, telephone no. (212) 902-1482, telecopier no. (212) 902-0658; if to Merrill Lynch, Pierce, Fenner & Smith Incorporated, to Merrill Lynch Production Technologies, by e-mail to mtnsuppl@na2.us.ml.com, 44B Colonial Drive, Piscataway, New Jersey 08854, attention Final Prospectus Unit/Nachman Kimmerling, telephone no. (732) 885-2768, telecopier no. (732) 885-2774, with a copy to Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial Center, 15th Floor, New York, New York 10080, attention MTN Product Management, telephone no. (212) 449-7476, telecopier no. (212) 449-2234; if to Morgan Stanley & Co. Incorporated, to Morgan Stanley & Co. Incorporated, 1585 Broadway, 2nd Floor, New York, New York 10036, attention Medium-Term Note Trading Desk, Carlos Cabrera, telephone no. (212) 761-4000, telecopier no. (212) 761-0780; if to Salomon Smith Barney Inc., to Salomon Smith Barney Inc., Brooklyn Army Terminal, 140 58th Street, 5th Floor, Brooklyn, NY 11220, attention of Dianne Graham, telephone no. (718) 765-6736, telecopier no. (718) 765-6734; if to Countrywide Securities Corporation, to Countrywide Securities Corporation, 4500 Park Granada, CH-143, Calabasas, California 91302, attention of Tom O'Hallaron, telephone no. (818) 225-3297, or, if after 5:00 p.m., (818) 225-3201, telecopier no. (818) 225-4014 ; and if to the Trustee, to The Bank of New York, 101 Barclay Street, New York, New York 10286, attention Corporate Trust Office. Such Agent will cause a Pricing Supplement to be delivered to the purchaser of the Certificated Note. In all respects, the Company and the Guarantor will prepare and file each such Pricing Supplement in accordance with Rule 424 under the Act. In each instance that a Pricing Supplement is prepared, each Agent will affix the Pricing Supplement to Prospectuses prior to their use; provided, however, that pursuant to Rule 434 ("Rule 434") under the Securities Act of 1933, as amended, the Pricing Supplement may be delivered separately from the Prospectuses. Outdated Pricing Supplements, and the Prospectuses to which they are attached or relate (other than those retained for files), will be destroyed. Suspension of Solicitation; Amendment or Supplement: The Company reserves the right, in its sole discretion, to instruct - ----------------------- the Agents to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase Certificated Notes. As soon as practicable, but in no event later than one Business Day after receipt of instructions from the Company, the Agents will suspend solicitation of offers to purchase Certificated Notes from the Company until such time as the Company has advised them that such solicitation may be resumed. If the Company or the Guarantor decides to amend or supplement the Registration Statement or the Prospectus relating to the Notes (except in the case of a Pricing Supplement to the Prospectus), the Company or the Guarantor, as the case may be, will promptly advise the Agents and the Trustee and will furnish the Agents and the Trustee with the proposed amendment or supplement in accordance with the terms of the Agency Agreement. The Company or the Guarantor will mail or transmit to the Commission for filing therewith any supplement to the Prospectus relating to the Notes, provide the Agents with copies of any supplement, and confirm to the Agents that such supplement has been filed with the Commission. In the event that at the time the Company suspends solicitation of offers to purchase Certificated Notes there shall be any outstanding offers to purchase Certificated Notes that have been accepted by the Company but for which settlement has not yet occurred, the Company will promptly advise the Agents and the Trustee whether such sales may be settled and whether copies of the Prospectus as supplemented to the time of the suspension may be delivered in connection with the settlement of such sales. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such sales may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus: Each Agent shall, for each offer to purchase a Certificated Note that - ----------------------- is solicited by such Agent and accepted by the Company, deliver a copy of the Prospectus as most recently amended or supplemented (including the applicable Pricing Supplement which, pursuant to Rule 434, may be delivered separately from the Prospectus) with the earlier of the delivery of the confirmation of sale or the Certificated Note to the purchaser thereof or such purchaser's agent. Confirmation: For each offer to purchase a Certificated Note solicited by any Agent and accepted by the Company, such 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 Settlement Date with respect to any offer to purchase - ---------- Certificated Notes accepted by or on behalf of the Company will be a date on or before the third Business Day next succeeding the date of acceptance unless otherwise agreed by the purchaser and the Company and shall be specified upon acceptance of such offer. The Company will instruct the Trustee to effect delivery of each Certificated Note no later than 1:00 p.m., New York City time, on the Settlement Date to such Agent for delivery to the purchaser. Details for Settlement: For each offer to purchase a Certificated Note received by any Agent and accepted pursuant to the terms of the Agency Agreement, such Agent will provide (unless provided by the purchaser directly to the Company) by telephone the following information (to the extent applicable) to the Company: 1. Exact name of Holder. 2. Exact address of Holder and address for payment of principal, premium, if any, and interest. 3. Taxpayer identification number of Holder (if available). 4. Principal amount of the Note. 5. Specified Currency. 6. Interest rate or interest rate basis. 7. Base Rate(s), Index Maturity, Initial Interest Rate, Maximum Interest Rate, Minimum Interest Rate, Interest Reset Dates, Interest Payment Dates, Calculation Dates, Interest Reset Dates and Spread and/or Spread Multiplier (as each such term is defined in the Prospectus). 8. Issue price of Note and proceeds to Company. 9. Settlement Date. 10. Stated Maturity Date. 11. Redemption and/or repayment provisions, if any. 12. Agent's commission to be paid in the form of a discount upon settlement. 13. Other relevant terms, including any reset and/or extension provisions. Such Agent will advise the Company of the foregoing information (unless provided by the purchaser directly to the Company) for each offer to purchase a Certificated Note solicited by such Agent and accepted by the Company in time for the Trustee to prepare and authenticate the required Certificated Note. Before accepting any offer to purchase a Certificated Note to be settled in less than three Business Days, the Company shall verify that the Trustee will have adequate time to prepare and authenticate such Certificated Note. After receiving from such Agent the details for each offer to purchase a Certificated Note, the Company will, after recording the details and any necessary calculations, provide appropriate documentation to the Trustee, including the information provided by such Agent necessary for the preparation and authentication of such Certificated Note. Prior to preparing the Certificated Note for delivery (but in any case no later than 11:00 a.m., New York City time, on the Business Day next preceding the Settlement Date therefor), the Trustee will confirm the details of such issue with such Agent by telephone. Note Deliveries and Cash Payment: Upon receipt of appropriate documentation and instructions, the Company will cause the Trustee to prepare and authenticate the pre-printed 4-ply Certificated Note packet containing the following documents in forms approved by the Company, the Agents and the Trustee: 1. Certificated Note with customer confirmation. 2. Stub 1--For the applicable Agent. 3. Stub 2--For the Company. 4. Stub 3--For the Trustee. Each Certificated Note shall be authenticated on or before the Settlement Date therefor. The Trustee will authenticate each Certificated Note and deliver it to such Agent (and deliver the stubs as indicated above), all in accordance with written instructions (which may be in the form of facsimile transmission) from the Company. Delivery by the Trustee of each Certificated Note will be made against receipt by the Company by 1:00 p.m., New York City time, on the Settlement Date in immediately available funds of an amount equal to the issue price of such Certificated Note or the U.S. dollar equivalent of the issue price of such Note as agreed between the Company and such Agent, unless otherwise agreed between the Company and such Agent, less such Agent's commission. Upon verification by such Agent that a Note has been prepared and properly authenticated by the Trustee and registered in the name of the purchaser in the proper principal amount and that the related Guarantee has been duly endorsed thereon, payment will be made to the Company by such Agent the same day in immediately available funds in the Specified Currency. Such payment shall be made only upon prior receipt by such Agent of immediately available funds from or on behalf of the purchaser in the Specified Currency unless such Agent decides, at its option, to advance its own funds for such payment against subsequent receipt of funds from the purchaser. Upon delivery of a Certificated Note to such Agent, such Agent shall promptly deliver such Certificated Note to the purchaser. In the event any Certificated Note is incorrectly prepared, the Trustee shall promptly issue a replacement Certificated Note in exchange for the incorrectly prepared Certificated Note. Failure to Settle: If any Agent, at its own option, has advanced its own funds for - ----------------- payment against subsequent receipt of funds from the purchaser, and if the purchaser shall fail to make payment for the Certificated Note on the Settlement Date therefor, such Agent will promptly notify the Trustee and the Company by telephone, promptly confirmed in writing (but no later than the next Business Day). In such event, the Company shall promptly provide the Trustee with appropriate documentation and instructions consistent with these procedures for the return of the Certificated Note to the Trustee and such Agent will promptly return the Certificated Note to the Trustee. Upon confirmation (i) from the Trustee in writing (which may be given by telex or telecopy) that the Trustee has received the Certificated Note and (ii) from such Agent in writing (which may be given by telex or telecopy) that such Agent has not received payment from the purchaser (the matters referred to in clauses (i) and (ii) are referred to hereinafter as the "Confirmations"), the Company will promptly pay to such Agent an amount in immediately available funds equal to the amount previously paid by such Agent in respect of such Certificated Note. Assuming receipt of the Certificated Note by the Trustee and of the Confirmations by the Company, such payment will be made on the Settlement Date, if reasonably practicable, and in any event not later than the Business Day following the date of receipt of the Certificated Note and Confirmations. If a purchaser shall fail to make payment for the Certificated Note for any reason other than the failure of such Agent to provide the necessary information to the Company as described above for settlement or to provide a confirmation to the purchaser within a reasonable period of time as described above or otherwise to satisfy its obligation hereunder or in the Agency Agreement, and if such Agent shall have otherwise complied with its obligations hereunder and in the Agency Agreement, the Company will reimburse such Agent on an equitable basis for its loss of the use of funds during the period when they were credited to the account of the Company. Immediately upon receipt of the Certificated Note in respect of which the failure occurred, the Trustee will void said Certificated Note, make appropriate entries in its records and destroy the Certificated Note; and upon such action, the Certificated Note will be deemed not to have been issued, authenticated and delivered. Trustee Not to Risk Funds: Nothing herein shall be deemed to require the Trustee to risk or - ---------- expend its own funds in connection with any payment to the Company, or any Agent or the purchaser, it being understood by all parties that payments made by the Trustee to either the Company or any Agent shall be made only to the extent that funds are provided to the Trustee for such purpose. Authenticity of Signatures: The Company will cause the Trustee and the Guarantor to furnish each - --------------------------- Agent from time to time with the specimen signatures of the officers, employees or agents who have been authorized to authenticate Certificated Notes or execute the related Guarantee, as the case may be, but each Agent will have no obligation or liability to the Company, the Guarantor or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company, the Guarantor or the Trustee on any Certificated Note. Payment of Expenses: Each Agent shall forward to the Company and the Guarantor, from time - ------------------- to time (but not more often than monthly), a statement of the out-of-pocket expenses incurred by such Agent during the related period which are reimbursable to it pursuant to the terms of the Agency Agreement. The Company and the Guarantor will promptly remit payment to such Agent. Advertising Costs: The Company will determine with each Agent the amount of advertising - ----- that may be appropriate in soliciting offers to purchase the Notes. Advertising expenses will be paid by the Company and the Guarantor. PART II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES In connection with the qualification of Book-Entry Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under a Letter of Representations from the Company, the Guarantor and the Trustee to The Depository Trust Company ("DTC") of even date herewith and a Medium-Term Note Certificate Agreement between the Trustee and DTC, dated April 14, 1989 and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: On any Settlement Date (as defined under "Settlement" below) for one - -------- or more Fixed Rate Book-Entry Notes, the Company will issue a single global security in fully registered form without coupons (a "Global Security") representing up to U.S. $400,000,000 principal amount of all of such Notes that have the same Issue Date, Specified Currency, Interest Rate, Stated Maturity Date, redemption and/or repayment provisions and Interest Payment Dates. Similarly, on any Settlement Date for one or more Floating Rate Book-Entry Notes, the Company will issue a single Global Security representing up to U.S. $400,000,000 principal amount of all of such Notes that have the same Issue Date, Specified Currency, Base Rate(s), Index Maturity, Interest Reset Dates, Spread and/or Spread Multiplier (if any), Initial Interest Rate, Interest Payment Dates, Minimum Interest Rate (if any), Maximum Interest Rate (if any), Stated Maturity Date and redemption and/or repayment provisions. Each Global Security will be dated and issued as of the date of its authentication by the Trustee. Each Global Security will bear an "Interest Accrual Date", which will be (i) with respect to an original Global Security (or any portion thereof), its original issuance date and (ii) with respect to any Global Security (or portion thereof) issued subsequently upon exchange of a Global Security or in lieu of a destroyed, lost or stolen Global Security, the most recent Interest Payment Date to which interest has been paid or duly provided for on the predecessor Global Security or Securities (or if no such payment or provision has been made, the original issuance date of the predecessor Global Security), regardless of the date of authentication of such subsequently issued Global Security. No Global Security will represent any Certificated Note. Price to Public: Each Book-Entry Note will be issued at the percentage of principal - --------------- amount specified in the Prospectus. Identification Numbers: The Company will arrange, on or prior to commencement of a program - ----------------------- for the offering of Book-Entry Notes, with the CUSIP Service Bureau of Standard & Poor's Ratings Group (the "CUSIP Service Bureau") for the reservation of a series of CUSIP numbers (including tranche numbers), consisting of approximately 900 CUSIP numbers and relating to Global Securities representing the Book-Entry Notes. The Trustee has or will obtain from the CUSIP Service Bureau a written list of such series of reserved CUSIP numbers and will deliver to the Company and DTC such written list of 900 CUSIP numbers of such series. 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. The Trustee will notify the Company at any time when fewer than 100 of the reserved CUSIP numbers remain unassigned to Global Securities, and if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Global Securities representing Book-Entry Notes. Upon obtaining such additional CUSIP numbers, the Trustee shall deliver such additional CUSIP numbers to the Company and DTC. Registration: Each Global Security will be registered in the name of Cede & Co., as - ------------ nominee for DTC, on the Securities Register maintained under the Indenture governing such Global Security. 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 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 Note in the account of such Participants. The ownership interest of such beneficial owner in such 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: Transfer 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. Consolidation and Exchange: The Trustee may deliver to DTC and the CUSIP Service Bureau at any - -------------------------- time a written notice of consolidation specifying (i) the CUSIP numbers of two or more outstanding Global Securities that represent (A) Fixed Rate Book-Entry Notes having the same Issue Date, Specified Currency, Interest Rate, Stated Maturity Date, redemption and/or repayment provisions (if any) and Interest Payment Dates and with respect to which interest has been paid to the same date or (B) Floating Rate Book-Entry Notes having the same Issue Date, Specified Currency, Base Rate, Index Maturity, Interest Reset Dates, Spread and/or Spread Multiplier (if any), Initial Interest Rate, Interest Payment Dates, Minimum Interest Rate (if any), Maximum Interest Rate (if any), redemption and/or repayment provisions (if any) and Stated Maturity Date and with respect to 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) a new CUSIP number, obtained from the Company, to be assigned to such replacement Global Security. 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 the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Securities to be exchanged will no longer be valid. On the specified exchange date, the Trustee will exchange such Global Securities for a single Global Security bearing the new CUSIP number and a new Interest Accrual Date, and the CUSIP numbers of the exchanged Global Securities will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. Notwithstanding the foregoing, if the Global Securities to be exchanged exceed U.S. $400,000,000 in aggregate principal amount, one Global Security will be authenticated and issued to represent each U.S. $400,000,000 of principal amount 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 on a date nine months or more after - ---------- the Settlement Date for such Note. Notice of Redemption Date: The Trustee will notify DTC not more than 60 but not less than 30 days prior to each redemption date, if any, with respect to a Book-Entry Note, of the CUSIP number of such Note, the redemption date, the redemption price and the principal amount of such Book-Entry Note to be redeemed. Denominations: Book-Entry Notes will be issued in principal amounts of U.S. $1,000 - ------------- or any amount in excess thereof that is an integral multiple of U.S. $1,000. Global Securities will be denominated in principal amounts not in excess of U.S. $400,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of U.S. $400,000,000 would, but for the preceding sentence, be represented by a single Global Security, then one Global Security will be issued to represent each U.S. $400,000,000 principal amount of such Book-Entry Note or Notes and an additional Global Security will be 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 on each Book-Entry Note will accrue from the - -------- ------- Interest Accrual Date of the Global Security representing such Note. Except as set forth in the underlying Global Security, each Book-Entry Note which is a Fixed Rate Note will bear interest at the annual rate stated in such Global Security, payable semiannually on January 15 and July 15 of each year (each, an "Interest Payment Date") and on the Maturity Date, and each Book-Entry Note which is a Floating Rate Note will bear interest as determined in the manner set forth in such Global Security, payable on the dates set forth on such Global Security. Except as set forth in the underlying Global Security, interest (including payments for partial periods) on Fixed Rate Notes will be calculated on the basis of a 360-day year of twelve 30-day months. Except as set forth in the underlying Global Security, interest on Book-Entry Notes which are Floating Rate Notes will be determined in the manner agreed upon by the Company and the purchaser thereof in accordance with the provisions of the Prospectus. Except as set forth in the underlying Global Security, the "Record Date" with respect to any Interest Payment Date for Book-Entry Notes which are Floating Rate Notes shall be the date 15 calendar days immediately preceding such Interest Payment Date, and for Fixed Rate Notes shall be the December 31 or June 30 next preceding such Interest Payment Date, whether or not such date shall be a Business Day. The first payment of interest on any Book-Entry Note originally issued between a Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Record Date to the Holder on such next succeeding Record Date. Notwithstanding the record date provisions above, interest payable on the Maturity Date will be payable to the person to whom principal shall be payable. Standard & Poor's Ratings Group 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 weekly bond report published by Standard & Poor's Ratings Group. On the first Business Day of January, April, July and October of each year, the Trustee will deliver to the Company and DTC a written list of Record Dates and Interest Payment Dates that will occur with respect to Floating Rate Book-Entry Notes during the six-month period beginning on such first Business Day. Promptly after each Interest Determination Date (as defined in the Prospectus) for Floating Rate Notes, the Company will notify the Trustee, and the Trustee in turn will notify Standard & Poor's Ratings Group, of the interest rates determined on such Interest Determination Date. Payments of Principal and Interest: Payments of Interest Only. Promptly after each Record Date, the - ---------------------------------- ------------------------- Trustee will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Global Security on the following Interest Payment Date (other than an Interest Payment Date coinciding with a Maturity Date) 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 daily 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 on the Maturity Date), 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 first 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 with a Maturity Date in the following month. The Company, the Trustee 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 Date of such Global Security. The Company will pay to the Trustee, as the paying agent, the principal amount of such Global Security, together with interest due on such Maturity Date. The Trustee will pay such amount to DTC at the time and in the manner set forth below under "Manner of Payment". Promptly after payment to DTC of the principal and interest due on the Maturity Date of such Global Security, the Trustee will cancel such Global Security and deliver it to the Company with an appropriate debit advice. On the first Business Day of each month, the Trustee will prepare a written statement indicating the total principal amount of outstanding Global Securities for which it serves as trustee 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 on the Maturity Date shall be paid by the Company to the Trustee in funds available for use by the Trustee as of 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 to withdraw funds from an account maintained by the Company at the Trustee. For maturity, redemption, repayment or any other principal payments: prior to 10:00 A.M. (New York City time) on such date or as soon as possible thereafter, the Trustee will make such payments to DTC in same day funds in accordance with DTC's Same Day Funds Settlement Paying Agent Operating Procedures. For interest payments: the Trustee will make such payments to DTC in accordance with existing arrangements between DTC and the Trustee. DTC will allocate such payments to its participants in accordance with its existing operating procedures. Neither the Company (either as Issuer or as Paying Agent), the Trustee or any Agent 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 Setting and Posting: The Company and the Agents will discuss from time to time the - ----------- aggregate principal amount 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 or offers by the Agents. If the Company decides to establish prices of (including the currency of issuance), and rates borne by, any Book-Entry Notes to be sold (the establishment 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 of Offers: Unless otherwise agreed between the Company and such Agent, any Agent - --------- which receives an offer to purchase Book-Entry Notes will promptly advise the Company of each such offer other than offers rejected by such Agent as provided below. The Company will have the sole right to accept any such offer to purchase Book-Entry Notes. The Company may reject any such offer in whole or in part. Unless otherwise agreed between the Company and any Agent, each Agent may, in its discretion reasonably exercised, reject any offer to purchase Book-Entry Notes received by it in whole or in part. Preparation of Pricing Supplement: If any offer to purchase a Book- Entry Note is accepted by or on - ---------------------------------- behalf of the Company, the Company and the Guarantor, with the approval of the Agents, will prepare a Pricing Supplement reflecting the terms of such Book-Entry Note and will arrange to have requisite copies of such Pricing Supplement filed with the Commission, in each case no later than the second Business Day after the earlier of the determination of the offering price or the date it is first used and will supply at least ten copies thereof (or additional copies if requested) to the Agents and one copy to the Trustee no later than 11:00 A.M., New York City time, on the Business Day following the date of acceptance at the following applicable address (unless otherwise specified in the applicable trading confirmation): if to Lehman Brothers Inc., to Lehman Brothers Inc., 3 World Financial Center, 9th Floor, New York, New York 10285, attention Medium-Term Note Desk, telephone no. (212) 526-8400, telecopier no. (212) 526-1532; if to Banc of America Securities LLC, to The Bank of New York, One Wall Street, 3rd Floor, Dealers Clearance, Window B, A/C Banc of America Securities LLC; if to Chase Securities Inc., to Chase Securities Inc., 270 Park Avenue, 8th Floor, New York, New York 10017, attention Medium-Term Note Desk, telecopier no. (212) 834-6081; if to Deutsche Bank Alex. Brown Inc. to Deutsche Bank Alex. Brown Inc., 31 West 52nd Street, New York, New York 10019, attention of Erich Mauff, telephone no. (212) 469-7859, telecopier no. (212) 469-7875, with a copy to Deutsche Bank Alex. Brown Inc., c/o ADP Prospectus, 536 Broadhollow Road, Melville, NY 11747, attention of Krista Zeoli, telephone no. (516) 254-7107, telecopier no. (516) 254-7134; if to Goldman, Sachs & Co., to Goldman, Sachs & Co., 85 Broad Street, 27th Floor, New York, New York 10004, attention of Ben Smilchensky, telephone no. (212) 902-1482, telecopier number (212) 902-0658; if to Merrill Lynch, Pierce, Fenner & Smith Incorporated, to Merrill Lynch Production Technologies, by e-mail to mtnsuppl@na2.us.ml.com, 44B Colonial Drive, Piscataway, New Jersey 08854, attention of Nachman Kimmerling/Final Prospectus Unit, telephone no. (732) 885-2768, telecopier no. (732) 885-2774, with a copy to Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World Financial Center, 15th Floor, New York, New York 10080, attention MTN Product Management, telephone no. (212) 449-7476, telecopier no. (212)449-2234; if to Morgan Stanley & Co. Incorporated, to Morgan Stanley & Co. Incorporated, 1585 Broadway, 2nd Floor, New York, New York 10036, attention Medium-Term Note Trading Desk, Carlos Cabrera, telephone no. (212) 761-4000, telecopier no. (212) 761-0780; if to Salomon Smith Barney Inc., to Salomon Smith Barney Inc., Brooklyn Army Terminal, 140 58th Street, 5th Floor, Brooklyn, NY 11220, attention of Dianne Graham, telephone no. (718) 765-6736, telecopier no. (718) 765-6734; if to Countrywide Securities Corporation, to Countrywide Securities Corporation, 4500 Park Granada, CH-143, Calabasas, California 91302, attention of Tom O'Hallaron, telephone no. (818) 225-3297, or, if after 5:00 p.m., (818) 225-3201, telecopier no. (818) 225-4014; and if to the Trustee, to The Bank of New York, 101 Barclay Street, New York, New York 10286, attention Corporate Trust Office. Such Agent will cause a Pricing Supplement to be delivered to the purchaser of the Book-Entry Note. In all respects, the Company and the Guarantor will prepare and file each such Pricing Supplement in accordance with Rule 424 under the Act. In each instance that a Pricing Supplement is prepared, each Agent will affix the Pricing Supplement to Prospectuses prior to their use; provided, however, that pursuant to Rule 434, the Pricing Supplement may be delivered separately from the Prospectuses. Outdated Pricing Supplements, and the Prospectuses to which they are attached or relate (other than those retained for files), will be destroyed. Suspension of Solicitation; Amendment or Supplement: The Company reserves the right, in its sole discretion, to instruct - ----------------------- the Agents to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase Book-Entry Notes. As soon as practicable, but in no event later than one Business Day after receipt of instructions from the Company, the Agents will suspend solicitation of offers to purchase Book-Entry Notes from the Company until such time as the Company has advised them that such solicitation may be resumed. If the Company or the Guarantor decides to amend or supplement the Registration Statement or the Prospectus relating to the Notes (except in the case of a Pricing Supplement to the Prospectus), the Company or the Guarantor, as the case may be, will promptly advise the Agents and the Trustee and will furnish the Agents and the Trustee with the proposed amendment or supplement in accordance with the terms of the Agency Agreement. The Company or the Guarantor will mail or transmit to the Commission for filing therewith any supplement to the Prospectus relating to the Notes, provide the Agents with copies of any supplement, and confirm to the Agents that such supplement has been filed with the Commission. In the event that at the time the Company suspends solicitation of offers to purchase Book-Entry Notes there shall be any outstanding offers to purchase Book-Entry Notes that have been accepted by the Company but for which settlement has not yet occurred, the Company will promptly advise the Agents and the Trustee whether such sales may be settled and whether copies of the Prospectus as supplemented to the time of the suspension may be delivered in connection with the settlement of such sales. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such sales may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus: Each Agent shall, for each offer to purchase a Book-Entry Note that - ---------- is solicited by such Agent and accepted by the Company, deliver a copy of the Prospectus as most recently amended or supplemented (including the applicable Pricing Supplement which, pursuant to Rule 434, may be delivered separately from the Prospectus) with the earlier of the delivery of the confirmation of sale or the Book-Entry Note to the purchaser thereof or such purchaser's agent. Confirmation: Such Agent will confirm the purchase of such Note to the purchaser either by transmitting to the Participants with respect to such Note a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. 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 Note shall constitute "settlement" with respect to such Note. The "Settlement Date" with respect to any offer to purchase Book-Entry Notes accepted by or on behalf of the Company will be a date on or before the third Business Day next succeeding the date of acceptance unless otherwise agreed by the purchaser and the Company and shall be specified upon acceptance of such offer. Settlement Settlement Procedures with regard to each Book-Entry - ---------- Procedures: Note sold by the Company through an Agent, as agent, shall be as - ---------- follows: A. Such Agent will advise the Company by telephone of the following settlement information: 1. Principal amount. 2. Specified Currency. 3. Stated 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, Base Rate, Index Maturity, Initial Interest Rate, Maximum Interest Rate, Minimum Interest Rate, Interest Reset Dates, Interest Payment Dates, Calculation Dates, Interest Reset Dates and Spread and/or Spread Multiplier. 5. Settlement Date. 6. Redemption and/or repayment provisions, if any. 7. Estate Option, if applicable. 8. Agent's commission, determined as provided in the Agency Agreement between the Company and such Agent. 9. The DTC Participant account number of such Agent. 10. Taxpayer identification number of beneficial owner (if available). 11. Issue price of Book-Entry Note and proceeds to the Company. B. The Trustee will assign a CUSIP number to the Global Security representing such Book-Entry Note and will then advise the Company of such CUSIP number. The Company will then advise the Trustee by electronic transmission (confirmed by telephone) of the information set forth in Settlement Procedure "A" above and the name of such Agent. Each such communication by the Company shall constitute a representation and warranty by the Company to the Trustee and each Agent that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company, (ii) such Note, and the Global Security representing such Note, will conform with the terms of the Indenture pursuant to which such Note and Global Security are issued and (iii) upon authentication and delivery of such Global Security, the aggregate initial offering price of all Notes issued under the Indenture will not exceed $6,000,000,000 (except for Book-Entry Notes represented by Global Securities authenticated and delivered in exchange for or in lieu of Global Securities pursuant to the Indenture and except for Certificated Notes authenticated and delivered upon registration of transfer of, in exchange for, or in lieu of Certificated Notes pursuant to the Indenture). C. The Trustee will enter a pending deposit message through DTC's Participant Terminal System, providing the following settlement information to DTC, such Agent, Standard & Poor's Ratings Group and, upon request, the Trustee under the Indenture pursuant to which such Note is to be issued: 1. The information set forth in Settlement Procedure "A". 2. Identification as a Fixed Rate Book-Entry Note or a Floating Rate Book-Entry Note. 3. Initial Interest Payment Date for such Note and amount of interest payable on such Interest Payment Date. 4. Frequency of interest payments (monthly, semiannually, quarterly, etc.). 5. CUSIP number of Global Security representing such Note. 6. Whether such Global Security will represent any other Book-Entry Note (to the extent known at such time). D. The Trustee will complete the Global Security, the form of which was previously approved by the Company, the Agents and the Trustee. E. The Trustee, as Trustee, will authenticate the Global Security representing such Note. F. DTC will credit such Note to the Trustee's participant account at DTC. G. The Trustee will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit such Note to the Trustee's participant account and credit such Note to such Agent's participant account and (ii) debit such Agent's settlement account and credit the Trustee's settlement account for an amount equal to the price of such Note less such Agent's commission. The entry of such a deliver order shall constitute a representation and warranty by the Trustee to DTC that (i) the Global Security representing such Book-Entry Note has been issued and authenticated and (ii) the Trustee is holding such Global Security pursuant to the Certificate Agreement. H. Such Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to such Agent's participant account and credit such Note to the participant accounts of the Participants with respect to such Note and (ii) to debit the settlement accounts of such Participants and credit the settlement account of such Agent for an amount equal to the price of such 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 credit to an account of the Company maintained at the Trustee funds available for immediate use in the amount transferred to the Trustee in accordance with Settlement Procedure "G". K. The Trustee will hold the Global Security pursuant to the Certificate Agreement and will send a photocopy of such Global Security to the Company by first-class mail. Upon written request the Trustee will deliver a photocopy of such Global Security to such Agent. Periodically, the Trustee will send to the Company a statement setting forth the principal amount of Notes Outstanding as of that date and setting forth a brief description of any sales of which the Company has advised the Trustee but which have not yet been settled. L. As set forth in "Delivery of Prospectus" above, such Agent will deliver to the purchaser a copy of the most recent Prospectus applicable to the Book-Entry Note with or prior to any written offer of Book-Entry Notes and the confirmation and payment by the purchaser of such Note. Such Agent will confirm the purchase of such Note to the purchaser either by transmitting to the Participants with respect to such Note a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. Settlement Procedures Timetable: For offers to purchase Book-Entry Notes solicited by an Agent, as agent, and accepted by the Company for settlement on the first Business Day after the sale date, Settlement Procedures "A" through "L" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below: Settlement Procedure Time --------- ---- A-B 11:00 A.M. on the sale date C 2:00 P.M. on the sale date D 3:00 P.M. on day before Settlement Date 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 4:45 P.M. on Settlement Date J-L 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 2:00 P.M., as the case may be, on the first Business Day after the sale date. 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 11:00 A.M. and 12:00 Noon, respectively, on the second Business Day before the Settlement Date. Settlement Procedure "I" is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the Settlement Date. Failure to Settle: If the Trustee fails to enter an SDFS deliver order with respect to a - ----------------- Book-Entry Note pursuant to Settlement Procedure "G", the Trustee may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such 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 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 mark such Global Security "canceled", make appropriate entries in the Trustee's records and send such canceled Global Security to the Company. 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 Global Security for two Global Securities, one of which shall represent such Book-Entry Note or Notes and shall be canceled immediately after issuance and 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 Agent for such Note may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "H" and "G", respectively. Thereafter, the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. 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 Procedures "D" and "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 Not to Risk Funds: Nothing herein shall be deemed to require the Trustee to risk or - ---------- expend its own funds in connection with any payment to the Company, or any Agent or the purchaser, it being understood by all parties that payments made by the Trustee to either the Company or any Agent shall be made only to the extent that funds are provided to the Trustee for such purpose. Authenticity of Signatures: The Company will cause the Trustee and the Guarantor to furnish each - -------------------------- Agent from time to time with the specimen signatures of the officers, employees or agents who have been authorized to authenticate Notes or execute the related Guarantee, but each Agent will have no obligation or liability to the Company, the Guarantor or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company, the Guarantor or the Trustee on any Note. Payment of Expenses: Each Agent shall forward to the Company and the Guarantor, from time - ------------------- to time (but not more often than monthly), a statement of the out-of-pocket expenses incurred by such Agent during the related period which are reimbursable to it pursuant to the terms of the Agency Agreement. The Company and the Guarantor will promptly remit payment to such Agent. Advertising Costs: The Company will determine with each Agent the amount of advertising - ------------------ that maybe appropriate in soliciting offers to purchase the Notes. Advertising expenses will be paid by the Company and the Guarantor. EXHIBIT B Countrywide Home Loans, Inc. U.S. $6,000,000,000 Medium-Term Notes, Series J Due Nine Months or More From Date of Issue Payment of Principal, Premium, if any, and Interest Fully and Unconditionally Guaranteed by Countrywide Credit Industries, Inc. TERMS AGREEMENT _________________, 20__ Countrywide Home Loans, Inc. 4500 Park Granada Calabasas, California 91302 Attention: Corporate Counsel Subject in all respects to the terms and conditions of the Selling Agency Agreement dated February [ ], 2001 among Lehman Brothers Inc., Banc of America Securities LLC, Chase Securities Inc., Deutsche Bank Alex. Brown Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc. and Countrywide Securities Corporation and you (the "Agreement"), the undersigned agrees to purchase the following Medium-Term Notes, Series J (the "Notes"), of Countrywide Home Loans, Inc.: Aggregate Principal Amount: Currency or Currency Unit: Interest Rate or Base Rate(s): Spread: Spread Multiplier: Stated Maturity Date: Interest Payment Dates: Record Dates: Purchase Price: % of Principal Amount [plus accrued interest, if any, from _______________, 20 __] Purchase Date and Time: Certificated or Book-Entry Form: Place for Delivery of Notes and Payment Therefor: Method of Payment: Modification, if any, in the requirements to deliver the documents specified in Section 6(b) of the Agreement: Period during which additional Notes may not be sold pursuant to Section 4(l) of the Agreement: Default provisions, if any: Other terms: [PURCHASERS] By: _______________________________ Accepted: COUNTRYWIDE HOME LOANS, INC. By: ______________________________ Title: COUNTRYWIDE CREDIT INDUSTRIES, INC. By: ______________________________ Title: EX-4.14 3 0003.txt FORM OF FIXED RATE MEDIUM TERM NOTE EXHIBIT 4.14 FORM OF FIXED RATE MEDIUM TERM NOTE COUNTRYWIDE HOME LOANS, INC. (CUSIP No. ) REGISTERED PRINCIPAL AMOUNT No. FX-$ MEDIUM-TERM NOTE, SERIES J (Fixed Rate) Due Nine Months or More From Date of Issue Payment of the Principal, Premium, if any, and Interest on this Note is Unconditionally Guaranteed by Countrywide Credit Industries, Inc. IF THE HOLDER OF THIS NOTE IS THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY, THIS NOTE IS A GLOBAL NOTE AND THE FOLLOWING LEGEND APPLIES: UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH NOTE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. ISSUE PRICE: INTEREST RATE: ORIGINAL ISSUE DATE: STATED MATURITY DATE: PRINCIPAL AMOUNT: INTEREST PAYMENT DATES (IF OTHER THAN JANUARY 15 AND JULY 15): SPECIFIED CURRENCY: RECORD DATES (IF OTHER THAN DECEMBER 31 AND JUNE 30): MINIMUM DENOMINATION: EXCHANGE RATE AGENT: OTHER/ADDITIONAL TERMS: OPTION TO RECEIVE PAYMENT IN U.S. DOLLARS: |_| NO |_| YES REDEMPTION: |_| NO |_| YES INITIAL REDEMPTION DATE: INITIAL REDEMPTION PERCENTAGE: ANNUAL REDEMPTION PERCENTAGE REDUCTION: REPAYMENT: |_| NO |_| YES OPTIONAL REPAYMENT DATE(S): COUNTRYWIDE HOME LOANS, INC., a New York corporation (the "Company"), for value received, hereby promises to pay to _________________________________________, or registered assignees, the principal sum of _____________________________________ ($_____________) on the Stated Maturity Date specified above (except to the extent redeemed or repaid prior to the Stated Maturity Date) at the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York, and such other place or places as may be provided for pursuant to the Indenture referred to below, and to pay interest semi-annually in arrears on January 15 and July 15 of each year or such other Interest Payment Dates specified above (each, an "Interest Payment Date"), commencing on the Interest Payment Date next succeeding the Original Issue Date specified above and on the Stated Maturity Date or, if applicable, any date of earlier redemption (the "Redemption Date") or repayment (the "Repayment Date") (the earliest of the Stated Maturity Date, the Redemption Date and the Repayment Date is hereinafter referred to as the "Maturity Date" with respect to the principal repayable on such date) on said principal sum at the Interest Rate specified above from and including the most recent Interest Payment Date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, from and including the Original Issue Date, until the principal hereof becomes due and payable; provided, however, that any payment of principal, premium, if any, and/or interest to be made on an Interest Payment Date or on the Maturity Date which is not a Business Day shall be made on the next Business Day with the same force and effect as if made on such Interest Payment Date or the Maturity Date, as the case may be, and no interest on such payment shall accrue to the next Business Day. For purposes of this Note, "Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in New York, New York or Los Angeles, California; provided, however, if the Specified Currency specified above is other than U.S. dollars, such day is also not a day on which banking institutions are authorized or required by law, regulation or executive order to close in the Principal Financial Center (as defined below) (or if the Specified Currency is Euro, such day is also not a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is closed). "Principal Financial Center" means the capital city of the country issuing such Specified Currency, except that with respect to U.S. dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, South African rand and Swiss francs, the "Principal Financial Center" shall be The City of New York, Sydney and (solely on the case of the Specified Currency) Melbourne, Toronto, Frankfurt, Amsterdam, Milan, Johannesburg and Zurich, respectively. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be to the person (the "Holder") in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the December 31 or June 30 or such other Record Dates specified above (whether or not a Business Day) (each, a "Record Date") immediately preceding such Interest Payment Date; provided, however, that interest payable on the Maturity Date will be payable to the person to whom principal is payable. Unless otherwise specified above, if this Note is originally issued between a Record Date and an Interest Payment Date, the first payment of interest on this Note will be made on the Interest Payment Date following the next Record Date to the Holder hereof on such next Record Date. Unless otherwise specified above, payment of the principal of, and premium, if any, and interest on, this Note due on the Maturity Date will be made in immediately available funds in the Specified Currency, upon presentation and surrender of this Note at the Corporate Trust Office of the Trustee. If the Specified Currency is other than U.S. dollars, this Note must be presented and surrendered to the Trustee referred to below in time for the Trustee to make such payment in accordance with its normal procedures. Unless otherwise specified above, payment of interest on this Note due on any Interest Payment Date other than the Maturity Date will be made by mailing a check in the Specified Currency (from an account at a bank located outside the United States if such check is payable in a Specified Currency other than U.S. dollars) to the address of the Holder hereof as such address shall appear in the Security Register (as defined in the Indenture) on the applicable Record Date. Notwithstanding the foregoing, on any Interest Payment Date other than the Maturity Date, each Holder of U.S. $10,000,000 (or the equivalent thereof in a Specified Currency other than U.S. dollars) or more in aggregate principal amount of Notes (whether or not having identical terms and provisions) shall be entitled: (i) if the Specified Currency is U.S. dollars, to receive such payment by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the United States, but only if appropriate wire transfer instructions have been received in writing by the Trustee not later than the Record Date immediately preceding such Interest Payment Date and (ii) if the Specified Currency is other than U.S. dollars, to receive such payment by wire transfer of immediately available funds to an account maintained by the payee with a bank located in a jurisdiction in which payment in such Specified Currency is then lawful. The Company shall pay any administrative costs imposed by banks in connection with making payments by wire transfer; provided, however, that any tax, assessment or other governmental charge imposed upon payments shall be borne by the Holder hereof in respect of which payments are made. All payments of principal, premium, if any, and interest in respect of this Note will be made by the Company in the Specified Currency; provided, however, that if the Specified Currency specified above is other than U.S. dollars, the Holder hereof may, if indicated above under "Option to Receive Payment in U.S. Dollars," elect to receive all payments of principal, premium, if any, and/or interest in respect of this Note in U.S. dollars by delivering a written request to the Trustee not later than the close of business on the Record Date immediately preceding the Interest Payment Date or the fifteenth day immediately preceding the Maturity Date, as the case may be. Upon such election by the Holder hereof, the Company shall tender payment in U.S. dollars at the Exchange Rate (as defined below), and any costs associated with the conversion of the Specified Currency into U.S. dollars shall be borne by the Holder hereof through deductions from such payments. The Holder's election to receive payments in U.S. dollars will remain in effect until revoked by written notice from the Holder to the Trustee, provided that any such revocation must be received by the Trustee not later than the close of business on the Record Date immediately preceding the Interest Payment Date or the fifteenth day immediately preceding the Maturity Date, as the case may be. Unless otherwise specified above or elsewhere herein, "Exchange Rate" means, with respect to a Specified Currency, the noon dollar buying rate for such Specified Currency for cable transfers quoted by the Exchange Rate Agent specified above in The City of New York on the Record Date or Special Record Date (as defined below) or the fifteenth day immediately preceding the Maturity Date or such other date provided herein or in the Indenture, as the case may be, as certified for customs purposes by the Federal Reserve Bank of New York. If any payment of principal of, premium, if any, or interest on this Note is to be made in a Specified Currency other than U.S. dollars and such Specified Currency is not available to the Company for making such payment due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to the Holder hereof by making such payment in U.S. dollars on the basis of the Exchange Rate referred to below two Business Days prior to the Interest Payment Date or the Maturity Date, as the case may be (or, if no rate is quoted for such Specified Currency on such date, the last date such Exchange Rate is quoted). Any payment made under such circumstances in U.S. dollars where the required payment is in a Specified Currency other than U.S. dollars will not constitute an Event of Default under the Indenture. For purposes of this paragraph and the immediately succeeding paragraph, the "Exchange Rate" for a foreign currency will be the noon dollar selling rate for that currency for cable transfers quoted by the Exchange Rate Agent in The City of New York, as certified for customs purposes by the Federal Reserve Bank of New York. All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion (except to the extent expressly provided that any determination is subject to approval) and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Holder of this Note and the Exchange Rate Agent shall have no liability therefor. Any interest not punctually paid or duly provided for with respect to this Note ("Defaulted Interest") will forthwith cease to be payable to the Holder of this Note on the applicable Record Date and may either be paid to the person in whose name this Note is registered at the close of business on a special record date (the "Special Record Date") for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to the Holder of this Note not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner, all as more completely described in the Indenture. Unless otherwise specified above, interest will be computed on the basis of a 360-day year of twelve 30-day months. This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of indebtedness of the Company (collectively, the "Debt Securities"), of the series hereinafter specified, all issued or to be issued under and pursuant to an indenture, dated as of January 1, 1992, as amended, supplemented or modified from time to time, including Supplemental Indenture No. 1 thereto dated as of June 15, 1995 (collectively, the "Indenture"), among the Company, the Guarantor (as defined below), and The Bank of New York, as trustee (the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company, the Guarantor and the Holders of the Notes. The Debt Securities may be issued in one or more series, which different series (and which Debt Securities issued within each series) may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different rates or formulas, may be subject to different redemption or repayment provisions, if any, may be subject to different sinking, purchase or analogous funds, if any, and may otherwise vary as provided in the Indenture. This Note is one of a series designated as "Medium-Term Notes, Series J, Due Nine Months or More From Date of Issue" of the Company (collectively, the "Notes"), limited in aggregate offering price to U.S.$6,000,000,000, or the equivalent thereof in one or more Specified Currencies other than U.S. dollars. If an Event of Default, as defined in the Indenture, with respect to the Notes shall have occurred and be continuing, the principal hereof (or, if this Note is an Original Issue Discount Security (as defined below), the Amortized Face Amount (as defined below)) and accrued but unpaid interest (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Internal Revenue Code of 1986, as amended (the "Code"), as in effect on February [ ], 2001) hereon, may be declared, and upon such declaration shall become, due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company, the Guarantor and the Trustee, with the consent of the Holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding of each series to be affected, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or modifying in any manner the rights of the Holders of the Debt Securities; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each outstanding Debt Security affected thereby: (i) except as otherwise permitted in the Indenture in connection with Debt Securities for which the Stated Maturity is extendible, change the Stated Maturity of the principal of, or any installment of interest on, any such Debt Security; (ii) reduce the principal amount of any such Debt Security or, except as otherwise permitted in the Indenture in connection with Debt Securities for which the interest rate may be reset, the interest thereon or any premium payable upon the redemption or repayment thereof; (iii) reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof; (iv) adversely affect any right of repayment at the option of the Holder of any such Debt Security; (v) reduce the amount of, or postpone the date fixed for, any payment under any sinking fund or analogous provisions for any Debt Security; (vi) change any Place of Payment, or the currency or currency unit of the payment of the principal of, premium, if any, or interest on any Debt Security; (vii) change or eliminate certain rights of Holders to receive payment in a designated currency; (viii) impair the right to institute suit for the enforcement of any required payment on or with respect to any Debt Security; (ix) reduce the percentage in aggregate principal amount of the Outstanding Debt Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences) provided for in the Indenture; (x) modify certain other provisions of the Indenture; or (xi) modify or affect in any manner adverse to the Holders the terms and conditions of the obligations of the Guarantor in respect of the due and punctual payment of principal of, or premium, if any, or interest on, the Debt Securities. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Debt Securities of any series, the Holders of a majority in aggregate principal amount of the Debt Securities of such series at the time outstanding may on behalf of the Holders of all of the Debt Securities of such series waive any past default or Event of Default and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any Debt Security of such series or in respect of certain other covenants or provisions of the Indenture. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not any notation of such consent or waiver is made upon this Note or such other Notes. The Guarantor, or a Subsidiary thereof, may directly assume, by a supplemental indenture, the due and punctual payment of the principal of, and premium, if any, and interest on, all the Debt Securities, in which case the Company shall be released from its liability as obligor on the Debt Securities. No reference herein to the Indenture and no reference to any provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and premium, if any, and interest on, this Note at the places, at the respective times, at the rate and in the currency herein prescribed. The Notes are issuable in registered form without coupons in the minimum denomination of U.S.$1,000, or the equivalent thereof in the Specified Currency (if other than U.S. dollars), and in integral multiples of U.S.$1,000 in excess thereof, or the equivalent thereof in such Specified Currency, or such other minimum denomination as specified on the face hereof. Notes may be exchanged by the Holder hereof, without charge except for any tax, assessment or other governmental charge imposed in connection therewith, for a like aggregate principal amount of Notes of other authorized denominations in the manner and subject to the limitations provided in the Indenture at the Corporate Trust Office of the Trustee. If this Note is subject to Optional Redemption as specified above, the Company may at its option redeem this Note in whole or, from time to time, in part in increments of U.S. $1,000 (provided that any remaining principal amount hereof shall be not less than the minimum denomination, as described above) on or after the Initial Redemption Date specified above at the sum of (i) 100% of the unpaid principal amount hereof or the portion thereof redeemed (or, if this Note is an Original Issue Discount Security, 100% of the Amortized Face Amount, or portion thereof redeemed, determined as of the Redemption Date as provided below), plus (ii) the Initial Redemption Percentage specified above (as adjusted for the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount or the portion thereof redeemed (or, if this Note is an Original Issue Discount Security, the Issue Price specified above, net of any portion of such Issue Price which has been deemed paid prior to redemption (by reason of any payments, other than a payment of qualified stated interest, in excess of the original issue discount accrued to the date of such payment), or the portion of such Issue Price (or such net amount) proportionate to the portion of the unpaid principal amount of the Note redeemed), plus (iii) accrued but unpaid interest to the Redemption Date (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest to the Redemption Date but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Code). Such Initial Redemption Percentage shall decline at each anniversary of the Initial Redemption Date by an amount equal to the Annual Redemption Percentage Reduction, if any, specified above, until the Initial Redemption Percentage equals zero percent. The Company may exercise such option by causing the Trustee to mail a notice of such redemption to the Holder hereof not less than 30 but not more than 60 days prior to the Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. If less than all of the Notes with like tenor and terms to this Note are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate. An "Original Issue Discount Security" means any Note that has been issued at an Issue Price lower, by an amount that equals or exceeds a de minimis amount (as determined under United States Federal income tax rules applicable to original issue discount instruments), than the principal amount thereof. If this Note is an Original Issue Discount Note, the "Amortized Face Amount" of this Note shall be the amount equal to the sum of (a) the Issue Price plus (b) the aggregate of the portions of the original issue discount (the excess of the amounts considered as part of the "stated redemption price at maturity" of this Note within the meaning of Section 1273(a)(2) of the Code, whether denominated as principal or interest, over the Issue Price of this Note) which shall theretofore have accrued pursuant to Section 1272 of the Code (without regard to Section 1272(a)(7) of the Code) from the Original Issue Date of this Note to the date of determination, minus (c) any amount considered as part of the "stated redemption price at maturity" of such Note which has been paid on this Note from the Original Issue Date to the date of determination. If this Note is an Original Discount Security, the amount payable in the event of acceleration of the maturity hereof shall be the Amortized Face Amount, plus accrued but unpaid qualified stated interest as defined in clause (iii) of the first sentence of the preceding paragraph. If this Note is subject to Optional Repayment as specified above, the Holder hereof may at its option require the Company to repay this Note in whole or from time to time in part in increments of U.S.$1,000 or the minimum denomination specified above (provided that any remaining principal amount hereof shall not be less than the minimum denomination, as described above) on any Optional Repayment Date specified above at the sum of (i) 100% of the unpaid principal amount hereof or the portion thereof to be repaid (or if this Note is an Original Issue Discount Security, 100% of the Amortized Face Amount, or portion thereof to be repaid, determined as of the Repayment Date), plus (ii) accrued but unpaid interest to the Repayment Date (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest to the Repayment Date but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Code). In order for this Note to be repaid, this Note must be received, together with the form entitled "Option to Elect Repayment" duly completed, by the Trustee at its Corporate Trust Office (or such other address of which the Company shall from time to time notify the Holders of the Notes) not more than 60 nor less than 30 days prior to the Repayment Date. Exercise of such repayment option by the Holder hereof shall be irrevocable, except as otherwise provided above. Prior to due presentment of this Note for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor, or the Trustee may treat the Holder hereof as the owner of this Note for the purpose of receiving payment of the principal hereof and premium, if any, and interest hereon and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Guarantor, the Trustee nor any such agent of the Company, the Guarantor or the Trustee shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of, or premium, if any, or interest on, this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or the Guarantor or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. All terms used but not defined in this Note shall have the meanings assigned to them in the Indenture. The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by or on behalf of the Trustee under the Indenture. IN WITNESS WHEREOF, Countrywide Home Loans, Inc. has caused this instrument to be signed in its name by the facsimile signatures of its duly authorized officers, and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. Date: COUNTRYWIDE HOME LOANS, INC. [SEAL] By:____________________________________ President and Chief Executive Officer Attest:__________________________________ Secretary GUARANTEE OF COUNTRYWIDE CREDIT INDUSTRIES, INC. For value received, Countrywide Credit Industries, Inc., a corporation duly organized and existing under the laws of Delaware (the "Guarantor"), hereby unconditionally guarantees to the Holder of the Note upon which this Guarantee is endorsed the due and punctual payment of the principal of, and premium, if any, and interest on, and sinking fund payments, if any, required with respect to said Note, when and as the same shall become due and payable, whether on the Stated Maturity Date, by acceleration, redemption or repayment or otherwise, according to the terms thereof and of the Indenture referred to therein. In case of the failure of Countrywide Home Loans, Inc. (the "Company") punctually to pay any such principal, premium, interest, or sinking fund payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether on the Stated Maturity Date, by acceleration, redemption or repayment or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute, irrevocable and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of said Note or said Indenture, any failure to enforce the provisions of said Note or said Indenture, or any waiver, modification, consent or indulgence granted to the Company with respect thereto, by the Holder of said Note or the Trustee under said Indenture, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to said Note or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, and premium, if any, and interest on, or any sinking fund payment required with respect to, said Note and the complete performance of all other obligations contained in said Note. The Guarantor shall be subrogated to all rights of the Holder of said Note against the Company in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of, and premium, if any, and interest on, and any sinking fund payments required with respect to, all Notes of this series issued under said Indenture shall have been paid in full and its other obligations under said Indenture completed. The Guarantor hereby certifies and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Guarantee and to constitute the valid obligation of the Guarantor have been done and performed and have happened in due compliance with all applicable laws. This Guarantee as endorsed on said Note shall not be entitled to any benefit under said Indenture or become valid or obligatory for any purpose until the certificate of authentication on said Note shall have been signed manually by or on behalf of the Trustee under said Indenture. This Guarantee shall be governed by and construed in accordance with the laws of the State of New York. IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed in facsimile by its duly authorized officer under its corporate seal. COUNTRYWIDE CREDIT INDUSTRIES, INC. By:_____________________________________________________________ Chairman, Chief Executive Officer and President Attest:____________________________________________ Secretary CERTIFICATE OF AUTHENTICATION This is one of the Debt Securities of the series designated therein referred to in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee Date: By:________________________________________________________ Authorized Signatory OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay this Note, or portion thereof specified below, in accordance with the terms of this Note at a price equal to the principal amount hereof, or portion thereof to be repaid (or, if this Note is an Original Issue Discount Security, the Amortized Face Amount, or portion thereof to be repaid, determined as of the Repayment Date), together with accrued but unpaid interest to the Repayment Date (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest to the Repayment Date but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Code), by payment to the undersigned at - -------------------------------------------------------------------------------- (Please print or typewrite name and address, including zip code, of the undersigned). In order for this Note to be repaid, the Trustee must receive at its Corporate Trust Office at 101 Barclay Street, New York, New York 10286, or at such other place or places of which the Company shall from time to time notify the Holders of the Notes, not more than 60 nor less than 30 days prior to the Repayment Date, this Note with this Option to Elect Repayment form duly completed. If less than the entire principal amount, or Amortized Face Amount, as applicable, of this Note is to be repaid, specify the portion thereof (which shall be in increments of U.S.$1,000 or other increments specified above) to be repaid: ______________. If less than the entire principal amount, or Amortized Face Amount, as applicable, of this Note is to be repaid, specify the denomination(s) of the Note(s) to be issued for the unpaid amount (which shall be U.S.$1,000 or increments of U.S.$1,000 in excess thereof, or such other minimum denomination specified above):______________. Date: ______________________________________Note: The signature on this Option to Elect Repayment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatsoever. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Please Print or Typewrite Name and Address Including Zip Code of Assignee - -------------------------------------------------------------------------------- the within Note and all rights thereunder, hereby irrevocably constituting and appointing - -------------------------------------------------------------------------------- to transfer said Note on the books of the Company, with full power of substitution in the premises. Dated: Signature: ___________________ ------------- NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatsoever. EX-4.15 4 0004.txt FORM OF FLOATING RATE MEDIUM TERM NOTE EXHIBIT 4.15 FORM OF FLOATING RATE MEDIUM TERM NOTE COUNTRYWIDE HOME LOANS, INC. (CUSIP No. ) REGISTERED PRINCIPAL AMOUNT No. FL- $ MEDIUM-TERM NOTE, SERIES J (Floating Rate) Due Nine Months or More From Date of Issue Payment of the Principal, Premium, if any, and Interest on this Note is Unconditionally Guaranteed by Countrywide Credit Industries, Inc. IF THE HOLDER OF THIS NOTE IS THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY, THIS NOTE IS A GLOBAL NOTE AND THE FOLLOWING LEGEND APPLIES: UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH NOTE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. - 64 - ISSUE PRICE: ORIGINAL ISSUE DATE: PRINCIPAL AMOUNT: SPECIFIED CURRENCY: MINIMUM DENOMINATION: EXCHANGE RATE AGENT: BASE RATE(S): IF CMT RATE: |_| CMT TELERATE PAGE 7051 |_| CMT TELERATE PAGE 7052: |_| WEEKLY AVERAGE |_| MONTHLY AVERAGE IF LIBOR: |_| LIBOR TELERATE |_| LIBOR REUTERS LIBOR CURRENCY: LIBOR PAGE: INDEX MATURITY: INTEREST FACTOR CONVENTION: SPREAD (plus or minus): SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE: OPTION TO RECEIVE PAYMENT IN U.S. DOLLARS: |_| NO |_| YES REDEMPTION: |_| NO |_| YES INITIAL REDEMPTION DATE: INITIAL REDEMPTION PERCENTAGE: ANNUAL REDEMPTION PERCENTAGE REDUCTION: REPAYMENT: |_| NO |_| YES OPTIONAL REPAYMENT DATE(S): STATED MATURITY DATE: INITIAL INTEREST RATE: INTEREST RESET DATES: INTEREST PAYMENT DATES: FIXED RATE COMMENCEMENT DATE: FIXED INTEREST RATE: CALCULATION AGENT: OTHER/ADDITIONAL TERMS: COUNTRYWIDE HOME LOANS, INC., a New York corporation (the "Company"), for value received, hereby promises to pay to __________________________________________, or registered assignees, the principal sum of _______________________________ ($_____________) on the Stated Maturity Date specified above (except to the extent redeemed or repaid prior to the Stated Maturity Date) at the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York, and such other place or places as may be provided for pursuant to the Indenture referred to below, and to pay interest in arrears at a rate per annum equal to the Initial Interest Rate specified above from the Original Issue Date specified above until the first Interest Reset Date specified above following the Original Issue Date and thereafter, except as specified herein, at a rate determined in accordance with the provisions below under the heading "Determination of CD Rate," "Determination of CMT Rate," "Determination of Commercial Paper Rate," "Determination of Eleventh District Cost of Funds Rate," "Determination of Federal Funds Rate," "Determination of LIBOR," "Determination of Prime Rate," or "Determination of Treasury Rate" depending upon whether an applicable Base Rate specified is the CD Rate, the CMT Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR, the Prime Rate or the Treasury Rate, respectively, until the principal hereof becomes due and payable. The Company will pay interest on the Interest Payment Dates specified above (each, an "Interest Payment Date"), commencing with the Interest Payment Date next succeeding the Original Issue Date, and on the Stated Maturity Date or, if applicable, any date of earlier redemption (the "Redemption Date") or repayment (the "Repayment Date") (the earliest of the Stated Maturity Date, the Redemption Date and the Repayment Date is hereinafter referred to as the "Maturity Date" with respect to the principal repayable on such date); provided, however, that if an Interest Payment Date other than the Maturity Date would fall on a day that is not a Business Day (as defined below), such Interest Payment Date shall be postponed to the next Business Day, except that if interest hereon is determined by reference to LIBOR and such next Business Day falls in the next calendar month, such Interest Payment Date shall be the immediately preceding Business Day; provided, further, that if the Maturity Date falls on a day that is not a Business Day, payment of principal, premium, if any, and/or interest to be made on the Maturity Date shall be made on the next Business Day with the same force and effect as if made on the Maturity Date, and no interest on such payment shall accrue to the next Business Day. For purposes of this Note, "Business Day" means (A) any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in New York, New York or Los Angeles, California; provided, however, if the Specified Currency specified above is other than U.S. dollars, such day is also not a day on which banking institutions are authorized or required by law, regulation or executive order to close in the Principal Financial Center (as defined below) (or if the Specified Currency is Euro, such day is also not a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is closed), and (B) if interest hereon is determined by reference to LIBOR, such day is also a London Banking Day (as defined below). "Principal Financial Center" means the capital city of the country issuing the Specified Currency, except that with respect to U.S. dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, Portuguese escudos, South African rand and Swiss francs, the "Principal Financial Center" shall be The City of New York, Sydney and (solely in the case of the Specified Currency) Melbourne, Toronto, Frankfurt, Amsterdam, Milan, London (solely in the case of the LIBOR Currency (as defined below)), Johannesburg and Zurich, respectively. "London Banking Day" means any day on which banking institutions are open for business (including dealings in the LIBOR Currency) in London. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person (the "Holder") in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the fifteenth day (whether or not a Business Day) immediately preceding such Interest Payment Date (each, a "Record Date"); provided, however, that interest payable on the Maturity Date will be payable to the person to whom principal is payable. Unless otherwise specified above, if this Note is originally issued between a Record Date and an Interest Payment Date, the first payment of interest on this Note will be made on the Interest Payment Date following the next Record Date to the Holder hereof on such next Record Date. Unless otherwise specified above, payment of the principal of, premium, if any, and interest on, this Note due on the Maturity Date will be made in immediately available funds in the Specified Currency, upon presentation and surrender of this Note at the Corporate Trust Office of the Trustee. If the Specified Currency is other than U.S. dollars, this Note must be presented and surrendered to the Trustee referred to below in time for the Trustee to make such payment in accordance with its normal procedures. Unless otherwise specified above, payment of interest on this Note due on any Interest Payment Date other than the Maturity Date will be made by mailing a check in the Specified Currency (from an account at a bank located outside the United States if such check is payable in a Specified Currency other than U.S. dollars) to the address of the Holder hereof as such address shall appear in the Security Register (as defined in the Indenture) on the applicable Record Date. Notwithstanding the foregoing, on any Interest Payment Date other than the Maturity Date, each Holder of U.S.$10,000,000 (or the equivalent thereof in a Specified Currency other than U.S. dollars) or more in aggregate principal amount of Notes (whether or not having identical terms and provisions) shall be entitled: (i) if the Specified Currency is U.S. dollars, to receive such payment by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the United States, but only if appropriate wire transfer instructions have been received in writing by the Trustee not later than the Record Date immediately preceding such Interest Payment Date and (ii) if the Specified Currency is other than U.S. dollars, to receive such payment by wire transfer of immediately available funds to an account maintained by the payee with a bank located in a jurisdiction in which payment in such Specified Currency is then lawful. The Company shall pay any administrative costs imposed by banks in connection with making payments by wire transfer; provided, however, that any tax, assessment or other governmental charge imposed upon payments shall be borne by the Holder hereby in respect of which payments are made. All payments of principal, premium, if any, and interest, in respect of this Note will be made by the Company in the Specified Currency; provided, however, that if the Specified Currency specified above is other than U.S. dollars, the Holder hereof may, if indicated above under "Option to Receive Payment in U.S. Dollars," elect to receive all payments of principal, premium, if any, and/or interest in respect of this Note in U.S. dollars by delivering a written request to the Trustee not later than the close of business on the Record Date immediately preceding the Interest Payment Date or the fifteenth day immediately preceding the Maturity Date, as the case may be. Upon such election by the Holder hereof, the Company shall tender payment in U.S. dollars at the Exchange Rate (as defined below), and any costs associated with the conversion of the Specified Currency into U.S. dollars shall be borne by the Holder hereof through deductions from such payments. The Holder's election to receive payments in U.S. dollars will remain in effect until revoked by written notice from the Holder to the Trustee, provided that any such revocation must be received by the Trustee not later than the close of business on the Record Date immediately preceding the Interest Payment Date or the fifteenth day immediately preceding the Maturity Date, as the case may be. Unless otherwise specified above or elsewhere herein, "Exchange Rate" means, with respect to a Specified Currency, the noon dollar buying rate for such Specified Currency for cable transfers quoted by the Exchange Rate Agent specified above in The City of New York on the Record Date or Special Record Date (as defined below) or the fifteenth day immediately preceding the Maturity Date or such other date provided herein or in the Indenture, as the case may be, as certified for customs purposes by the Federal Reserve Bank of New York. If any payment of principal of, premium, if any, or interest on this Note is to be made in a Specified Currency other than U.S. dollars and such Specified Currency is not available to the Company for making such payment due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to the Holder hereof by making such payment in U.S. dollars on the basis of the Exchange Rate referred to below two Business Days prior to the Interest Payment Date or the Maturity Date, as the case may be (or, if no rate is quoted for such Specified Currency on such date, the last date such Exchange Rate is quoted). Any payment made under such circumstances in U.S. dollars where the required payment is in a Specified Currency other than U.S. dollars will not constitute an Event of Default under the Indenture. For purposes of this paragraph and the immediately succeeding paragraph, the "Exchange Rate" for a foreign currency will be the noon dollar selling rate for that foreign currency for cable transfers quoted by the Exchange Rate Agent in The City of New York, as certified for customs purposes by the Federal Reserve Bank of New York. All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion (except to the extent expressly provided that any determination is subject to approval) and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Holder of this Note and the Exchange Rate Agent shall have no liability therefor. Any interest not punctually paid or duly provided for with respect to this Note ("Defaulted Interest") will forthwith cease to be payable to the Holder of this Note on the applicable Record Date and may either be paid to the person in whose name this Note is registered at the close of business on a special record date (the "Special Record Date") for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to the Holder of this Note not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner, all as more completely provided in the Indenture. This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of indebtedness of the Company (collectively, the "Debt Securities"), of the series hereinafter specified, all issued or to be issued under and pursuant to an indenture, dated as of January 1, 1992, as amended, supplemented or modified from time to time, including Supplemental Indenture No. 1 thereto, dated as of June 15, 1995 (collectively, the "Indenture"), among the Company, the Guarantor (as defined below), and The Bank of New York, as trustee (the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a description of the respective rights, limitation of rights, obligations, duties and immunities thereunder of the Trustee, the Company, the Guarantor and the Holders of the Notes. The Debt Securities may be issued in one or more series, which different series (and which Debt Securities issued within each series) may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different rates or formulas, may be subject to different redemption or repayment provisions, if any, may be subject to different sinking, purchase or analogous funds, if any, and may otherwise vary as provided in the Indenture. This Note is one of a series designated as "Medium-Term Notes, Series J, Due Nine Months or More From Date of Issue" of the Company (collectively, the "Notes"), limited in aggregate issue amount to U.S.$6,000,000,000 or the equivalent thereof in one or more Specified Currencies other than U.S. dollars. The interest payable hereon on each Interest Payment Date will include interest accrued from and including the most recent Interest Payment Date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, from and including the Original Issue Date, as the case may be, to, but excluding, the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an "Interest Period"). Accrued interest will be calculated by multiplying the principal amount hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factor calculated for each day in the Interest Period for which accrued interest is being calculated. The interest factor for each such day shall be computed by dividing the interest rate applicable to such day by 360 if an applicable Base Rate is the CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR or the Prime Rate or by the actual number of days in the year if an applicable Base Rate is the CMT Rate or the Treasury Rate. If more than one Base Rate is applicable to this Note, the interest factor will be calculated in the same manner as if only the Base Rate specified above under "Interest Factor Convention" applied. This Note will bear interest at the rate determined in accordance with the provisions set forth below by reference to the applicable Base Rate, or the lowest, highest or average of two or more Base Rates, as specified above, based on the Index Maturity, if any, specified above (i) plus or minus the Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if any, in each case specified above. Commencing with the first Interest Reset Date specified above, the rate at which interest on this Note is payable shall be reset as of each Interest Reset Date; provided, however, that (i) the interest rate in effect for the period, if any, from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate and (ii) if a Fixed Rate Commencement Date is specified above, the interest rate in effect for the period commencing on the Fixed Rate Commencement Date to the Maturity Date shall be the Fixed Interest Rate specified above or, if no Fixed Interest Rate is specified above, the interest rate in effect on the day immediately preceding the Fixed Rate Commencement Date. Except as set forth in the immediately preceding paragraph, the interest rate applicable to an Interest Reset Period (as defined below) commencing on the related Interest Reset Date will be determined by reference to the applicable Base Rate as of the particular "Interest Determination Date", which will be (i) with respect to the Federal Funds Rate and the Prime Rate, the Business Day immediately preceding the related Interest Reset Date; (ii) with respect to the CD Rate, the CMT Rate and the Commercial Paper Rate, the second Business Day preceding the related Interest Reset Date; (iii) with respect to the Eleventh District Cost of Funds Rate, the last working day of the month immediately preceding the related Interest Reset Date on which the Federal Home Loan Bank of San Francisco publishes the Index (as defined below); (iv) with respect to LIBOR, the second London Banking Day preceding the related Interest Reset Date; and (v) with respect to the Treasury Rate, the day in the week in which the related Interest Reset Date falls on which day Treasury Bills (as defined below) are normally auctioned (i.e. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that the auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the related Interest Reset Date, the Interest Determination Date will be the preceding Friday. The "Interest Reset Period" is the period between Interest Reset Dates. If interest hereon is determined by reference to two or more Base Rates, the "Interest Determination Date" means the most recent Business Day which is at least two Business Days prior to the applicable Interest Reset Date on which each Base Rate shall be determinable. Each Base Rate shall be determined and compared as of such date, and the applicable interest rate shall take effect on the related Interest Reset Date. If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next Business Day, except that if interest hereon is determined by reference to LIBOR and such next Business Day falls in the next calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Notwithstanding the foregoing, the interest rate hereon shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, specified above. In addition, the interest rate hereon shall in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application. Subject to applicable provisions of law and except as specified herein, on each applicable Interest Reset Date the rate of interest will be calculated by the Calculation Agent specified below in accordance with the provisions of the applicable heading below. Unless otherwise specified above, all percentages resulting from any calculation of the rate of interest on this Note will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward, and all amounts used in or resulting from such calculation on this Note will be rounded, in the case of U.S. dollars, to the nearest cent (with one-half cent being rounded upward) or, in the case of a Specified Currency other than U.S. dollars, to the nearest unit (with one-half unit being rounded upward). Determination of CD Rate. If an applicable Base Rate is the CD Rate, "CD Rate" for each applicable Interest Reset Date will be: (1) the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit having the Index Maturity specified above as published in H.15(519) (as defined below) under the caption "CDs (secondary market)", or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date (as defined below), the rate on the particular Interest Determination Date for negotiable United States dollar certificates of deposit of the particular Index Maturity as published in H.15 Daily Update (as defined below), or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "CDs (secondary market)", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time, on that Interest Determination Date, of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States certificates of deposit with a remaining maturity closest to the particular Index Maturity in an amount that is representative for a single transaction in that market at that time, or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the CD Rate in effect on the particular Interest Determination Date. "H.15(519)" means the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of H.15(519), available through the world-wide-web site of the Board of Governors of the Federal Reserve System at http:/www.bog.frb.fed.us/releases/h15/update, or any successor site or publication. Determination of CMT Rate. If an applicable Base Rate is the CMT Rate, "CMT Rate" for each applicable Interest Reset Date will be: (1) if CMT Telerate Page 7051 is specified above: (a) the percentage equal to the yield for United States Treasury securities at "constant maturity" having the Index Maturity specified above as published in H.15(519) under the caption "Treasury Constant Maturities", as the yield is displayed on Bridge Telerate, Inc. (or any successor service) on page 7051 (or any other page as may replace the specified page on that service) ("Telerate Page 7051"), for the particular Interest Determination Date, or (b) if the rate referred to in clause (a) does not so appear on Telerate Page 7051, the percentage equal to the yield for United States Treasury securities at "constant maturity" having the particular Index Maturity and for the particular Interest Determination Date as published in H.15(519) under the caption "Treasury Constant Maturities", or (c) if the rate referred to in clause (b) does not so appear in H.15(519), the rate on the particular Interest Determination Date for the period of the particular Index Maturity as may then be published by either the Federal Reserve System Board of Governors or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate which would otherwise have been published in H.15(519), or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices at approximately 3:30 P.M., New York City time, on that Interest Determination Date of three leading primary United States government securities dealers in The City of New York (which may include the agents or their affiliates) (each, a "Reference Dealer"), selected by the Calculation Agent from five Reference Dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity equal to the particular Index Maturity, a remaining term to maturity no more than 1 year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time, or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated, or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent from five Reference Dealers selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time, or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations will be eliminated, or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on the particular Interest Determination Date. (2) if CMT Telerate Page 7052 is specified above: (a) the percentage equal to the one-week or one-month, as specified above, average yield for United States Treasury securities at "constant maturity" having the Index Maturity specified above as published in H.15(519) opposite the caption "Treasury Constant Maturities", as the yield is displayed on Bridge Telerate, Inc. (or any successor service) (on page 7052 or any other page as may replace the specified page on that service) ("Telerate Page 7052"), for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls, or (b) if the rate referred to in clause (a) does not so appear on Telerate Page 7052, the percentage equal to the one-week or one-month, as specified above, average yield for United States Treasury securities at "constant maturity" having the particular Index Maturity and for the week or month, as applicable, preceding the particular Interest Determination Date as published in H.15(519) opposite the caption "Treasury Constant Maturities," or (c) if the rate referred to in clause (b) does not so appear in H.15(519), the one-week or one-month, as specified above, average yield for United States Treasury securities at "constant maturity" having the particular Index Maturity as otherwise announced by the Federal Reserve Bank of New York for the week or month, as applicable, ended immediately preceding the week or month, as applicable, in which the particular Interest Determination Date falls, or (d) if the rate referred to in clause (c) is not so published, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices at approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent from five Reference Dealers selected by the Calculation Agent and eliminating the highest quotation, or, in the event of equality, one of the highest, and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity equal to the particular Index Maturity, a remaining term to maturity no more than 1 year shorter than that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at that time, or (e) if fewer than five but more than two of the prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest nor the lowest of the quotations shall be eliminated, or (f) if fewer than three prices referred to in clause (d) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent as a yield to maturity based on the arithmetic mean of the secondary market bid prices as of approximately 3:30 P.M., New York City time, on that Interest Determination Date of three Reference Dealers selected by the Calculation Agent from five Reference Dealers selected by the Calculation Agent and eliminating the highest quotation or, in the event of equality, one of the highest and the lowest quotation or, in the event of equality, one of the lowest, for United States Treasury securities with an original maturity greater than the particular Index Maturity, a remaining term to maturity closest to that Index Maturity and in a principal amount that is representative for a single transaction in the securities in that market at the time, or (g) if fewer than five but more than two prices referred to in clause (f) are provided as requested, the rate on the particular Interest Determination Date calculated by the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the highest or the lowest of the quotations will be eliminated, or (h) if fewer than three prices referred to in clause (f) are provided as requested, the CMT Rate in effect on that Interest Determination Date. If two United States Treasury securities with an original maturity greater than the Index Maturity specified above have remaining terms to maturity equally close to the particular Index Maturity, the quotes for the United States Treasury security with the shorter original remaining term to maturity will be used. Determination of Commercial Paper Rate. If an applicable Base Rate is the Commercial Paper Rate, ------------------------------------------ "Commercial Paper Rate" for each applicable Interest Reset Date will be: (1) the Money Market Yield (as defined below) on the particular Interest Determination Date of the rate for commercial paper having the Index Maturity specified above as published in H.15(519) under the caption "Commercial Paper-Nonfinancial", or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Money Market Yield of the rate on the particular Interest Determination Date for commercial paper having the particular Index Maturity as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "Commercial Paper-Nonfinancial", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on that Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent for commercial paper having the particular Index Maturity placed for industrial issuers whose bond rating is "Aa", or the equivalent, from a nationally recognized statistical rating organization, or (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the Commercial Paper Rate in effect on the particular Interest Determination Date. "Money Market Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula: [OBJECT OMITTED] where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the applicable Interest Reset Period. Determination of Eleventh District Cost of Funds Rate. If an applicable Base Rate is the Eleventh District Cost of Funds Rate, "Eleventh District Cost of Funds Rate" for each applicable Interest Reset Date will be: (1) the rate equal to the monthly weighted average cost of funds for the calendar month immediately preceding the month in which the particular Interest Determination Date falls as set forth under the caption "11th District" on the display on Bridge Telerate, Inc. (or any successor service) on page 7058 (or any other page as may replace the specified page on that service) ("Telerate Page 7058") as of 11:00 A.M., San Francisco time, on that Interest Determination Date, or (2) if the rate referred to in clause (1) does not so appear on Telerate Page 7058, the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Index") by the Federal Home Loan Bank of San Francisco as the cost of funds for the calendar month immediately preceding that Interest Determination Date, or (3) if the Federal Home Loan Bank of San Francisco fails to announce the Index on or prior to the particular Interest Determination Date for the calendar month immediately preceding that Interest Determination Date, the Eleventh District Cost of Funds Rate in effect on the particular Interest Determination Date. Determination of Federal Funds Rate. If an applicable Base Rate is the Federal Funds Rate, "Federal ------------------------------------- Funds Rate" for each applicable Interest Reset Date will be: (1) the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15(519) under the caption "Federal Funds (Effective)" and displayed on Bridge Telerate, Inc. (or any successor service) on page 120 (or any other page as may replace the specified page on that service) ("Telerate Page 120"), or (2) if the rate referred to in clause (1) does not so appear on Telerate Page 120 or is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "Federal Funds (Effective)", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the rates for the last transaction in overnight United States dollar federal funds arranged by three leading brokers of United States dollar federal funds transactions in The City of New York (which may include the Agents or their affiliates) selected by the Calculation Agent prior to 9:00 A.M., New York City time, on that Interest Determination Date, or (4) if the brokers so selected by the Calculation Agent are not quoting as mentioned in clause (3), the Federal Funds Rate in effect on the particular Interest Determination Date. Determination of LIBOR. If an applicable Base Rate is LIBOR, "LIBOR" for each applicable Interest Reset Date will be: (1) if "LIBOR Telerate" is specified above or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified above as the method for calculating LIBOR, the rate for deposits in the LIBOR Currency having the Index Maturity specified above, commencing on the related Interest Reset Date, that appears on the LIBOR Page as of 11:00 A.M., London time, on the particular Interest Determination Date, or (2) if "LIBOR Reuters" is specified above, the arithmetic mean of the offered rates, calculated by the Calculation Agent, or the offered rate, if the LIBOR Page by its terms provides only for a single rate, for deposits in the LIBOR Currency having the particular Index Maturity, commencing on the related Interest Reset Date, that appear or appears, as the case may be, on the LIBOR Page as of 11:00 A.M., London time, on the particular Interest Determination Date, or (3) if fewer than two offered rates appear, or no rate appears, as the case may be, on the particular Interest Determination Date on the LIBOR Page as specified in clause (1) or (2), as applicable, the rate calculated by the Calculation Agent of at least two offered quotations obtained by the Calculation Agent after requesting the principal London offices of each of four major reference banks (which may include affiliates of the Agents) in the London interbank market to provide the Calculation Agent with its offered quotation for deposits in the LIBOR Currency for the period of the particular Index Maturity, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that Interest Determination Date and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (4) if fewer than two offered quotations referred to in clause (3) are provided as requested, the rate calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on the particular Interest Determination Date by three major banks (which may include affiliates of the Agents) in that Principal Financial Center selected by the Calculation Agent for loans in the LIBOR Currency to leading European banks having the particular Index Maturity and in a principal amount that is representative for a single transaction in the LIBOR Currency in that market at that time, or (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (4), LIBOR in effect on the particular Interest Determination Date. "LIBOR Currency" means the currency specified above as to which LIBOR shall be calculated or, if no currency is specified above, United States dollars. "LIBOR Page" means either: o if "LIBOR Reuters" is specified above, the display on the Reuter Monitor Money Rates Service (or any successor service) on the page specified above (or any other page as may replace that page on that service) for the purpose of displaying the London interbank rates of major banks for the LIBOR Currency; or o if "LIBOR Telerate" is specified above or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified above as the method for calculating LIBOR, the display on Bridge Telerate, Inc. (or any successor service) on the page specified above (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks for the LIBOR Currency. Determination of Prime Rate. If an applicable Base Rate is the Prime Rate, "Prime Rate" for each ----------------------------- applicable Interest Reset Date will be: (1) the rate on the particular Interest Determination Date as published in H.15(519) under the caption "Bank Prime Loan", or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "Bank Prime Loan", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME 1 Page (as defined below) as the applicable bank's prime rate or base lending rate as of 11:00 A.M., New York City time, on that Interest Determination Date, or (4) if fewer than four rates referred to in clause (3) are so published by 3:00 p.m., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on that Interest Determination Date by three major banks (which may include affiliates of the Agents) in The City of New York selected by the Calculation Agent, or (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (4), the Prime Rate in effect on the particular Interest Determination Date. "Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor Money Rates Service (or any successor service) on the "US PRIME 1" page (or any other page as may replace that page on that service) for the purpose of displaying prime rates or base lending rates of major United States banks. Determination of Treasury Rate. If an applicable Base Rate is the Treasury Rate, "Treasury Rate" for -------------------------------- each applicable Interest Reset Date will be: (1) the rate from the auction held on the Treasury Rate Interest Determination Date (the "Auction") of direct obligations of the United States ("Treasury Bills") having the Index Maturity specified above under the caption "INVESTMENT RATE" on the display on Bridge Telerate, Inc. (or any successor service) on page 56 (or any other page as may replace that page on that service) ("Telerate Page 56") or page 57 (or any other page as may replace that page on that service) ("Telerate Page 57"), or (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption "U.S. Government Securities/Treasury Bills/Auction High", or (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or (4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary Market", or (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, or another recognized electronic source used for the purpose of displaying the applicable rate, under the caption "U.S. Government Securities/Treasury Bills/Secondary Market", or (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on that Interest Determination Date, of three primary United States government securities dealers (which may include the Agents or their affiliates) selected by the Calculation Agent for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified above, or (7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date. "Bond Equivalent Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula: [OBJECT OMITTED] where "D" refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable Interest Reset Period. The Bank of New York shall be the Calculation Agent, unless a different Calculation Agent is specified above. At the request of the Holder hereof, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date. The "Calculation Date," if applicable, pertaining to any Interest Determination Date will be the earlier of (i) the 10th calendar day after such Interest Determination Date or, if such day is not a Business Day, the next Business Day or (ii) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be. If an Event of Default, as defined in the Indenture, with respect to the Notes shall have occurred and be continuing, the principal hereof (or, if this Note is an Original Issue Discount Security (as defined below), the Amortized Face Amount (as defined below)) and accrued but unpaid interest (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Internal Revenue Code of 1986, as amended (the "Code"), as in effect on February [ ], 2001) hereon, may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company, the Guarantor and the Trustee, with the consent of the Holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding of each series to be affected, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or modifying in any manner the rights of the Holders of the Debt Securities; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each outstanding Debt Security affected thereby: (i) except as otherwise permitted in the Indenture in connection with Debt Securities for which the Stated Maturity is extendible, change the Stated Maturity of the principal of, or any installment of interest on, any such Debt Security; (ii) reduce the principal amount of any such Debt Security or, except as otherwise permitted in the Indenture in connection with Debt Securities for which the interest rate may be reset, the interest thereon or any premium payable upon the redemption or repayment thereof; (iii) reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof; (iv) adversely affect any right of repayment at the option of the Holder of any such Debt Security; (v) reduce the amount of, or postpone the date fixed for, any payment under any sinking fund or analogous provisions for any Debt Security; (vi) change any Place of Payment, or the currency or currency unit of the payment of the principal of, premium, if any, or interest on any Debt Security; (vii) change or eliminate certain rights of Holders to receive payment in a designated currency; (viii) impair the right to institute suit for the enforcement of any required payment on or with respect to any Debt Security; (ix) reduce the percentage in aggregate principal amount of the Outstanding Debt Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences) provided for in the Indenture; (x) modify certain other provisions of the Indenture; or (xi) modify or affect in any manner adverse to the Holders the terms and the conditions of the obligations of the Guarantor in respect of the due and punctual payment of principal of, or premium, if any, or interest on, the Debt Securities. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Debt Securities of any series, the Holders of a majority in aggregate principal amount of the Debt Securities of such series at the time outstanding may on behalf of the Holders of all of the Debt Securities of such series waive any past default or Event of Default and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any Debt Security of such series or in respect of certain other covenants or provisions of the Indenture. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not any notation of such consent or waiver is made upon this Note or such other Notes. The Guarantor, or a Subsidiary thereof, may directly assume, by a supplemental indenture, the due and punctual payment of the principal of, and premium, if any, and interest on, all the Debt Securities, in which case the Company shall be released from its liability as obligor on the Debt Securities. No reference herein to the Indenture and no reference to any provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and premium, if any, and interest on, this Note at the places, at the respective times, at the rate and in the currency herein prescribed. The Notes are issuable in registered form without coupons in the minimum denomination of U.S.$1,000, or the equivalent thereof in the Specified Currency (if other than U.S. dollars), and in integral multiples of U.S.$1,000 in excess thereof, or the equivalent thereof in such Specified Currency, or such other Minimum Denomination as specified on the face hereof. Notes may be exchanged by the Holder hereof, without charge except for any tax, assessment or other governmental charge imposed in connection therewith, for a like aggregate principal amount of Notes of other authorized denominations in the manner and subject to the limitations provided in the Indenture at the Corporate Trust Office of the Trustee. If this Note is subject to Optional Redemption as specified above, the Company may at its option, redeem this Note in whole or, from time to time, in part in increments of U.S.$1,000 (provided that any remaining principal amount hereof shall be not less than the minimum denomination, as described above) on or after the Initial Redemption Date specified above at the sum of (i) 100% of the unpaid principal amount hereof or the portion thereof redeemed (or, if this Note is an Original Issue Discount Security, 100% of the Amortized Face Amount, or portion thereof redeemed, determined as of the Redemption Date as provided below), plus (ii) the Initial Redemption Percentage specified above (as adjusted for the Annual Redemption Percentage Reduction, if applicable) multiplied by the unpaid principal amount or the portion thereof redeemed (or, if this Note is an Original Issue Discount Security, the Issue Price specified above, net of any portion of such Issue Price which has been deemed paid prior to redemption (by reason of any payments, other than a payment of qualified stated interest, in excess of the original issue discount accrued to the date of such payment), or the portion of such Issue Price (or such net amount) proportionate to the portion of the unpaid principal amount of the Note redeemed), plus (iii) accrued but unpaid interest to the Redemption Date (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest to the Redemption Date but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Code). Such Initial Redemption Percentage shall decline at each anniversary of the Initial Redemption Date by an amount equal to the Annual Redemption Percentage Reduction, if any, specified above, until the Initial Redemption Percentage equals zero percent. The Company may exercise such option by causing the Trustee to mail a notice of such redemption to the Holder hereof not less than 30 but not more than 60 days prior to the Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. If less than all of the Notes with like tenor and terms to this Note are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate. An "Original Issue Discount Security" means any Note that has been issued at an Issue Price lower, by an amount that equals or exceeds a de minimis amount (as determined under United States Federal income tax rules applicable to original issue discount instruments), than the principal amount thereof. If this Note is an Original Issue Discount Note, the "Amortized Face Amount" of this Note shall be the amount equal to the sum of (a) the Issue Price plus (b) the aggregate of the portions of the original issue discount (the excess of the amounts considered as part of the "stated redemption price at maturity" of this Note within the meaning of Section 1273(a)(2) of the Code, whether denominated as principal or interest, over the Issue Price of this Note) which shall theretofore have accrued pursuant to Section 1272 of the Code (without regard to Section 1272(a)(7) of the Code) from the Original Issue Date of this Note to the date of determination, minus (c) any amount considered as part of the "stated redemption price at maturity" of this Note which has been paid on this Note from the Original Issue Date to the date of determination. If this Note is an Original Discount Security, the amount payable in the event of acceleration of the maturity hereof shall be the Amortized Face Amount, plus accrued but unpaid qualified stated interest as defined in clause (iii) of the first sentence of the preceding paragraph. If this Note is subject to Optional Repayment as specified above, the Holder hereof may at its option require the Company to repay this Note in whole or from time to time in part in increments of U.S.$1,000 or the minimum denomination specified above (provided that any remaining principal amount hereof shall not be less than the minimum denomination, as described above) on any Optional Repayment Date specified above at the sum of (i) 100% of the unpaid principal amount hereof or the portion thereof to be repaid (or if this Note is an Original Issue Discount Security, 100% of the Amortized Face Amount, or portion thereof to be repaid, determined as of the Repayment Date), plus (ii) accrued but unpaid interest to the Repayment Date (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest to the Repayment Date but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Code). In order for this Note to be repaid, this Note must be received, together with the form entitled "Option to Elect Repayment" duly completed, by the Trustee at its Corporate Trust Office (or such other address of which the Company shall from time to time notify the Holders of the Notes) not more than 60 nor less than 30 days prior to the Repayment Date. Exercise of such repayment option by the Holder hereof shall be irrevocable, except as otherwise provided above. Prior to due presentment of this Note for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor, or the Trustee may treat the Holder hereof as the owner of this Note, for the purpose of receiving payment of the principal hereof and premium, if any, and interest hereon and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Guarantor, the Trustee nor any such agent of the Company, the Guarantor, or the Trustee shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of, or premium, if any, or interest on, this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer, director or employee, as such, past, present, or future, of the Company or the Guarantor or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. All terms used but not defined in this Note shall have the meanings assigned to them in the Indenture. The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by or on behalf of the Trustee under the Indenture. IN WITNESS WHEREOF, Countrywide Home Loans, Inc. has caused this instrument to be signed in its name by the facsimile signatures of its duly authorized officers, and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. Date: COUNTRYWIDE HOME LOANS, INC. [SEAL] By: -------------------------- President and Chief Executive Officer Attest: -------------------------------------------- Secretary GUARANTEE OF COUNTRYWIDE CREDIT INDUSTRIES, INC. For value received, Countrywide Credit Industries, Inc., a corporation duly organized and existing under the laws of Delaware (the "Guarantor"), hereby unconditionally guarantees to the Holder of the Note upon which this Guarantee is endorsed the due and punctual payment of the principal of, and premium, if any, and interest on, and sinking fund payments, if any, required with respect to said Note, when and as the same shall become due and payable, whether on the Stated Maturity Date, by acceleration, redemption or repayment or otherwise, according to the terms thereof and of the Indenture referred to therein. In case of the failure of Countrywide Home Loans, Inc. (the "Company") punctually to pay any such principal, premium, interest, or sinking fund payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether on the Stated Maturity Date, by acceleration, redemption or repayment, or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute, irrevocable and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of said Note or said Indenture, any failure to enforce the provisions of said Note or said Indenture, or any waiver, modification, consent or indulgence granted to the Company with respect thereto, by the Holder of said Note or the Trustee under said Indenture, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to said Note or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, and premium, if any, and interest on, or any sinking fund payment required with respect to, said Note and the complete performance of all other obligations contained in said Note. The Guarantor shall be subrogated to all rights of the Holder of said Note against the Company in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of, and premium, if any, and interest on, and any sinking fund payments required with respect to, all Notes of this series issued under said Indenture shall have been paid in full and its other obligations under said Indenture completed. The Guarantor hereby certifies and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this Guarantee and to constitute the same the valid obligation of the Guarantor have been done and performed and have happened in due compliance with all applicable laws. This Guarantee as endorsed on said Note shall not be entitled to any benefit under said Indenture or become valid or obligatory for any purpose until the certificate of authentication on said Note shall have been signed manually by or on behalf of the Trustee under said Indenture. This Guarantee shall be governed by and construed in accordance with the laws of the State of New York. IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed in facsimile by its duly authorized officer under its corporate seal. COUNTRYWIDE CREDIT INDUSTRIES, INC. By: _____________________________________________________________ Chairman, Chief Executive Officer and President Attest: _________________________________________________ Secretary CERTIFICATE OF AUTHENTICATION This is one of the Debt Securities of the series designated therein referred to in the within-mentioned Indenture. THE BANK OF NEW YORK, as Trustee Date: By: __________________________________________________ Authorized Signatory OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay this Note, or portion thereof specified below, in accordance with the terms of this Note at a price equal to the principal amount hereof, or portion thereof to be repaid (or, if this Note is an Original Issue Discount Security, the Amortized Face Amount, or portion thereof to be repaid, determined as of the Repayment Date), together with accrued but unpaid interest to the Repayment Date (or, if this Note is an Original Issue Discount Security, any accrued but unpaid interest to the Repayment Date but only to the extent such interest would constitute qualified stated interest within the meaning of Treasury Regulation Section 1.1273-1(c) under the Code), by payment to the undersigned at - -------------------------------------------------------------------------------- (Please print or typewrite name and address, including zip code, of the undersigned). In order for this Note to be repaid, the Trustee must receive at its Corporate Trust Office at 101 Barclay Street, New York, New York 10286, or at such other place or places of which the Company shall from time to time notify the Holders of the Notes, not more than 60 nor less than 30 days prior to the Repayment Date, this Note with this Option to Elect Repayment form duly completed. If less than the entire principal amount, or Amortized Face Amount, as applicable, of this Note is to be repaid, specify the portion thereof (which shall be in increments of U.S.$1,000 or other increments specified above) to be repaid: ______________. If less than the entire principal amount, or Amortized Face Amount, as applicable, of this Note is to be repaid, specify the denomination(s) of the Note(s) to be issued for the unpaid amount (which shall be U.S.$1,000 or increments of U.S.$1,000 in excess thereof, or such other minimum denomination specified above):______________. Date: ------------------------------------ Note: The signature on this Option to Elect Repayment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatsoever. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE Please Print or Typewrite Name and Address Including Zip Code of Assignee the within Note and all rights thereunder, hereby irrevocably constituting and appointing to transfer said Note on the books of the Company, with full power of substitution in the premises. Dated: Signature: -------------------- --------------------------------------- NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatsoever. EX-5.1 5 0005.txt OPINION OF MUNGER, TOLLES & OLSON EXHIBIT 5.1 OPINION OF MUNGER, TOLLES & OLSON LLP LEGALITY OF SECURITIES February 13, 2001 Countrywide Credit Industries, Inc. Countrywide Home Loans, Inc. 4500 Park Granada Calabasas, CA 91302 Re: Registration Statement on Form S-3 (Registration Nos. 333-_____ and ____-01) Ladies and Gentlemen: We have acted as counsel to Countrywide Credit Industries, Inc., a Delaware corporation ("CCI"), and Countrywide Home Loans, Inc., a New York corporation ("CHL"), in connection with the Registration Statement on Form S-3 (Nos. 333-______ and 333-______-01) (the "Registration Statement"), filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, for the registration of the sale by CCI and CHL from time to time of up to $5,500,000,000 maximum aggregate initial offering price of (a) debt securities issued by CHL ("Debt Securities") and guaranteed by CCI (the "Guarantee"), (b) shares of preferred stock, par value $.05 per share, of CCI (the "Preferred Stock"), (c) shares of Common Stock, par value $.05 per share, of CCI (the "Common Stock"), and (d) contracts to purchase shares of Preferred Stock or Common Stock (the "Stock Purchase Contracts"). The Debt Securities, Guarantee, Preferred Stock, Common Stock and Stock Purchase Contracts are herein collectively referred to as the "Securities". Debt Securities, Preferred Stock and Stock Purchase Contracts may be convertible or exchangeable for Securities or other securities or rights. The Debt Securities will be issued under either the Indenture, dated as of January 1, 1992, among CHL, CCI and The Bank of New York, as trustee (the "Senior Trustee"), as amended and supplemented by Supplemental Indenture No.1, dated as of June 15, 1995 (together, the "Senior Indenture"), or the form of Indenture, presently undated (the "Subordinated Indenture"), among CHL, CCI and The Bank of New York, as trustee (the "Subordinated Trustee"). The Stock Purchase Contracts may be issued under one or more indentures, each in the form to be filed as an exhibit to the Registration Statement (each an "Indenture"), between or among CCI, CHL and one or more trustees (each a "Trustee"). We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for purposes of this opinion. Based upon foregoing, we are of the opinion that: 1. For Debt Securities issued pursuant to the Senior Indenture, when the specific terms of the particular Debt Security have been duly authorized and established in accordance with the Senior Indenture, and such Debt Security has been duly authorized, executed, authenticated, issued and delivered in accordance with the Senior Indenture, against payment therefor or upon exchange in accordance with the applicable underwriting or other agreement, such Debt Security will constitute the valid and binding obligation of CHL, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equitable principles. 2. For Debt Securities issued pursuant to the Subordinated Indenture, when the specific terms of the particular Debt Security have been duly authorized and established in accordance with the Subordinated Indenture, and such Debt Security has been duly authorized, executed, authenticated, issued and delivered in accordance with the Subordinated Indenture, against payment therefor or upon exchange in accordance with the applicable underwriting or other agreement, such Debt Security will constitute the valid and binding obligation of CHL, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equitable principles. 3. When the issuance of Common Stock has been duly authorized, the certificates for such Common Stock have been duly executed by CCI, countersigned by the transfer agent therefor and duly delivered to the purchasers thereof, against payment therefor in accordance with the applicable underwriting or other agreement, such Common Stock (including any Common Stock duly issued upon the exchange or conversion of any Debt Security or Preferred Stock that is exchangeable or convertible into Common Stock) will be validly issued, fully paid and nonassessable. 5. When the issuance of Preferred Stock has been duly authorized, the Certificate of Designations establishing the terms of such Preferred Stock has been duly approved and executed by CCI and filed with the Secretary of State of the State of Delaware, the certificates for such Preferred Stock have been duly executed by CCI, countersigned by the transfer agent therefor and delivered to the purchasers thereof, against payment therefor in accordance with the applicable underwriting or other agreement, such Preferred Stock (including any Preferred Stock duly issued upon the exchange or conversion of any Debt Security that is exchangeable or convertible into Preferred Stock) will be validly issued, fully paid and nonassessable. 6. When CCI, CHL and a trustee execute and deliver an indenture with respect to Stock Purchase Contracts and the specific terms of a particular Stock Purchase Contract have been duly authorized and established in accordance with such Indenture, and such Stock Purchase Contract has been duly authorized, executed, countersigned, issued and delivered in accordance with such Indenture, against payment therefor in accordance with the applicable underwriting or other agreement, such Stock Purchase Contract will constitute the valid and binding obligation of CCI and CHL, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equitable principles. 7. When CCI executes and delivers its Guarantee with respect to the obligations of CHL under any Debt Security, such Guarantee will constitute the valid and binding obligation of CCI, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equitable principles. In connection with the opinions expressed above, we have assumed that, at or prior to the time of delivery of any such Security, (a) the Board of Directors shall have duly established the terms of such Security and duly authorized the issuance and sale of such Security, in accordance with Delaware law in the case of CCI and in accordance with New York law in the case of CHL, and such authorization shall not have been modified or rescinded; (b) the Registration Statement shall have been declared effective and such effectiveness shall not have been terminated or rescinded; (c) the applicable Indenture, if any, shall have been duly authorized, executed and delivered by CCI and/or CHL, as applicable, in accordance with applicable law and the applicable Trustee and shall have been qualified under the Trust Indenture Act of 1939, as amended; (d) the Senior Indenture has been duly authorized, executed and delivered by the Senior Trustee and constitutes the legal, valid and binding obligation of the Senior Trustee, enforceable against the Senior Trustee in accordance with its terms; (e) the Subordinated Indenture has been duly authorized, executed and delivered by the Subordinated Trustee and constitutes the legal, valid and binding obligation of the Subordinated Trustee, enforceable against the Subordinated Trustee in accordance with its terms; (f) the applicable Certificate of Designations, if any, shall have been duly approved and executed by CCI in accordance with applicable law and filed with the Secretary of State of the State of Delaware in accordance with Delaware law; (g) the applicable Guarantee, if any, shall have been duly authorized, executed and delivered by CCI in accordance with applicable law; and (h) there will not have occurred any change in law affecting the validity or enforceability of such Security. We have also assumed that none of the terms of any Security to be established subsequent to the date hereof, nor the issuance and delivery of such Security, nor the compliance by CCI or CHL, as the case may be, with the terms of such Security will violate any applicable law or will result in a violation of any provision of any instrument or agreement then binding upon CCI or CHL, as the case may be, or any restriction imposed by any court or governmental body having jurisdiction over CCI or CHL, as the case may be. We are members of the Bar of the State of California and the foregoing opinion is limited to the laws of the State of California, the General Corporation Law of the State of Delaware and the federal laws of the United States of America. With respect to the Indenture, the Senior Indenture, the Subordinated Indenture, the Debt Securities, the Guarantee and the Stock Purchase Contracts, which are stated to be governed by the laws of the State of New York, we have assumed with your consent that such laws are the same as the laws of the State of California with respect to the legal, valid and binding nature of the Indenture, the Senior Indenture, the Subordinated Indenture, the Debt Securities, the Guarantee and the Stock Purchase Contracts. We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our name in the Registration Statement and the related Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933. Very truly yours, /s/ MUNGER, TOLLES & OLSON LLP EX-8.1 6 0006.txt OPINION OF MUNGER, TOLLES & OLSON EXHIBIT 8.1 OPINION OF MUNGER, TOLLES & OLSON LLP TAX MATTERS February 13, 2001 Countrywide Home Loans, Inc. Countrywide Credit Industries, Inc. 4500 Park Granada Calabasas, CA 91302 Ladies and Gentlemen: We have acted as your special counsel in connection with the Prospectus Supplement dated February __, 2001 (the "Prospectus Supplement") to the Prospectus dated February __, 2001, included in your Registration Statement on Form S-3 (File Nos. ___________ and ________-01) (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), being filed today with the Securities and Exchange Commission, with respect to the public offering from time to time of Medium-Term Notes, Series J, of Countrywide Home Loans, Inc. (the "Notes"). We hereby confirm, based on the assumptions and subject to the qualifications and limitations set forth therein, that the statements in the section of the Prospectus Supplement captioned "Certain Federal Income Tax Consequences," to the extent that such statements constitute statements of law, reflect our opinion regarding the material federal income tax consequences of the purchase, ownership and disposition of the Notes. No opinion is expressed on matters other than those specifically referred to herein. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act. Very truly yours, /s/ MUNGER, TOLLES & OLSON LLP EX-23.1 7 0007.txt CONSENT OF GRANT THORNTON LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We have issued our report dated April 28, 2000, accompanying the consolidated financial statements and schedules of Countrywide Credit Industries, Inc. and Subsidiaries appearing in the Annual Report on Form 10-K for the year ended February 29, 2000, which is incorporated by reference in this Registration Statement on Form S-3 (the "Registration Statement"). We consent to the incorporation by reference in this Registration Statement of the aforementioned report and to the use of our name as it appears under the caption "Experts." GRANT THORNTON LLP /S/ GRANT THORNTON LLP Los Angeles, California February 12, 2001 EX-25.1 8 0008.txt STATEMENT OF ELIGIBILITY EXHIBIT 25.1 FORM T-1 STATEMENT OF ELIGIBILITY ======================================================================== FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) Countrywide Credit Industries, Inc. (Exact name of obligor as specified in its charter) Delaware 13-2641992 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Countrywide Home Loans, Inc. (Exact name of obligor as specified in its charter) New York 13-2631719 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 4500 Park Granada Calabasas, California 91302 (Address of principal executive offices) (Zip code) ------------- Debt Securities (Title of the indenture securities) ======================================================================== 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 9th day of February, 2001. THE BANK OF NEW YORK By: /s/ MARIE E. TRIMBOLI ----------------------------------------------- Name: MARIE E. TRIMBOLI Title: ASSISTANT TREASURER - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2000, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $4,194,838 Interest-bearing balances........................... 4,596,320 Securities: Held-to-maturity securities......................... 837,052 Available-for-sale securities....................... 4,877,379 Federal funds sold and Securities purchased under agreements to resell................................ 3,085,401 Loans and lease financing receivables: Loans and leases, net of unearned income...............37,707,721 LESS: Allowance for loan and lease losses............598,990 LESS: Allocated transfer risk reserve........................12,370 Loans and leases, net of unearned income, allowance, and reserve............................ 37,096,361 Trading Assets......................................... 10,039,718 Premises and fixed assets (including capitalized leases)............................................. 740,743 Other real estate owned................................ 4,714 Investments in unconsolidated subsidiaries and associated companies................................ 178,845 Customers' liability to this bank on acceptances outstanding......................................... 887,442 Intangible assets...................................... 1,353,079 Other assets........................................... 4,982,250 Total assets........................................... $72,874,142 LIABILITIES Deposits: In domestic offices................................. $26,812,643 Noninterest-bearing.......................11,206,758 Interest-bearing..........................15,605,885 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,338,068 Noninterest-bearing..........................520,061 Interest-bearing..........................25,818,007 Federal funds purchased and Securities sold under agreements to repurchase............................ 1,789,285 Demand notes issued to the U.S.Treasury................ 100,000 Trading liabilities.................................... 2,440,940 Other borrowed money: With remaining maturity of one year or less......... 1,581,151 With remaining maturity of more than one year through three years............................... 0 With remaining maturity of more than three years.... 31,080 Bank's liability on acceptances executed and outstanding......................................... 889,948 Subordinated notes and debentures...................... 1,652,000 Other liabilities...................................... 4,914,363 Total liabilities...................................... 66,549,478 EQUITY CAPITAL Common stock........................................... 1,135,285 Surplus................................................ 988,327 Undivided profits and capital reserves................. 4,242,906 Net unrealized holding gains (losses) on available-for-sale securities....................... ( 11,848) Accumulated net gains (losses) on cash flow hedges 0 Cumulative foreign currency translation adjustments.... ( 30,006) Total equity capital................................... 6,324,664 Total liabilities and equity capital................... $72,874,142
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. ================================================================================ Thomas J. Mastro We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi Gerald L. Hassell Directors Alan R. Griffith - -------------------------------------------------------------------------------- * To be filed by as an exhibit to a Current Report on Form 8-K of Countrywide Credit Industries at such time as an underwritten issuance of such securities is contemplated. * To be filed as an exhibit to a Current Report on Form 8-K of Countrywide Credit Industries at such time as an underwritten issuance of such securities is contemplated. * To be filed by as an exhibit to a Current Report on Form 8-K of Countrywide Credit Industries at such time as an underwritten issuance of such securities is contemplated. * To be filed as an exhibit to a Current Report on Form 8-K of Countrywide Credit Industries at such time as an underwritten issuance of such securities is contemplated. -----END PRIVACY-ENHANCED MESSAGE-----